DC Circuit Strikes Constitutional Blow to Copyright Royalty Board

DC Circuit Strikes Constitutional Blow to Copyright Royalty Board

Last Friday, the D.C. Circuit determined that the position of the Copyright Royalty Judges (CRJs) violates the Appointments Clause. To remedy the violation, the court invalidated and severed the restrictions on the Librarian of Congress's ability to remove the CRJs.

In Intercollegiate Broad. Sys. v. Copyright Royalty Bd., 2012 U.S. App. LEXIS 13757 (D.C. Cir. July 6, 2012) [enhanced version available to lexis.com subscribers], Intercollegiate initially argued that all determinations made by the CRJs were void because the relevant appeal provision purported to ask Article III courts to take actions of a kind beyond their constitutional jurisdiction. 17 U.S.C. § 803(d), which provides for appeals of the CRJs' determinations to the D.C. Circuit, states that "the court may enter its own determination ...." Intercollegiate challenged this language, claiming it vested the court with powers unsuitable for an Article III court.

The court avoided Intercollegiate's initial argument as having no bearing on Intercollegiate's case.  However, the court noted, incidentally, that the power to make its "own determination" would appear to present no problem on an issue as to which the law permitted only one option.

Intercollegiate also argued that:

the Copyright Royalty Board as currently structured violates the Constitution's Appointments Clause, art. II, § 2, cl. 2, on two grounds: (1) the Judges' exercise of significant ratemaking authority, without any effective means of control by a superior (such as unrestricted removability), qualifies them as "principal" officers who must be appointed by the President with Senate confirmation; and (2) even if the Judges are "inferior" officers, the Librarian of Congress is not a "Head of Department" in whom Congress may vest appointment power.

The court agreed with Intercollegiate on the first claim but not the second.

Intercollegiate contended that the CRJs not only exercised significant authority but were "principal" rather than "inferior" officers, so that Congress' decision to vest their appointment in the Librarian rather than the President (with Senate approval) violated the text of Article II. After considering the significance of the CRJs' authority, the court found that, given the CRJs' nonremovability and the finality of their decisions, the Librarian's and Register of Copyrights' supervision functions fell short of the kind that would render the CRJs inferior officers. The CRJs constituted principal officers and, consequently, had to be appointed by the President and confirmed by the Senate. Thus, the structure of the Copyright Royalty Board violated the Appointments Clause.

However, pursuant to Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 130 S. Ct. 3138 (U.S. 2010) [enhanced version available to lexis.com subscribers], the court remedied the constitutional violation by invalidating and severing the restrictions on the Librarian's ability to remove the CRJs. The court held that:

With such removal power in the Librarian's hands, we are confident that the Judges are "inferior" rather than "principal" officers, and that no constitutional problem remains.


Specifically, we find unconstitutional all of the language in 17 U.S.C. § 802(i) following "The Librarian of Congress may sanction or remove a Copyright Royalty Judge . . . ." Without this restriction, we are confident that ... the CRJs will be inferior rather than principal officers. With unfettered removal power, the Librarian will have the direct ability to "direct," "supervise," and exert some "control" over the Judges' decisions. Although individual CRJ decisions will still not be directly reversible, the Librarian would be free to provide substantive input on non-factual issues via the Register, whom the Judges are free to consult. This, coupled with the threat of removal satisfies us that the CRJs' decisions will be constrained to a significant degree by a principal officer (the Librarian). ...

(citations omitted) 


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