Overhaul in Store for Copyright Royalty Board

     WASHINGTON (CN) – The three judges of the Copyright Royalty Board are unconstitutionally appointed primary officers of the U.S. government, the D.C. Circuit ruled.
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     The Copyright Royalty Judges, who determine rates, terms and distribution of royalties collected by the U.S. Copyright Office, are appointed to staggered six-year terms by the librarian of Congress who retains no control over the judges once they take office.
     This independence violates the appointments clause of the Constitution, which allows only the president, with confirmation of the Senate, to appoint officers with “significant authority,” a three-judge panel of the D.C. Circuit found Friday.
     To remedy the situation, without dismantling the entire structure of copyright rate making, the court struck down statutory language limiting the authority of the librarian of Congress to remove the judges for cause.
     Without such a restriction, the court said it was confidant that “the CRJ’s will be inferior rather than principle officers.”
     The decision covers only the constitutional structure of the Copyright Royalty Board and does not address the merits of the underlying case.
     Intercollegiate Broadcasting Systems Inc., a Rhode Island-based college web radio broadcasting association, brought the case to the federal appeals court when the board ordered Intercollegiate’s members to comply with a previously determined royalty rate scheme for rebroadcast of copyrighted music.
     Intercollegiate argued that the determination was void because the copyright judges’ exercise of “significant ratemaking authority without any effective means of control by a superior” qualified them as “principal officers” who had to be appointed by the president and confirmed by the Senate.
     The government countered that the limited brief of the copyright judges to set rates made them “inferior officers,” and so the librarian of Congress was properly authorized by the congress to make the appointments.
     Under the Copyright Royalty and Distribution Reform Act of 2004, the CRJs must comply with opinions written by the register of the Copyright Office on “novel material questions of law.” The register is in turn appointed by and reports to the librarian. The government argued that this relationship allowed the librarian to exert sufficient control over the CRJs to render them inferior officers under the Constitution and Supreme Court precedent.
     That argument fell flat before the appellate court.
     “Of course one might see these authorities of the CRJs as primarily addressing ‘merely rates,'” Judge Stephen Williams wrote for a three-member panel. “But rates can obviously mean life or death for firms and even industries.”
     The finality of CRJ’s decisions, which are not subject to amendment or reversal by the librarian of Congress, also troubled the court which noted that the decisions of administrative law judges in other agencies were subject to such review by officials appointed by the president and confirmed by the Senate.
     “We find that, given the CRJs’ nonremovability and the finality of their decisions …, the librarian’s and register’s supervision functions still fall short of the kind that would render the CRJs inferior officers,” Williams wrote.
     If the CRJs were found to be inferior officers, Intercollegiate maintained that the judges were not properly appointed because the librarian of Congress was a creature of the legislative branch not the “head of a department,” as defined by the Constitution, who can be authorized by Congress to make such appointments.
     Quoting Supreme Court precedent in Free Enterprise Fund v. Public Company Accounting Oversight Board, the court rejected this argument.
     “The powers in the library and the board to promulgate copyright regulations, to apply the statute to affected parties, and to set rates and terms case by case are ones generally associated in modern times with executive agencies rather than legislators,” Williams wrote. “In this role the Library is undoubtedly a ‘component of the executive branch.'”
     The court did not comment on whether its ruling could invalidate other board rulings.

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