Copyright Royalty Board Ruled Unconstitutional

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On July 6, the U.S. Court of Appeals for the District of Columbia Circuit found that the Copyright Royalty Board violates the Appointments Clause of the Constitution. The Copyright Royalty Board is a board of three judges appointed by the Librarian of Congress to set the rates paid for copyright licenses. Since the market for copyright licenses can be very unique, the Board balances a variety of considerations to ensure that licensing prices remain fair.

The Appointments Clause of the Constitution requires that “principal officers” be appointed by the President with the advice and consent of the Senate. Intercollegiate Broadcasting System, Inc. argued that the Judges of the Board exercised power as principal officers without being appointed constitutionally. The court agreed that the judges could be considered principal officers, but solved any constitutional issues by eliminating limitations on the Judges’ removal. If the Librarian of Congress can remove the Judges at will, then the Judges of the Board can be considered inferior officers and avoid violating the Appointments Clause.

While the Librarian of Congress oversees the Copyright Royalty Board to a degree, the Board enjoys a great deal of independence. The Librarian can only approve their procedural regulations, issue their ethical rules, and oversee logistics. Also, the librarian can only remove a judge for misconduct or neglect of duty. The Register, also appointed by the Librarian, can interpret copyright laws and provide written opinions to the Board on novel material questions of law and reviews any legal errors in the Board’s decisions.

Intercollegiate, a group of college radio stations that operate online, challenged the Board’s rates for educational and noncommercial webcasters. As part of their claim, Intercollegiate presented two arguments that the Copyright Royalty Board’s structure violates the Constitution’s Appointments Clause, art. II, § 2, cl. 2:

  • The judges are principal officers who must be appointed by the President with Senate confirmation since they exercise significant ratemaking authority without any restrictions by a superior.
  • 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’s first argument but rejected their second. After accepting the argument that the judges are primary officers, the court tried to provide a remedy that would bring the appointments in line with the constitutional requirements with as little disruption as possible.

Since the Librarian can only remove Judges from the Board for limited reasons and the Board is not subject to the supervision of a principle officer, the court agreed that the Judges can be considered principle officers who are not appointed constitutionally. In order to solve this issue, the court simply invalidated the limitations on the Librarian’s power to remove a judge. If the Librarian is a Head of Department and can remove Judges from the Board without cause, then the Judges could be considered inferior officers.

While some previous cases have stated that the Library of Congress is not an executive department and cannot be considered a Department under the Appointments Clause, the court held that the Library of Congress meets the definition of Department since it exercises a variety of executive powers and the Librarian is appointed by the President with the advice and consent of the Senate. As a result, the Librarian of Congress can be considered a Head of Department. Therefore, if the restrictions on removal are invalidated, the Librarian can appoint Copyright Royalty Judges constitutionally.

Having resolved the constitutional issues, the court remanded the case back to the Board to determine suitable copyright licensing fees.

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