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Is the Copyright Royalty Board Unconstitutional? Part III - The Real Deal?

In two separate decisions in July, judges on the U.S. Court of Appeals for the D.C. Circuit noted that there are questions about the constitutionality of the Copyright Review Board, a three-member federal agency that sets copyright royalty rates whose members are selected by the Librarian of Congress and subject to removal only for cause. In SoundExchange v. Librarian of Congress, Judge Brett Kavanaugh wrote a separate concurring opinion raising questions about the Board's constitutionality, but noted the issue had not been raised by the parties. A few days later, in Intercollegiate Broadcast System, Inc. v. Copyright Review Board, the D.C. Circuit noted but passed on this issue again, as the issue had been raised too late.

It looks the D.C. Circuit will get another chance to consider the question. BLT reports that internet radio aggregator Live365 has filed suit directly challenging the CRB's constitutionality. Specifically, Live365 argues that under the Appointments clause Congress may not delegate authority to appoint the members of the CRB to the Librarian of Congress, a department in the legislative branch of government.

Will the third time be the charm? Perhaps, but the viability of Live365's suit likely depends upon how the Supreme Court resolves Free Eneterprise Fund v. Public Company Accounting Oversight Board, an appointments clause challenge to the constitutionality of the PCAOB. While the issues presented are not precisely the same, the two entities are likely to rise and fall together. If the current Supreme Court is willing to follow Justice Scalia's lead and embrace a relatively formalist view of the clause, both the CRB and PCOAB should go down. If, on the other hand, the Court adopts a more pragmatist posture, as the Court did in the independent counsel case, Morrison v. Olson, I would expect both to survive. Any predictions?

Related Posts (on one page):

  1. Is the Copyright Royalty Board Unconstitutional? Part III - The Real Deal?
  2. Is the Copyright Royalty Board Unconstitutional? - Take Two:
  3. Is the Copyright Royalty Board Unconstitutional?
Tim Nuccio (mail) (www):
My prediction based on your post, struck down.

Ahh, hell. it's 50/50
9.1.2009 10:52pm
Joe Cal (mail):
I disagree that the two entities (that is, CRB and PCAOB) are likely to rise and fall together. The Supreme Court has consistently stricken down attempts by Congress to appoint officers who perform executive functions. Free Enterprise is different in that the PCAOB members are appointed by officers in the SEC -- an independent commission, to be sure, but not an arm of Congress. My guess is that they will both fall.
9.1.2009 10:54pm
Jonathan H. Adler (mail) (www):
Joe Cal --

I'm confused. You don't think it's likely they will rise or fall together, but think they will both fall? I agree that there are ways to distinguish the two cases -- and the identification of the Librarian of Congress with the legislative branch is the easiest way to do it --but I still expect the outcomes of the two cases to be the same . . . and it seems you do as well.

JHA
9.1.2009 11:01pm
Joe Cal (mail):
I do think that they will both fall, but I don't think their fates are tied. That is to say that I don't think the outcome of the D.C. Circuit case depends on the outcome or reasoning of Free Enterprise Fund. I should have said, "nonetheless, I think they will both fall." Both are very interesting cases.
9.1.2009 11:04pm
Bill Bartmann (mail) (www):
Cool site, love the info.
9.2.2009 12:00am
Thales (mail) (www):
6-3 against the propositions that PCOAB and CRB are unconstitutional.
9.2.2009 12:21am
M. Slonecker (mail):
If I may ask a more fundamental question...just where exactly does Congress, which exercises control over the LOC, receive the power to both legislate Title 17 (of course, Article 1, Section 8, Clause 8) and execute said legislation? I leave rulemaking under the APA to another discussion at a later date.

Moreover, it does seem a bit odd that the "Appointments Clause" is an integral part of Presidential powers under Article II, and yet the position(s) being appointed reside within Congress.

A somewhat similar issue has been raised in the context of appointing administrative law judges on the BPAI and TTAB panels of the US Patent and Trademark Office, Professor Duffy being a catalyst in bringing the issue to the forefront. Of course the USPTO is a federal agency under the Secretary of Commerce. I have a difficult time applying the same rationale to the members of the CRB.

The LOC has always struck me as being some sort of a foster child stuck in a twilight zone between the legislative and executive branches.
9.2.2009 12:45am
Joe Cal (mail):
Thales wrote:

6-3 against the propositions that PCOAB and CRB are unconstitutional.


One could certainly see the pragmatists Roberts, Alito, and Kennedy going the way that Rehnquist went in Morrison (upholding the provision) (as in Melendez-Diaz), while Scalia and Thomas come down against the PCAOB. Assuming the other wing of the Court comes down in favor of the PCAOB, the lineup would look as follows:

To uphold:

Roberts
Stevens*
Kennedy
Ginsburg
Breyer
Alito
Sotomayor

To invalidate:

Scalia
Thomas

*Stevens tends to be very formalistic in these types of cases, but Free Enterprise Fund does not seem to lend itself to reasoning that is as formalistic as, say, Chadha.
9.2.2009 12:58pm
ohwilleke:
The CRB lives.

Delegation doctrine arguments almost always lose, particularly when contrary to an express statute.

Legislative branch tribunals (including a prior custom's court and the current tax court) have long histories.

Many governmental officials (e.g. subordinate staff not affiliated with particular members of Congress, such as most employees of the CBO, GAO, JBC and Library of Congress) are appointed by legislative employees and have been by long standing bipartisan agreement. To do otherwise would implicate the separation of powers. Some of those staff employees have sensitive policy making roles.

If all else fails, the Librarian of Congress could be deemed, for legal fiction purposes, to be an actual employee of an independent agency in the Executive Branch, rather than a true legislative branch employee.

Also, is the CRB really engaged in either a judicial or an executive function? Deciding what a copyright royalty is, does not entail actually enforcing that royalty right. Presumably, a separate suit for back royalties in the judicial branch does that. And, if one is arbitrating a commercial dispute over commercial terms, rather than interpreting the meaning of a law in a determinable way, is one really engaged in the judicial function?
9.2.2009 8:51pm
ohwilleke:
The grounds for the DC Court inaction on the issue is also suggestive. The subject matter jurisdiction of the tribunal below is normally subject to attack at any time even if the issue was not preserved at trial, and even on collateral attack.

The question of whether a tribunal is constitutionally constituted could easily have been framed as a question of subject matter jurisdiction. The fact that it was not makes the argument harder to see prevailing.
9.2.2009 8:55pm

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