Category Archives: Appointments Clause

Live365 denied preliminary injunction in Appointments Clause challenge of CRB

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Filed under Appointments Clause, Copyright Royalty Board, Preliminary Injunction

Live365, Inc. v. Copyright Royalty Bd., 2010 WL 621718 (D.D.C. 2010)

We previously discussed this case in early September. Live365 filed a facial challenge against the CRB and the Librarian of Congress, arguing that the appointment of the Board transgressed Article 2, Section 2, Clause 2 of the U.S. Constitution. In the motion at bar, Live365 sought a preliminary injunction seeking a stay of In Re Digital Performance Right in Sound Recordings and Ephemeral Recordings, Docket No. 2009-1 (CRB Webcasting III).  The Defendant’s responded with a motion to dismiss for lack of subject matter jurisdiction. The D.C. District Court denied both.

Defendants motion to dismiss for lack of subject matter jurisdiction

The Defendants argued that the Court had no jurisdiction to hear the challenge because under 17 U.S.C. § 803(d)(1), “[a]ny determination’ of the Copyright Royalty Judges in the Webcaster III proceeding [is vested exclusively with] the District of Columbia Circuit.” The Defendants also contended that the case didn’t come within the exception that permits a district court to exercise jurisdiction over  a facial challenge to the constitutionality of a statute under which the agency was proceeding  because the plaintiff’s claim was a direct challenge to the Webcaster III proceeding itself.

In this regard, the defendants argue that this case is distinguishable from Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 537 F.3d 667, 676 (D.C.Cir.2008), cert. granted, — U.S. —-, 129 S.Ct. 2378 (2009), and Time Warner Entertainment Co. v. FCC, 93 F.3d 957 (D.C.Cir.1996), because here the plaintiff’s suit “is not independent of any administrative proceeding.” Id. Specifically, the defendants claim that, “among other things,” the plaintiff is seeking to have an order issued by the CR Board judges in the Webcasting III proceeding altered to extend a filing deadline imposed by that order. Id. Therefore, the defendants contend that jurisdiction rests exclusively with the District of Columbia Circuit. Id.

Live365 argued that the Court had jurisdiction via Section 1331, as a civil action that arises under the Constitution.  The Plaintiff further argued that its claims were independent of the Webcaster III proceeding and that the remedy sought (a stay of the Webcaster III proceeding) didn’t change the fact that its challenge was independent of the proceeding.

The Court found that 17 U.S.C. § 803(d)(1) limited judicial review of determinations of the CRB judges to the District of Columbia Circuit, but not an attack on the legislation which established the CRB.  The Court found that the action fell  “squarely within the exception recognized by Time Warner and Free Enterprise, which authorize[d the] Court to exercise jurisdiction over a facial challenge to the constitutionality of a statute”:

The government’s argument that this case is distinguishable from Free Enterprise and Time Warner because the Complaint targets a specific ongoing proceeding is unpersuasive. In General Electric, the plaintiff’s due process challenge against the Environmental Protection Agency (“EPA”) pursued in this court was sanctioned by the Circuit despite there having been “ongoing interactions over remediation at several locations” between the parties, because “the lawsuit [did] not challenge any particular action or order by the EPA.” Id. at 191. Thus, although the plaintiff’s injunction request could have the effect of extending the September 29, 2009 deadline set by the CR Board judges and could inevitably impact the progression of the Webcasting III proceeding, their request for the injunction is derived from their constitutional facial challenge to the appointment of the CR Board judges, which is wholly independent of any action actually taken or expected to be taken in the future by the CR Board judges.

Appointments Clause challenge

To briefly review Appointments Clause structures at an oversimplified level, courts have interpreted the Appointments Clause as creating a four-pronged structure for evaluating members of the executive branch: Head of Departments, principal officers, inferior officers and employees. Head of Department and principal officers must be appointed by the President with the advice and consent of the Senate. Inferior Officers must be appointed by either the President or a Head of Departments. Lesser employees do not transgress the Appointments Clause regardless of their appointment method.

Live365 argued that the CRB judges were principal officers who may only be appointed by the President; or in the alternative, that they were inferior officers whose appointment was unconstitutional because the Librarian of Congress was not a Head of Department in the Executive Branch.

Whether the Librarian of Congress is a principal officer

The most interesting issue in App0ointments Clause challenges, for me at least,  is how courts struggle with the majority opinion’s finding from Freytag v. Comm’r of Internal Revenue, 501 U.S. 868 (1991) that a Head of Department is confined to heads of  “Cabinet-level departments,” which  are “limited in number and easily identified.” The Court in Live365 sidestepped Freytag and instead looked to Eltra Corp. v. Ringer, 579 F.2d 294, 300 (4th Cir. 1978), which was issued thirteen years before Freytag, for the presumably intentionally circular proposition that if an officer is appointed by the President and invested with the power to appoint other officers, she is a principal officer:

The Register is appointed by the Librarian of Congress, who in turn is appointed by the president with the advice and consent of the Senate. By the nature of his appointment the Librarian is a[ ] [principal] [o]fficer of the United States, with the usual power of such officer to appoint ‘such inferior [o]fficers (i.e., the Register [and the CR Board judges] ), as (he) think(s) proper. 579 F.2d at 300 (internal citation and quotation marks omitted).

Accordingly, the Librarian is seemingly a principal officer that heads an Executive Department, and therefore, has the power to appoint inferior officers. Thus, given the manner in which the Librarian is appointed and considering many of the functions assigned to him, the plaintiff has not met its burden of showing that there is a substantial likelihood that it will succeed on the merits of its alternative Appointments Clause challenge.

Whether the Librarian is a member of the executive branch

The Court also looked to Eltra for precedence on the issue of whether the Librarian was a member of the executive branch.  As the Court noted, the Librarian is appointed by the President with the advice and consent of the Senate; the President, not Congress, has the power to remove the Librarian at will; and while the Library is codified under Title 2 of the United States Code, which addresses specifically the Legislative Branch,  “such code-grouping cannot determine whether a given function is executive or legislative.” Eltra at 579 F.2d at 301.

Whether the CRB judges are principal or inferior officers

Live365 argued that the CRB judges were principal officers and must be appointed by the President. The Court found that CRB Judges were “sufficiently subordinate to both the Librarian of Congress and the Register of Copyrights to qualify as inferior officers, and thus, their appointments by the Librarian do not offend the Appointments Clause.”

In both Edmond and Freytag, the judges were held to be inferior officers despite the fact that their duties included taking testimony, ruling on the admissibility of evidence, issuing protective orders, and issuing subpoenas, and the CR Board judges exercise many of those same responsibilities. Thus, the guiding precedent of the Supreme Court seemingly requires the conclusion that despite the level of autonomy the CR Board judges exercise, the degree of direction and supervision exercised over them by the Librarian and the Register renders them inferior rather than principal officers.

Previous posts on an Appointments Clause challenge to the Copyright Royalty Board:

LIVE365 files Appointments Clause challenge to the Copyright Royalty Board

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Filed under Appointments Clause, Copyright Royalty Board

LIVE365, Inc. v. Copyright Royalty Board, et al., 09-cv-01662-RBW (D.C. Cir. 2009)

On August 29, internet broadcaster LIVE365 filed a complaint in the D.C. Circuit arguing that the appointment of the Copyright Royalty Board transgresses the Appointments Clause of the U.S. Constitution. The complaint prayed for an injunction staying all proceedings before the CRB and a declaratory judgment. LIVE365 argued that:

(i) the Copyright Royalty Judges are principal officers who must be appointed by the President of the United States because they are not removable at will and their decisions are not reversible by the Librarian of Congress or any other Executive Branch official, or in the alternative, (ii) the Copyright Royalty Judges are inferior officers who must be appointed, inter alia, by a Head of Department, and the Librarian of Congress, as a member of the Legislative Branch, is not a Head of Department.

Previous posts at Exclusive Rights on an Appointments Clause challenge to the Copyright Royalty Board:

music attorneys

Breaking News: Every pending copyright case lacks jurisdiction

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Filed under Appointments Clause, Jurisdiction

copyright-siren1
So I promised myself I wouldn’t break out the copyright siren because it’s so, you know, annoying. But this story needs, no, scratch that, it deserves, the siren. Did you realize that under current precedent every pending copyright case lacks jurisdiction? Such is apparently the status of things.

Our story begins in the grand ole’ year of 1991. C+C Music Factory and Color Me Badd topped the charts, the Minnesota Twins were in the World Series, I had the biggest crush on Sarah from second period band, and the Supreme Court issued a feisty little decision in Freytag v. Commissioner of Internal Revenue. In the case, A five Justice majority held that a head of a department, for purposes of the Appointments Clause, must be the head of a “Cabinet-level department[]” that is “limited in number and easily identified.” The Constitution only vests the power to appoint inferior officers in the President, the Courts of Law, and the Heads of Departments. Thus any appointment that wasn’t made by the President, the Courts of Law, or a Cabinet-level like department head, transgresses the Constitution.

Who are the not quite Cabinet-level department heads who still make appointments, transgressing the Supreme Court’s prevailing interpretation of the Appointments Clause?  Well, one of them is the Librarian of Congress. Even the most fervent advocate, I think, would be hard-pressed to make the argument that the Library is a Cabinet-level department. The Library isn’t one of those departments like the State Department, the Department of the Interior, or the Commerce Department; the Librarian doesn’t go through an exhaustive confirmation process; he isn’t a political figure; he doesn’t change when administrations change; &c.

So, under current precedent the appointments made by the Librarian of Congress are invalid. If you’ve been following this blog, you may recognize this issue from the Appointments Clause challenge to the Copyright Royalty Board. But really, why stop there? Who else has the Librarian of Congress appointed in violation of the Appointments Clause?

The Register of Copyrights, together with the “subordinate officers and employees of the Copyright Office,” are all appointed by the Librarian of Congress. 17 U.S.C. § 701(a). You know, those people who are in charge of that whole registration thing, as well as a host of other amazing policy work I don’t want to make light of.

So no big deal, right? A valid copyright registration isn’t important? I mean, it has a pretty stamp and looks all official and stuff, but so what? IT’S ONLY A JURISDICTIONAL REQUIREMENT! To quote the Second Circuit from In Re: Literary Works in Electronic Database Litigation, now set for oral arguments at the Supreme Court:

[T]here is widespread agreement among the circuits that section 411(a) is jurisdictional. See La Resolana Architects, PA v. Clay Realtors Angel Fire, 4 416 F.3d 1195, 1200 (10th Cir. 2005) (“Section 411(a) is the jurisdictional lynchpin to copyright 5 infringement actions[.]”); Positive Black Talk Inc. v. Cash Money Records Inc., 394 F.3d 357, 6 365 (5th Cir. 2004) (noting that section 411(a) “supplement[s]” the “broad underlying” 7 jurisdictional grants in 28 U.S.C. §§ 1331, 1338 and acts as an additional “jurisdictional 8 prerequisite”); Xoom, Inc. v. Imageline, Inc., 323 F.3d 279, 283 (4th Cir. 2003) (“Copyright 9 registration is a jurisdictional prerequisite to bringing an action for infringement under the 10 Copyright Act.”); Murray Hill Publ’ns, Inc. v. ABC Commc’ns, Inc., 264 F.3d 622, 630 n.1 (6th 11 Cir. 2001) (noting that while copyright protection exists prior to registration, “[t]he registration 12 requirement under section 411[a] is a jurisdictional prerequisite to the right of the holder to 13 enforce the copyright in federal court”); Brewer-Giorgio v. Producers Video, Inc., 216 F.3d 14 1281, 1285 (11th Cir. 2000) (“It is well settled in this Court that the registration requirement is a 15 jurisdictional prerequisite to an infringement suit.” (internal quotation marks omitted and 16 alterations incorporated)); Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1163 17 (1st Cir. 1994) (describing registration under section 411(a) as a “jurisdictional requirement”).

In the immortal words of Scooby Doo, “Ruh Roh Raggy!” So if the officers at the Copyright Office are unconstitutional appointments, and the registrations issued by the Copyright Office aren’t valid, and valid registrations are a jurisdictional requirement . . . no courts have jurisdiction to hear any copyright cases. (Except for the renegade Seventh Circuit which held that registration is a case processing rule, and not a requirement for jurisdiction. I know what you’re thinking: Judge Posner saves copyright in Illinois, isn’t. that. just. sooooooooo. typical. Though, the Circuit would still have to reject cases if it strictly follows the registration rules. Every pending copyright case lacks jurisdiction. And no one can bring a new case either. The end.

Have a happy Wednesday.

copyright litigation attorneys

Supreme Court to hear Appointments Clause challenge; Ramifications for the Copyright Royalty Board litigation

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Filed under Appointments Clause, Copyright Royalty Board

On Monday, the Supreme Court granted cert in Free Enterprise Fund and Beckstead and Watts, LLP, Petitioners v. Public Company Accounting Oversight Board, et al. This is news that will almost certainly have ramifications for the pending Appointments Clause challenge of the Copyright Royalty Board.

The two cases

The facts in Free Enterprise Fund share many similarities with those in the Copyright Royalty Board litigation. The Securities and Exchange commission is comprised of five officers who are appointed by the President with the advice and consent of the Senate. The Chairman of the SEC serves at the pleasure of the President, while the four other officers can only be removed for cause. The Commission, in turn, appoints a Public Company Accounting Oversight Board,  after consultation with the Chairman of the Board of Governors of the Federal Reserve and the Secretary of the Treasury. The SEC is empowered to set Board rules and procedures, to overturn any sanction proposed by the Board, to limit or relieve the Board of its powers, and remove members of the board for cause.

To quickly review, in the Copyright Royalty Board litigation, the Librarian of Congress is appointed by the President with the advice and consent of the Senate. There are no limitations on the President’s power to remove the Librarian of Congress. The three Copyright Royalty Judges are appointed by the Librarian of Congress after consultation with the Register of Copyrights, an officer who is also appointed by the Librarian of Congress. (I somehow made a mistake on this not inconsequential fact in an earlier post on this case.) The Librarian of Congress may remove a Copyright Royalty Judge for cause. Determinations by the Copyright Royalty Judges are appealed to the United States Court of Appeals for the D.C. Circuit.

The Appointments Clause

According to the Appointments Clause, Congress may only vest the power to appoint inferior officers in the President, the Courts of Law, or the Heads of Departments. In Freytag v. Commissioner of Internal Revenue, a majority of the Supreme Court held that a Head of a Department must be the head of a “Cabinet-level department[]” that is “limited in number and easily identified.” Four concurring justices adopted a less strenuous test for a Head of a Department stating that one need be only a head of any agency “immediately below the President in the organizational structure of the Executive Branch,” including “all independent executive establishments.” The D.C. Circuit in Free Enterprise Fund rejected the test set forth by the majority in Freytag — standing precedent — and instead adopted the less potent test used in the concurrence:

In Freytag, the Supreme Court described Departments as being “like the Cabinet-level departments,” 501 U.S. at 886 (emphasis added), which are “limited in number and easily identified,” id. Although the Court did not identify the precise characteristics of “Cabinetlike” departments and reserved the issue of whether independent agencies are departments, id. at 887 n.4, four Justices urged that “Departments” should be understood to encompass “all agencies immediately below the President in the organizational structure of the Executive Branch,” including “all independent executive establishments,” id. at 918-19 (Scalia, J., joined by O’Connor, Kennedy, and Souter, JJ, concurring in part and in the judgment) (hereinafter “Concurring Op.”). They reasoned that the Framers “chose the word ‘Departmen[t]’ . . . not to connote size or function (much less Cabinet status), but separate organization – a connotation that still endures even in colloquial usage today.” Id. at 920. Noting that the Constitution makes no reference to the term “Cabinet,” id. at 916-17, and that the Court has not held that “‘the Heads of Departments’ are Cabinet members,” id. at 917, the concurring justices observed that even the sparse history of the Appointments Clause included the 1792 Act creating a Post-Master General, who, while not a cabinet member, had power to appoint an assistant and deputies, id. As Congress has continued to empower non-Cabinet officers to appoint inferior officers, id. at 918, the concurring justices cautioned that to conclude such action violated the Appointments Clause would “cast[] into doubt the validity of many appointments and a number of explicit statutory authorizations to appoint,” id.

Thus, on appeal, the Supreme Court will address an issue in Free Enterprise Fund that is almost directly on point to the Appointments Clause challenge of the Copyright Royalty Board. If  the SEC is found to be a Department, under whatever test the Supreme Court applies, the appointment of the Copyright Royalty Judges will likely stand. Likewise, if the Supreme Court gives the Appointments Clause teeth and finds that the SEC isn’t a Department, the appointment of the Copyright Royalty Board will likely be held to transgress the Constitution.

There are two potentially substantive differences between Free Enterprise Fund and the Copyright Royalty Board litigation, one of which looks to me like a red herring, the other may be a game changer. The red herring is that the Library of Congress is sometimes thought of as a legislative branch establishment and not part of the executive. I think the importance of this fact can be overstated since the Librarian of Congress is appointed by the President.

The potential game changer is that the Copyright Royalty Judges are appointed by one person who answers directly to the President. The board in Free Enterprise Fund, in contrast, is appointed by the five Securities and Exchange commissioners. Part of the theory underlying the Appointments Clause is that it’s integral to have a consolidated chain of command so that you know whose head must roll if an inferior officer is underqualified or makes a bad decision. Having five people select an appointment makes for an attenuated chain of command.

So what now?

To be completely honest, as I am not an appellate litigator, or any type of litigator, I’d be interested to hear any of your more informed opinions on whether the Copyright Royalty Board litigation will be stayed pending the upcoming Supreme Court decision.

Update: Word comes via the legal blog grapevine (thanks again!) that there is no set course of action that an appellate court will follow in this circumstance. A court may refrain from deciding a case because they either don’t want to be wrong or decide an issue that they are not forced to address. Some courts, alternatively, will jump the Supreme Court to give the tribunal the benefit of its analysis, or find that it is able to distinguish the facts and proceed accordingly.

Thanks to the wonderful SCOTUS blog for the collection of documents:

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Royalty Logic’s Appointments Clause challenge of the Copyright Royalty Judges

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Filed under Appointments Clause, Copyright Royalty Board

As I mentioned last week,  Royalty Logic, a royalty collection company that seeks to compete with SoundExchange, filed a motion to the Court of Appeals of the District of Columbia arguing that the appointment of the Copyright Royalty Judges transgresses the Appointments Clause.    I thought it’d be worthwhile to take a closer look at Royalty Logic’s Appointments Clause challenge and the history behind the creation of the Copyright Royalty Board.

Background

President Bush signed the Copyright Royalty and Distribution Reform Act into law in 2004.  The legislation created the Copyright Royalty Board structure, under which three Copyright Royalty Judges determine, among other things, the rates for the statutory licenses collected by the United States Copyright Office under 17 U.S.C. Sections 112(e), 114, 115, 116, 118, 119 and 1000.  Why would Congress delegate the determination of the statutory rates to a third party?  WIlliam Patry wrote a fascinating post that reached this general topic (we’ll discuss Patry’s post more later):

Congress decided that adjusting rates in the statute was not the way to go: too much time would go by, there had to be bills introduced, hearings, haggling, the whole political thing. Better to fob the job off to someone else (and then Congress could come in as the white knight and save the day if the decision was too favorable to one side: bad agency, bad agency!).

The Librarian of Congress is appointed by the President with the advice and consent of the Senate.  The three Copyright Royalty Judges are appointed by the Librarian of Congress “after consultation” with the Register of Copyrights, an officer also appointed by the Librarian.  [I made somehow made a mistake on this fact on an earlier rendition of this post.]  The Copyright Royalty Judges who decided the order at issue are James Scott Sledge (a retired United States Bankruptcy Judge from Alabama), William J. Roberts (an attorney advisor in the Copyright General Counsel’s Office who was promoted to senior attorney for compulsory licenses), and Stanley C. Wisniewski (an attorney who has provided expert economic testimony in federal court and before Senate and House committees).

The Appointments Clause generally

“He [the President] . . . shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law; but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.”

So, says the Appointments Clause, Art II Clause 2, Section 2 of the Constitution.   Under the Section, a principal officer must be appointed by the President with the advice and consent of the Senate.  Inferior officers, which likely will include the Copyright Royalty Judges, can only be appointed (1) by the President; (2) the President with the advice and consent of the Senate; (3) by the Courts of Law; or (4) by the Heads of Departments.

The Supreme Court has forwarded two policy aims underlying the Clause.

(1) Limit the possibility for corruption by disallowing legislators the power to both create offices and make appointment to the offices

The first rationale for the Appointments Clause, as discussed by Justice Scalia in his concurrence in Freytag, is to limit the corruption often associated with combining the power to create offices with the power to appoint officers.  As Justice Scalia discussed, “The foremost danger was that legislators would create offices with the expectancy of occupying them themselves. This was guarded against by the Incompatibility and Ineligibility Clauses, Article I, § 6, cl. 2. But real, if less obvious, dangers remained. Even if legislators could not appoint themselves, they would be inclined to appoint their friends and supporters. This proclivity would be unchecked because of the lack of accountability in a multimember body.” [citation omitted.]

(2) Avoid diffusion of power

A second rationale for the Appointments Clause is that it prevents Congress from distributing power too widely by limiting the actors in whom Congress may vest the power to appoint.  As forwarded by Justice Blackmun in Freytag, the Founders intended that Congress only be able to vest appointment in the President, who is accountable to the public, or a Department Head who also “shares accountability to the people.”

Irony

The Copyright Royalty Board is not Congress’ first attempt to delegate the responsibility of setting statutory royalty rates.  The Copyright Royalty Tribunal (born 1976, died 2003) consisted of members appointed directly by the President, upon advice and consent.  This method of appointment, according to the theory underlying the Appointments Clause, should have limited the possibility for corruption by both eliminating Congress’ ability to directly appoint cronies to positions they created, and vesting the responsibility and potential political fallout from the appointments in the President, who is personally accountable to the people.

How did it go?  Not so well, apparently.  Here’s what William Patry, who served as policy planning adviser to the Register of Copyrights, had to say about the death of the CRT.  I’ve included a large snipit because Patry’s post provides the best primary source available for understanding the formation of the CRB.

The CRT was originally a five member tribunal, in the legislative branch, with members appointed by the President. Other than the very first chair, Tom Brennan, the former chief counsel of the Senate IP Subcommittee, who helped write the legislation that created his chairmanship, no subsequent permanent CRT member had any real experience with copyright law; some had none; some weren’t even lawyers (there were former boxers, for example, and I don’t mean Barbara or the dog). As one Senator described the situation, the CRT was a dumping ground for unqualified people to whom the President owed a small favor.

The first years of the CRT were marked by incessant appeals of its decisions. It was only the deep compassion of the DC Circuit in affirming decision after decision that kept the CRT afloat. Eventually, with the initial rate setting and challenges out of the way, the CRT was reduced to three members, but even three was too many; even one full-time member was too many. In data I compiled for its abolition, I discovered that on average, the CRT had only two weeks of hearings a year. This cried out for ad hoc adjudication. That opportunity came in 1993.

In 1993, as a result, in my opinion, of the appointment as chair of the then-wife of a former Congressman from Nebraska, the CRT simply imploded. It was a soap opera worthy of prime-time television, but for the substantial amounts of money that were involved. We didn’t set out to abolish the CRT, the CRT invited it. I was minding my own business in the subcommittee’s offices in the Cannon House Office Building. We began to get visits from different CRT members and the General Counsel, complaining about the fights that were destroying the place. For example, two members (a majority) would vote to change a regulation and send it to the Federal Register. The Federal Register would send it back because the change had not been transmitted by the chair; the chair, who was on the losing side of the vote, refused to transmit it. Moreover, we were told by the private sector that members were lobbying the private sector ex parte. No agency can function like that; the CRT was dangerously out of control.

So, given the CRT’s struggles, it shouldn’t be surprising that in 1994 Congress passed legislation that put the choice of the panel in the hands of the Librarian of Congress.  At its core, the decision appears to be motivated by pragmatism.  The CRTs were not high profile enough positions for the President to incur public derision if he appointed unqualified individuals.  There was a need to put the appointments into the hands of someone who, for lack of a better word, cared more about a functioning statutory royalty regime.

In light of the CRT’s issues, it would be easy to view the Appointments Clause as theory gone wrong, at least in terms of political appointees for positions of only niche-interest.  But we should, perhaps, pause for a moment to discuss how the world has changed since 1993.  Would the President be able to appoint unqualified candidates in the age of the internet?  It feels to me like the that type of story would be covered in niche-legal blogs on Monday, migrate to generally legal blogs by Wednesday, and be an embarrassing item in general publications by Thursday or Friday.  But who knows? Regardless, there is an interesting symmetry to the fact that William Patry’s post provides the best policy argument for both why we should read the Appointments Clause laxly in regards to the Copyright Royalty Judges, and why it should be given teeth.

The Librarian of Congress is not a “head of department” and cannot appoint inferior officers, such as the CRJs, without violating the Appointments Clause

Royalty Logic’s strongest argument targeting the Copyright Royalty Judges under the Appointments Clause is, if the CRJs  are inferior officers, the Librarian of Congress must be a “head of department” to wield the power to make the appointments.

In Freytag v. commissioner, 501 U. S. 868 (1991), the Supreme Court held that vesting the Chief Judge of the United States Tax Court, an Article I Court, with the power to appoint special trial judges did not transgress the structure of separation of powers embodied in the Appointments Clause.  The Supreme Court, however, broke sharply in their rationale for the decision.

The majority opinion, delivered by Justice Blackman, and joined by Justices Rehnquist, White, Marshall, and Stevens, found that the appointment of the special trial judges did not transgress the Appointments Clause because the United States Tax Court was a “Court of Law,” which along with the President and “heads of department,” is granted the power to make appointments under the Constitution.  In doing so, the majority read the phrase “heads of departments” narrowly to encompass the principals of Cabinet level departments:

This Court for more than a century has held that the term “Departmen[t]” refers only to “a part or division of the executive government, as the Department of State, or of the Treasury,’” expressly “creat[ed]” and “giv[en] . . . the name of a department” by Congress. Germaine, 99 U.S. at 99 U. S. 510-511. See also Burnap, 252 U.S. at 252 U. S. 515 (“The term head of a Department means . . . the Secretary in charge of a great division of the executive branch of the Government, like the State, Treasury, and War, who is a member of the Cabinet”). Accordingly, the term “Heads of Departments” does not embrace “inferior commissioners and bureau officers.” Germaine, 99 U.S. at 99 U. S. 511.

Confining the term “Heads of Departments” in the Appointments Clause to executive divisions like the Cabinet-level departments constrains the distribution of the appointment power just as the Commissioner’s interpretation, in contrast, would diffuse it. The Cabinet-level departments are limited in number, and easily identified. Their heads are subject to the exercise of political oversight, and share the President’s accountability to the people.

If the Court of Appeals for the District of Columbia elects to adopt the definition of “heads of departments” presented by the majority in Freytag, the appointment of the Copyright Royalty Judges will likely be held to transgress the Appointments Clause. The Librarian of Congress, under a reasonable appraisal, is not one of the “few in number” and easily identifiable “Cabinet-level” department heads who is “personally accountable to the people.”  I may be mistaken, but I’m not aware of too many people who would consider the position to be a launching pad for a political career.   The Librarian’s direct accountability to the people would seem to me to be attenuated at best.

Indeed, people much smarter than I have argued that similar appointments situations are cut-and-dry violations of the Appointments Clause.  John F. Duffey, a law professor at GWU, applied the majority decision in Freytage when he created a stir a couple of years ago by arguing that the method of appointing administrative patent judges was “almost certainly unconstitutional.”

I  harbor doubts, however, that the  Court of Appeals for the District of Columbia will elect to adopt the majority decision’s definition of principal officer.  The Supreme Court in Freytag broke five-four with only one current Justice siding with the majority and three current Justices adopting the concurring position.  Given the forward-leaning nature of the majority opinion, I wouldn’t be surprised if the Court of Appeals uses the definition of principal officer from the concurring decision.

The concurrence, delivered by Justice Scalia and joined by Justices O’Connor, Kennedy and Souter, found that the appointment of special trial judges by the Chief Justice of the U.S. Tax Court didn’t violate the Appointments Clause because the Chief Judge was a head of a department.  In reaching this decision Justice Scalia used no less than three different definitions of what constitutes a department for purposes of the Appointments Clause:

  • “‘Departments’ means all independent executive establishments”;
  • Departments are “all agencies immediately below the President in the organizational structure of the Executive Branch”;
  • A Department is a “freestanding, self-contained entity in the Executive Branch, whose [principal officer] is removable by the President (and, save impeachment, no one else).”

All three of Justice Scalia’s tests for what constitutes a department require that the body be in the Executive Branch  — a literal reading of Justice Scalia’s opinion would imply that if the Library of Congress is in the Executive Branch, the appointments of the CRJs would be proper; and conversely, if the Library of Congress is part of the Legislative Branch then the appointments of the CRJs would violate the Appointments Clause.  Accordingly, much of Royalty Logic’s and the Department of Justices’ briefs battle on the issue of whether the Library of Congress is an executive or legislative agency.

Notwithstanding Justice Scalia’s language to the contrary, the argument over whether the Library of Congress is a legislative or executive agency appears to me to be irrelevant.  Scalia based his concurring position on the rationale that the Appointments Clause was designed to limit Congress’ ability to create new offices, and appoint people they owe political favors, without checks, to those same offices.  Regardless of which branch a department is located in, if an inferior officer is selected by a principal appointed by the President, the check on corruption remains the same.  What difference does it make if the Library of Congress leans more towards the Executive or Legislative Branch?  As long as the President appoints the person who picks the CRJs, Congress will not be able to insert people they owe favors into positions they legislate without first having to get someone appointed by the President, and whose actions reflect on the President,  to first sign on.

Potential for Supreme Court review

Royalty Logic’s appeal looks to me to be a strong candidate for Supreme Court review, even if the appointment of the CRJs is not found to violate the Appointments Clause.   The makeup of the Supreme Court has changed significantly since it last addressed a similar Appointments Clause issue, and the existing case law is a mess that merits refinement.

music attorneys

Filings from D.C. Court of Appeals review of Copyright Royalty Board order

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Filed under Appointments Clause, Copyright Royalty Board

On Thusday, the D.C. Court of Appeals heard oral arguments on the Copyright Royalty Board’s May 1, 2007 order concerning royalty rates on digital audio transmissions and ephemeral reproductions of sound recordings.  Since the briefs aren’t available on the federal docket, I thought it might be of use to some of you to post them here.  Thanks to all of the parties who have made the filings available.  I’ll continue to update the links if any more trickle in.

In re Digital Performance Right in Sound Recordings and Ephemeral Recordings, Copyright Royalty Judges 2005-1 CRB DTRA (2007)  (order)

Department of Justice (in defense of the order)

SoundExchange (in defense of the order)

Royalty Logic (arguing that th order should be vacated because the CRJs are unconstituional under the appointments clause)

Noncommercial broadcasters (arguing that the order should be modified to establish annual flat per-station fees for noncommercial services; and remanded to adjust the notice and recordkeeping terms)

music attorneys