Copyright Royalty Board Structure Declared to be Unconstitutional

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On Friday, the U.S. Court of Appeals for the District of Columbia Circuit found that the three-judge board of the Copyright Board violates the Appointments Clause of the Constitution. The Appointments Clause requires all officers who hold ‘significant authority’ to be appointed by the President with confirmation of the Senate. However, the court found that the three-judge panel of the Copyright Royalty Board, which lays down the rates that broadcasters have to pay for copyright licenses, was appointed by the Librarian of Congress, rather than by the President of U.S.

However, the court apparently found a way out of the constitutional convolution and held that granting the Librarian of Congress the authority to fire the judges would straighten out and fix the problem. Writing for the Court of Appeals, Judge Stephen Williams wrote 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.”

In the case of Intercollegiate Broadcasting System Inc v. Copyright Royalty Board et al, at the U.S. Court of Appeals, District of Columbia, Intercollegiate Broadcasting System Inc challenged the rates fixed by the Copyright Royalty Board for educational and noncommercial webcasters. The IBS, which is an association of college radio stations transmitting music over the internet, argued that the members of the copyright board exercised significant authority with limited supervision, and therefore, qualified as principal officers under the Appointment Clause of the Constitution. Hence, they must be appointed by the President with Senate confirmation as envisaged under Article III. As the members of the Copyright Royalty Board were appointed by the Librarian of the Congress, they did not possess the authority as their positions were unconstitutional under the Appointment Clause.

  

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The appeals court agreed that the members of the Copyright Royalty Board carried ‘significant authority’ and “Billions of dollars and the fates of entire industries can ride on the Copyright Royalty Board’s decisions.” The judges of the Copyright Royalty Board also enjoy great job security under the prevalent structure as the Librarian of Congress, their current appointing authority, can remove them only in cases of misconduct or neglect of duty.

The appeals court concluded that handing greater power to the Librarian of Congress as the appointing authority, to also remove the members of the Copyright Royalty Board would make the Copyright Royalty Board judges subject to greater supervision and accountability and reduce their status to ‘inferior’ as opposed to ‘significant.’

Fritz Kass, the volunteer CEO of Intercollegiate said that the court should have allowed Congress to change how the judges are appointed instead of attempting to fix the constitutional problem on its own. Intercollegiate, however, was happy that the court found the board to be unconstitutional and vacated the order of the Copyright Royalty Board that tried to impose unreasonably high rates on college webcasters.