Friday, July 6, 2012

D.C. Circuit Strikes Copyright Judges' Removal Protection

A three-judge panel of the D.C. Circuit ruled today in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board that the appointment of Copyright Royalty Judges, or CRJs, violated the Appointments Clause.  The court remedied the violation by reading out of the CRJ statute the CRJs' for-cause removal provision and permitting the Librarian of Congress to remove CRJs at will.  The court said that this alone changed CRJs from "Officers" to "inferior Officers" under the Appointments Clause and allowed them to be appointed by the Librarian of Congress (as provided by statute), and without Presidential nomination and advice and consent of the Senate.

The ruling simply modifies a characteristic of the CRJs' job to put them in line with the Appointments Clause (by making them inferior officers) and sends the case back to the lower court for consideration of the merits.  It probably doesn't break any significant new ground under the Appointments Clause or separation of powers (even if this kind of ruling is relatively rare).  The court looks to both the power of the position and to its removability to determine whether it's an "Office" or "inferior Office," but the court turns it from an "Office" into an "inferior Office" by focusing only on removability.  The court's remedy--reading out of the CRJ statute the for-cause removal and leaving CRJs with only at-will removal--takes a page from the Supreme Court's playbook in Free Enterprise Fund v. PCAOB.

The case arose out of a challenge to a CRJ decision on licensing terms between an association of noncommercial webcasters who transmit digital music over the internet in high schools and colleges and owners of the songs' copyrights.  CRJs have statutory authority to set these terms, subject to review, discussed below, when the parties can't come to an agreement.  The association, Intercollegiate, didn't like the terms set by the CRJ and brought this case arguing that the CRJ is unconstitutional under the Appointments Clause.

That Clause, Article II, Section 2, Clause 2, says that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . Officers of the United States," but that "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."  Intercollegiate lodged a two-prong attack: First, it argued that CRJs were "Officers" and thus required Presidential nomination and Senate advice and consent (and that their appointment by the Librarian of Congress therefore violated the Appointments Clause); and second, it argued that the Library of Congress wasn't a "Department" (and that therefore Congress couldn't vest CRJs' appointment in its head, the Librarian of Congress, and their appointment was therefore unconstitutional).

The court agreed on the first argument, but disagreed on the second.  The court, principally applying Edmond v. United States, ruled that the CRJs were "Officers," not "inferior Officers" the the purpose of the Appointments Clause.  It wrote that the CRJs were supervised by the Librarian of Congress and the Registrar, but only as to pure issues of law, leaving the CRJs with vast discretion and authority to set rates on their own.  It said that CRJs could only be removed by the Librarian of Congress for misconduct or neglect of duty.  And it wrote that the CRJs' rate determinations were not reviewable or correctable by any other officer or entity within the executive branch (although they are reviewable by the D.C. Circuit).  Thus it ruled that the three Edmond factors lined up in favor of "Officer," not "inferior Officer."

But the court didn't stop there.  Following the Supreme Court's approach in Free Enterprise Fund, the court severed the removability provision for CRJs--the one that allows the Librarian of Congress to fire them only for misconduct or neglect of duty--and read out the "misconduct or neglect of duty" part.  The effect was to leave CRJs with no protection against termination--and to allow the Librarian of Congress to remove them at will.  This alone, the court ruled, turned the otherwise "Officers" into "inferior Officers."  And this allowed Congress to vest their appointment in the Librarian of Congress--exactly what Congress did--and saved them.  And: "We further conclude that free removability constrains their power enough to outweigh the extent to which the scope of their duties exceeds that of the special counsel in [Morrison v. Olson]."

As to Intercollegiate's second argument, the court ruled that the Library of Congress is a "Department" under the Appointments Clause.  It ruled that the Library's power "to promulgate copyright regulations, to apply the statute to affected parties, and to set rates and terms case by case" are associated with executive authority, even if there are some aspects of the Library (like the Congressional Research Service) that make it look like a legislative agency.  The Librarian of Congress is the Library's "head," and so the appointment of the now-inferior-officers is valid.

SDS

http://lawprofessors.typepad.com/conlaw/2012/07/dc-circuit-strikes-copyright-judges-appointment-process.html

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