Separation of Powers - Appointments Clause - D.C. Circuit Holds Appointment of Copyright Royalty Judges by Librarian of Congress Violates Appointments Clause

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SEPARATION OF POWERS--APPOINTMENTS CLAUSE--D.C. CIRCUIT HOLDS APPOINTMENT OF COPYRIGHT ROYALTY JUDGES BY LIBRARIAN OF CONGRESS VIOLATES APPOINTMENTS CLAUSE.--Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board, 684 F.3d 1332 (D.C. Cir. 2012), reh'g and reh'g en banc denied, No. 11-1083 (D.C. Cir. Aug. 28, 2012).

When attempting to insulate an executive branch officer from presidential control, Congress faces a dilemma. The Constitution's Appointments Clause delineates the required appointment mechanisms for "Officers of the United States." (1) "[P]rincipal" officers must be appointed by the President and confirmed by the Senate, while inferior officers may be appointed by the President alone, courts, or heads of executive departments, as Congress chooses. (2) Additionally, a restriction on an officer's removal signals the officer's "principal" status. (3) Taken together, it is challenging for Congress both to vest appointment of an officer in someone other than the President (making the appointee an inferior officer) and to shield that officer from removability at will (indicating that she may be a principal officer). Recently, in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board, (4)the D.C. Circuit ruled that Congress had failed to navigate these constitutional shoals successfully. The court held that Copyright Royalty Judges (CRJs) are principal officers, and so their appointment by the Librarian of Congress violated the Appointments Clause. (5) To resolve the constitutional problem, the court struck down the restriction on the CRJs' removal, thereby rendering them inferior officers. (6) The court had freedom in its choice of remedy, and to preserve the CRJs' political insulation, the court should have considered changing their appointment mechanism.

In 2004, Congress created the Copyright Royalty Board. (7) A component of the Library of Congress, (8) the Board consists of three CRJs and their staff. (9) The CRJs are appointed by the Librarian of Congress (10) to six-year terms, (11) are subject to appointment qualifications, and can be removed only for cause. (12) The Librarian of Congress is appointed by the President, confirmed by the Senate, (13) and removable at will by the President. (14)

Holders of copyrights for sound recordings have exclusive rights to performances of their works transmitted to public audiences over the internet. (15) To encourage bargaining between copyright owners and would-be infringers,16 federal law provides for statutory licenses (17) at "reasonable rates and terms of royalty payments." (18) Those rates and terms should approximate "the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller," (19) while ensuring a fair return for the parties, and while maximizing the public good and minimizing the impact on industry. (20)

In 2008, the CRJs initiated proceedings to set default webcasting license rates for 2011-2015. (21) After many parties settled, four participated in the Board's formal process. (22) Two parties urged the CRJs to base the statutory licenses on their settlement agreement, a view supported by twenty-four other noncommercial webcasters. (23) Intercollegiate Broadcasting System, Inc., an association of educational webcasters, objected, arguing that the settlement agreement set too high a minimum fee and encouraging the CRJs to create new categories for "small" and "very small" broadcasters. (24) The CRJs rejected these arguments and accepted the settlement terms. (25)

The D.C. Circuit vacated. (26) Writing for a unanimous panel, Senior Judge Williams (27) held that the CRJs were principal officers of the United States, who must be appointed by the President and confirmed by the Senate, and so their appointment by the Librarian of Congress violated the Appointments Clause. (28) Intercollegiate Broadcasting pressed two alternative constitutional challenges (29): either the CRJs were principal officers, (30) or they were inferior officers, who had to be appointed by a "Head of Department," which the Librarian of Congress is not. …