D.C. Circuit Declares Copyright Royalty Board Unconstitutional

By Tanya Roth, Esq. on July 10, 2012 | Last updated on March 21, 2019

The Copyright Royalty Board's composition is unconstitutional, says the D.C. Circuit Court of Appeals.

The D.C. Circuit's opinion came out last Friday and found the board, which consists of three judges, to be in violation of the Appointments Clause of the Constitution, reports Thomson Reuters News & Insight.

The case was brought by the Intercollegiate Broadcasting System Inc., an association of college Internet radio stations. The case challenged the rates set by the board and the structure of the board.

Let's discuss the Appointments Clause for a second here. The Constitution's Appointments Clause can be found in Article II, Section 2 of the United States Constitution.

Article II requires that important officers be appointed by the president and be confirmed by the Senate. An exception is carved out for "inferior" officers, who may be appointed by the president, heads of departments, or courts of law.

The Copyright Royalty Board is charged with the task of determining royalty rates that webcasters must pay for copyright licenses.

The board's current structure allows for three permanent copyright royalty judges to be appointed by the Library of Congress. With significant authority and limited supervision, these judges qualify as "principal officers" instead of "inferior officers," the D.C. Circuit noted.

The D.C. Circuit Court of Appeals followed the Supreme Court's precedent in Free Enterprise Fund v. Public Company Accounting Oversight, and said that the three copyright judges could become inferior officers if the Library of Congress had the full authority to remove the judges. The current structure provides the Library of Congress with a limited removal authority, allowing the judges to be removed only for misconduct or neglecting their duties.

The court vacated and remanded the case and did not address the merits of the other arguments presented in the case.

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