July 6 (Reuters) - The Copyright Royalty Board, which sets
the rates broadcasters have to pay for copyright licenses, runs
afoul of the Constitution, a federal appeals court ruled on
The U.S. Court of Appeals for the District of Columbia
Circuit found that the three-judge board, appointed by the
Librarian of Congress, violates the Appointments Clause of the
Constitution, which requires officers with significant authority
be appointed by the president with Senate confirmation. But the
court also found that it could fix the constitutional problem by
giving the Librarian of Congress greater ability to fire the
judges on the board.
"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," Judge
Stephen Williams wrote for the three-judge panel.
Intercollegiate Broadcasting System Inc, an association of
college radio stations that transmit music over the Internet,
challenged the rates that the Copyright Royalty Board set for
educational and noncommercial webcasters. The organization
argued that the judges exercised significant authority with
limited supervision and, therefore, qualified as principal
officers that must be appointed by the president with Senate
confirmation under the Appointments Clause.
The three-judge panel agreed that the judges carry
significant authority and that the rates they set could mean
life or death for broadcasting companies. "Billions of dollars
and the fates of entire industries can ride on the Copyright
Royalty Board's decisions," the panel said.
What's more, under the current structure the judges enjoy
significant job security. The Librarian of Congress can only
remove them for misconduct or neglecting their duties. That
independence, the panel concluded, was the constitutional
problem. Giving the Librarian of Congress greater power to
remove the judges would make them inferior officers that could
be appointed by the Librarian.
The panel sent the case back to the board to determine
suitable royalty rates.
Fritz Kass, the volunteer CEO of Intercollegiate, said the
group was pleased the court found the board unconstitutional and
vacated the order requiring college webcasters to pay
unreasonably high rates. However, the court should have allowed
Congress to change how the judges are appointed instead of
attempting to fix the constitutional problem on its own, he
The Justice Department, which represented the Copyright
Royalty Board, did not immediately respond to a request for
The case is Intercollegiate Broadcasting System Inc v.
Copyright Royalty Board et al, U.S. Court of Appeals for the
District of Columbia Circuit, No. 11-1083.
For the Intercollegiate Broadcasting System: Christopher
Wright of Wiltshire & Grannis.
For the Copyright Royalty Board et al: Scott McIntosh and
Tony West of the Justice Department.
(Reporting By Terry Baynes)
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