This morning the U.S. Court of Appeals for the D.C. Circuit released its opinion in SoundExchange, Inc. v. Librarian of Congress. A three-judge panel consisting of Judges Ginsburg, Henderson, and Kavanaugh, largely rejected SoundExchange's challenge to the royalty rate set by the Copyright Royalty Board that satellite radio services must pay to copyright owners for the use of sound recordings. The panel concluded that the rate was not arbitrary, capricious, or unsupported by substantial evidence, but found (as the government conceded) that the Board failed to set a rate for "ephemeral copies."
While he joined the court's opinion in full, Judge Kavanaugh wrote a brief concurrence noting a potential separation-of-powers question raised by the manner in which Board members are appointed.
As this case demonstrates, billions of dollars and the fates of entire industries can ride on the Copyright Royalty Board’s decisions. The Board thus exercises expansive executive authority analogous to that of, for example, FERC, the FCC, the NLRB, and the SEC. But unlike the members of those similarly powerful agencies, since 2004 Copyright Royalty Board members have not been nominated by the President and confirmed by the Senate. Instead, as a result of a 2004 statute, Board members are appointed by the Librarian of Congress alone. Board members are removable by the Librarian, but only for cause. Moreover, in exercising important duties, Board members are apparently unsupervised by the Librarian of Congress or by any other Executive Branch official.The new statutory structure raises a serious constitutional issue. Under the Appointments Clause, principal officers of the United States must be nominated by the President and confirmed by the Senate. U.S. CONST. art. II, § 2, cl. 2. Copyright Royalty Board members plainly are officers of the United States. And they appear to be principal officers – not inferior officers – because they are not removable at will and their decisions regarding royalty rates apparently are not reversible by the Librarian of Congress or any other Executive Branch official. See Edmond v. United States, 520 U.S. 651, 662-66 (1997); see also 17 U.S.C. §§ 701, 801-03; Tr. of Oral Arg. at 24 (Government counsel agreeing that Librarian of Congress and Register of Copyrights cannot change copyright royalty rates set by the Board).
If the members of the Board are in fact principal officers, then the present means of appointing Board members is unconstitutional. But no party here has timely raised a constitutional objection. We therefore may resolve the case without deciding whether the Board is constitutionally structured, and so I join the opinion of the Court.
Related Posts (on one page):
- Is the Copyright Royalty Board Unconstitutional? Part III - The Real Deal?
- Is the Copyright Royalty Board Unconstitutional? - Take Two:
- Is the Copyright Royalty Board Unconstitutional?
I'd be curious what the OLC bill review on the 2004 amendments said about this one.
As for the PCAOB case, I imagine the Court will have to address the principal/inferior officer decision. My hope is that it will make clear that Edmond put to rest Morrison v. Olson on this point, viz., to be an inferior officer is to be a subordinate one.
Thus, his framing of the issue seems fair. Either these officers are principal officers or they are inferior officers. If the former, then their appointment is unconstitutional for the reasons he states (principal officers are subject to the full procedure - no exceptions). If the latter, then Congress could provide for one of the exceptions to apply to their appointment. If Kavanaugh assumes (or believes, or has case law saying) that the Librarian of Congress is the Head of a Department, then the current process is fine, Congress has provided that the Board members be appointed by the Head of a Department.
So Kavanaugh's framing of the issue is perfectly fine given his baseline - that these are not employees. If you really believe that the question of employee vs. officer needs to be addressed, it would seem to only be a preliminary step - if you find that the members are officers you still have to proceed to the next step of deciding whether they are principal vs. inferior officers. Kavanaugh has simply skipped this preliminary step by stating that he sees the members as officers of the United States.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1128311
Perhaps an empathetic jurist or European inquisitorial jurist would. But I prefer baseball and umpire analogies for the American judicial system. The umpire isn't supposed to throw off his mask, take his place at the plate, and swing for the stands for one of the teams.
Ruling on the constitutionality of a statute even when it wasn't raised isn't a case of the court "swinging" on behalf of one of the teams, but rather it is the court carrying out its duty to say what the law is (to channel Marshall).
Forgive me in advance as I am but a lowly IP attorney whose experience with Constitutional law is limited to my second year in law school.
With that said, I seem to recall that courts are limited in their ability to opine on the constiutionality of a statue by separation of powers considerations. That is, they can only rule on the validity of a statute when it is a live question in a case. To otherwise rule on such an issue would constitute an opinion on a political question... no?
I generally agree, but I don't think this is a situation where the umpire takes up one side of the other. And I can see steve's point in thinking it a little odd. This situation may be more analogous to the umpire noticing a rule violation (say he sees that the pitcher has a foreign substance on the brim of his hat that he's transferring to the ball) but deciding to ignore it because the opposing team hasn't bothered to complain about it. I suspect most people wouldn't approve of the umpire looking the other way in that case.
At the end of the day, in this particular situation, everybody knew the rules - Kavanaugh didn't spring a trap - it has always been the case that appellate courts do not address issues that were not raised below. Plaintiff's attorneys knew that was the rule and knew that they needed to make sure that they included everything they thought might be relevant. They didn't, and so they lose. The question raised by Kavanaugh will have to wait for the next time the Board makes a decision a party doesn't like.
In the US, the reluctance of the courts to touch this question if it wasn't raised by the parties has less to do with separation of powers issues (it's not an advisory opinion if the answer to the question actually matters for the case at bar), but rather with a deeply ingrained respect for the adversarial system, the theory being that the lawyers for both parties can do their research better than the three highly qualified judges on the panel.
2. Usually, you try to avoid the constitutional issue.
3. This is a clear example of why a term such as "judicial activism" has no content. In my mind, the "conservative" judicial philosophy would not countenance this concurrence. But is this judicial activism? Or just a judge flogging his pet cause? (Or, for the cynical, an attempt to get into future admin law casebooks)
4. Finally, for those who wonder why a judge would not raise these issue- it's because the parties didn't contest them! It's a bit of an unfair surprise for judges to make rulings based on an issue that the parties did not brief or litigate (save a few exceptions like the jurisidiction of the court). You might say that there is a "no harm, no foul" because this concurrence did not affect the outcome, but had the parties even known it was an issue, they might have prepared their cases differently. In any event, it will give the Judge something to cite in the future when he needs to go back to his hobbyhorse.
Unlike the Federal Election Commission, however, the Office of the Register of Copyrights is not open to any charge that it is violative of the Appointments Clause. The Register is appointed by the Librarian of Congress, who in turn is appointed by the President with the advice and consent of the Senate. By the nature of his appointment the Librarian is an "Officer of the United States, with the usual power of such officer to appoint 'such inferior Officers [i.e., the Register], as [he] thinks proper." This case is accordingly different from either Buckley or Springer, and the appointment of the Register accords fully with the requirements of the Appointments Clause in connection with the appointment of executive officers clothed with the power to issue regulations.
Assuming there were in fact oral arguments, could a judge raise this issue himself by framing a question that illuminates the possible unconstitutionality of the statute? Thus, giving the lawyers the opportunity to raise the issue before the bench even though it was absent from their written pleadings.
While I suppose it is possible, that would be a horrifically bad idea. Oral arguments, while fund, lively, and a great opportunity to explore the arguments, are not a good place to raise completely novel area (esp. constitutional issues). The briefs are the primary source of information for the judges, so much so that some Justice (see Thomas, Clarence) don't even both much with oral arguments. The Judge could raise the question, but the lawyers wouldn't have the requisite cases and knowledge at the ready, and in a complicated area like this, would likely be the equivalent of sandbagging them.
"Although the Library of Congress was established in 1800, the office of Librarian was not created until 1802. This 1802 law stipulated that the Librarian of Congress was to be appointed by the president---not by the Congress. In fact, Congress had no formal role in the appointment process until 1897, when the Senate gained the privilege of confirming the president's selection. "
http://www.loc.gov/loc/legacy/librs.html
At the risk of massive thread drift... but speaking of novel approaches raised at oral argument before the Supreme Court...
The Fourth Amendment Blog recently brought to my attention a paper by Peter A. Winn, “Katz and the Origins of the 'Reasonable Expectation of Privacy' Test”, forthcoming in the McGeorge Law Review, .
In short, the now well-known REP test was a novelty brought up at oral argument. From the paper's abstract:
As, over the years, I am becoming more and more convinced that Katz was a profound misstep, I'm pursuadable that no matter how fun oral argument might be, it's really not a good place to bring up new way to look at the Constitution.
If the CRB's appointment is invalid, then Sound Exchange's authority (and monopoly) likely goes out the window.
This is, I understand, at issue in another suit, so they may have wished to avoid any adverse holding at this time.
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