The Copyright Royalty Board will not come to a shuddering halt any time in the immediate future. On Feb. 24, the U.S. District Court for the District of Columbia rejected a motion for a preliminary injunction sought by the Web radio outfit Live365, which is challenging the board’s constitutionality based on the process by which members of the three-judge panel are appointed.
The Librarian of Congress appoints the three judges on the board, which determine the rates and terms for statutory copyright licenses.
Live365 filed the motion for a preliminary injunction Sept. 2 in an attempt to halt the board’s Webcasting III proceedings, which will determine royalty rates from 2011 to 2015.
As Live365 sees it, the three judges’ relative independence and wide-ranging authority to direct billions of dollars between broadcasters and copyright holders through their decisions makes them “principal officers,” as opposed to “inferior officers.” Under the appointments clause of the U.S. Constitution, principal officers must be appointed by the president.
In addition, Live365 argues the appointments are unconstitutional even if the judges are inferior officers because the Librarian of Congress is a member of the legislative, not executive, branch.
In his 32-page opinion, Senior U.S. District Judge Reggie Walton rejected a preliminary injunction because, among other reasons, he did not find that Live365 was likely to prevail on the merits of either of its arguments.
However, Walton acknowledged concerns raised by Judge Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit in a separate case in July 2008. Walton wrote that the appointments clause is murky, concluding that it has “essentially created a gray area where cases will inevitably fall due to the case-by-case analysis lower courts are required to conduct as a result of the limited guidance the Framers of the Constitution provide.”
Walton also rejected a motion to dismiss for lack of subject matter jurisdiction by the royalty board, which argued that the case should have gone straight to the D.C. Circuit.
Although appeals of the royalty board’s decisions go directly to the appeals court, Walton wrote that this case belonged in the district court because it was a facial challenge to the board’s authority.