Last month, the DC Circuit Court of Appeals heard oral arguments that raised constitutional questions concerning the Copyright Royalty Board. Intercollegiate Broadcasting Services (IBS) appealed a Board decision last year, and in its appeal it also argues that the appointment of Copyright Royalty Judges violates the Appointments Clause of the constitution.

The US Copyright Act provides for a number of statutory licenses for certain uses of copyrighted works — sound recording licenses for webcasting or internet radio among them. The rates of these licenses are determined by the Copyright Royalty board, an agency in the Library of Congress comprised of three full-time Copyright Royalty Judges who set rates through quasi-judicial proceedings.

IBS makes the same arguments as previous Appointments Clause challenges to the CRB (I touched on a previous Appointments Clause challenge to the CRB before here): either the Copyright Royalty Judges are “principal officers” and must be appointed by the President with the advice and consent of the Senate, or they are “inferior officers”, but the Librarian of Congress is not a head of a department and thus cannot be given the authority to appoint them. It’s an interesting issue, and if IBS succeeds, there’s a potential for huge ramifications in the online music ecosystem, so I thought I’d provide a closer look.

The Appointments Clause

The Appointments Clause, in Article II of the US Constitution, says:

[The President] shall nominate, and, by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

The power to appoint government officials is a significant power, and the Constitutional drafters were aware of its potential for abuse from their experiences with England. The first portion of the Appointments Clause represents a compromise between the drafters of the Constitution who wished to vest appointment power in the legislative branch and those who wished to vest it in the executive.1 The compromise represented what was thought to be the best way to preserve political accountability of government officials while also ensuring that well-qualified officers are appointed.

The second part of the Appointments Clause, which addresses inferior officers, was almost an afterthought — added with little debate, most likely for pragmatic reasons.2 Even in the 18th century, it was recognized that requiring Presidential nomination and Senate confirmation for every single government officer would be terribly inefficient.

On its face, the Appointments Clause seems fairly straight-forward. But when you get into its details, it can get tricky. What are “officers of the United States”, “inferior Officers”, or “Heads of Departments”? The Constitution doesn’t contain definitions for these terms. There is plenty of detailed scholarship on these questions, but for the purposes of this article, I’ll stick to how the Supreme Court has defined them.

What are Principal and Inferior Officers?

An “Officer of the United States” is, according to the Supreme Court, “any appointee exercising significant authority pursuant to the laws of the United States.”3 Appointees not exercising such authority could be considered mere employees — the Constitution is agnostic on their appointment.4

The Appointments Clause implies two classes of officers — principal and inferior — though it does not delineate between the two. The Supreme Court has also shied away from enunciating a precise rule to distinguish between the two types of officers.5 Instead, it has identified factors to help delineate between principal and inferior officers. Key among these factors is whether an officer is subordinate to another officer. That is, the question of distinguishing between principal and inferior officers is one of hierarchy — principal officers answer primarily to the President, inferior officers report to principal officers (though, it should be noted, this is only a necessary, not a sufficient, condition).6

What is a “department”?

As with principle and inferior officers, the Constitution doesn’t define “Departments”, nor do contemporary texts, like the Federalist Papers. So how should it be defined?

As a threshold matter, the text of the Appointments Clause suggests, and the Supreme Court has confirmed, that Departments refer only to agencies within the Executive branch of the government.7 But which executive agencies? All of them? Or only some of them?

The Supreme Court has not been entirely clear on its answer to this question. In the 1991 case Freytag v. Commissioner, in an opinion that apparently confused four of the nine Justices,8 the Court limited the scope of the term “Departments” in the Appointments Clause to “executive divisions like the Cabinet-level departments.”

But then in 2010, the Court ignored the majority’s conclusion in Freytag and adopted the concurrence’s broader definition and reasoning without comment.9 It would seem then that, for the purposes of the Appointments Clause, a “Department” is any “freestanding component of the Executive Branch, not subordinate to or contained within any other such component.”

In short, the Appointments Clause gives the President the exclusive power to appoint all those who exercise significant authority under US law. For subordinate officers, the Constitution allows Congress to vest appointment in the President, courts of law, or the heads of freestanding, top-level Executive departments.

The Library of Congress

On Wednesday, December 23, 1801, a motion was made to have the newly created Librarian of Congress appointed by the President instead of the Secretary of the Senate and Clerk of the House, but that motion failed. On the 29th, the bill was reported to the Committee of the whole House with appointment vested in the Secretary and Clerk. However, the final bill, passed on January 26, 1802, provided for appointment “by the President of the United States solely.” I’ve been unable to find any record of when or why this change was made — though it has been suggested that the final bill was merely the result of Congress being unable to agree on a candidate for the position.

The mode of appointing the Librarian of Congress did not completely escape attention over the next few decades. On January 26, 1816, Senator Eligius Fromentin reported that “it is difficult to conceive why an officer of both Houses of Congress, as much so as the Clerk of the House of Representatives and the Secretary of the Senate are officers of their respective Houses, should not be appointed by the authority to which he is amenable,” and proposed that that provision of the original Act be repealed and appointment of the Librarian be vested in the Joint Library Committee. The proposal never passed.

Nevertheless, little else was said about the method of appointing the Librarian of Congress for most of the 19th century — most likely because, while the the Library greatly expanded in size and collections, it still remained, well, a library. That began to change in 1870, when the Library took on copyright functions. Toward the end of the century, Congress began to look at creating a distinct copyright office within the Library.

At this point, it would be easy to assume that Congress simply failed to apprehend any constitutional appointment issue. Yet, as it turns out, the appointment of what would become the Register of Copyrights did provoke substantive discussion — which proves relevant because both the Register and the Copyright Royalty Judges are appointed in the same manner.

The Register of Copyrights

In an 1897 article, the American Library Association reports on some of this discussion.10 The then Librarian of Congress, Ainsworth Spofford, had recommended to Congress in 1895 “that the copyright registry should be separated from the management of the library, and a register of copyrights appointed as an executive officer, with his assistants, distinct from the library staff [emphasis added].” Despite this, a clause in an appropriations bill the following spring called for the register to be appointed by the Joint Congressional Committee on the Library. This led to an extensive discussion in Congress, which ultimately came to the conclusion that such an appointment would be unconstitutional.

The Joint Committee held hearings on the topic during the next Congressional recess. Representatives of the ALA recommended a plan that would have a registrar of copyrights and chief librarian appointed by the joint congressional committee to both serve under a director, “to be appointed in the usual manner for heads of departments, namely, by ‘The President, by and with the advice and consent of the Senate’ [emphasis added].” The appropriations committee disagreed with this proposal and countered with one where the Librarian of Congress would be appointed by the President solely and would then have the authority to appoint the register of copyrights.

The ALA concluded with two observations. First, that the Library of Congress had by then grown into an executive agency: “Congress is therefore either in the unconstitutional position of having to manage an executive branch of the government, or it must relinquish what, for a century past, has been part of its organization.” And second, maintenance of a copyright registry was clearly an executive function, which would make it “unconstitutional for Congress to appoint a register of copyrights.”

In the end, Congress was convinced that the Library of Congress “is an executive department and should be under the control of the executive branch.”11 The final law vested appointment of the Librarian of Congress in the President with the advice and consent of the Senate and appointment of the Register of Copyrights in the Librarian in order to adhere to the Constitution.12

Courts, including the Supreme Court, have implicitly endorsed the constitutional soundness of this arrangement by ruling on regulations promulgated by the Copyright Office13 — a power that only executive agencies can exercise. The Fourth Circuit addressed the issue head on (albeit in dicta) in 1978:

[T]he 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] think[s] proper.” …

The Supreme Court has properly assumed over the decades since 1909 that the Copyright Office is an executive office, operating under the direction of an Officer of the United States and as such is operating in conformity with the Appointments Clause.

The Copyright Royalty Judges

Like the appointment of the Register of Copyrights, Congress had considered constitutional implications of appointing the Copyright Royalty Judges.

The existence of the Copyright Royalty Board can be traced back to the 1976 Copyright Act.14 During its drafting, Congress knew it wanted to increase the number of compulsory licenses available, but it also wanted more flexibility over the license rates than statutes would offer. An administrative body could provide this flexibility.

An early version of the legislation creating this adminstrative body gave the Register of Copyrights the authority to appoint its members. However, at that time, the Supreme Court handed down its decision in Buckley v. Valeo, which held the appointment of members of the Federal Election Commission by Congress was unconstitutional. Some members of Congress expressed concerns that vesting appointment of a copyright royalty agency in the Register of Congress would pose the same constitutional concerns. The final version of the Act created the Copyright Royalty Tribunal placed the appointment of its members in the hands of the President.

For reasons unrelated to appointment, the Copyright Royalty Tribunal was dismantled in the early nineties. Congress sought to replace the full-time tribunal with ad hoc arbitration panels to administer statutory copyright licenses. Again, Congress took care to ensure the new body operated constitutionally:

Congressman William Hughes, the chairman of the House Subcommittee, asked the Congressional Research Service (“CRS”) for its advice. CRS stated that the panels would be constitutional if the person ultimately responsible for the panels’ decision was a presidential appointee or someone who owed his or her appointment to a presidential appointee. Therefore, the panels could be established under supervision of the Librarian of Congress, a presidential appointee, or the Register of Copyrights, a person owing his or her appointment to a presidential appointee.

Although the House Subcommittee received CRS’ opinion that either the Register or the Librarian could be the supervising official, the House Subcommittee chose to make the Librarian the supervising official. There is no record as to why this choice was made. There is also nothing in the record to suggest that Congress saw any added value in an additional layer of review. The only concern voiced was that a presidential appointee, or someone who answers to a presidential appointee, needed to be placed at the head of the CARP system to satisfy the Supreme Court’s ruling in Buckley v. Valeo.15

CARP lasted little more than half as long as its predecessor tribunal. In 2004, the Copyright Royalty and Distribution Reform Act replaced CARP with a full-time Copyright Royalty Board, with appointment by the Librarian of Congress.

Appointments Clause challenges to the CRB

The issue of the appointment of Copyright Royalty Judges made an appearance in two DC Circuit Court cases released within days of each other in July 2009, though in neither case was the issue in front of the court. In SoundExchange v. Librarian of Congress, an appeal from a CRJ determination on satellite radio royalties, Circuit Judge Kavanaugh volunteered his opinion that the appointment of the Board “raises a serious constitutional issue” in his concurrence — though SoundExchange had not raised any constitutional arguments. Judge Kavanaugh seemed inclined to agree with the view that Copyright Royalty Judges “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.”

The following Monday, the DC Circuit decided Intercollegiate Broadcast System v. Copyright Royalty Board, where an Appointments Clause argument was raised. However, the argument was raised too late, said the court, and was thus forfeited.

It was not until the following February that a court would need to look at the appointment of Copyright Royalty Judges. In Live365 v. Copyright Royalty Board, Live365 asked the DC District Court to enjoin the Copyright Royalty Board from ratemaking proceedings because the Judges were unconstitutionally appointed. The digital radio aggregator argued either that the Copyright Royalty Judges are “principal officers” under the Appointment Clause and must be appointed by the President, or that they are “inferior officers” but the Librarian of Congress is not one of the “heads of departments” who could be authorized to appoint them.

The court rejected both arguments. It determined that Copyright Royalty Judges were inferior officers rather than principal officers because of the “degree and level of supervision exercised over them by the Librarian of Congress and Register of Copyrights.” In additon, it observed that there are “several critical factors that indicate that the Library is an executive department for purposes of the Appointments Clause”, including the fact that “the Librarian is appointed by the President with the advice and consent of the Senate” and “the President, not Congress, has the power to remove the Librarian at will.”

Will IBS Be Successful?

The odds are stacked against IBS ultimately succeeding in its argument. As noted above, no court has yet to be convinced that Copyright Royalty Judges are appointed unconstitutionally.

On whether the Judges are principal or inferior officers, the government lays out a strong case for their status as inferior officers — one that, in my opinion, hews more closely to Supreme Court precedent on the subject. As the government notes in its brief:

The Judges are limited to six-year terms, during which they are subordinate to the Librarian of Congress, a principal officer of the United States appointed by the President with the advice and consent of the Senate. The Judges’ authority is limited to matters relating to the establishment of royalty rates for a small number of compulsory licenses enumerated in the Copyright Act. The Judges are expressly required to “act in accordance with regulations issued by . . . the Librarian of Congress.” Any procedural regulations issued by the Judges themselves, including rules governing royalty ratemaking proceedings, must be approved by the Librarian. The Librarian is authorized to promulgate binding ethical rules and to enforce those rules against the Judges. The Librarian also causes the Judges’ decisions to be published. The Judges lack space or administrative resources, and are wholly reliant on the Librarian for support. And if the Judges find themselves idle between ratemaking proceedings, they may be assigned other duties at the discretion of the Register of Copyrights, who likewise acts under the direction of the Librarian.

As to whether the Librarian of Congress is a head of a department under the Appointments Clause, I believe it is.

The Library of Congress is an executive, not a legislative, agency. The Librarian is appointed by the President, not Congress. The Library’s subdepartments, the Copyright Office and the Copyright Royalty Board, perform executive functions. The executive branch oversees these functions — Congress retains no oversight in the form of a legislative veto or otherwise.

It is called the Library of Congress… but so what? Setting aside the fact that this name is largely vestigial — though the Library was originally intended for use by Congress, it was also open to the President and Vice-President since it was founded, followed by other executive agencies and the Judiciary within a few decades, and eventually open to the public; for over a century there have been those who have argued that it would more appropriately be called the National Library — labels shouldn’t determine constitutional analysis.

In the same vein, the various references to the Library of Congress as a “Congressional agency” in other contexts — IBS cites Keefe v. Library of Congress as an example — carry no legal weight here. “Agency” requires some level of control, and Congress deliberately vested control of the Copyright Royalty Board in the executive branch through the Library of Congress.

I’m not convinced the argument that the Library of Congress is not a “department” within the meaning of the Appointments Clause has any traction either. As noted above, the Supreme Court appears to have backed away from its holding in Freytag that there’s some distinction between the “departments” referred to in the Appointments Clause and other self-contained, non-subordinate executive agencies. And for good reason. It’s difficult to see what constitutional purpose such a distinction would advance. Certainly not separation of power concerns — if we accept that any “department” must still at a minimum be an executive agency, and Congress vests appointment in the Head of an agency that isn’t a “department” under Freytag, it hasn’t encroached on executive power. Other reasons for structuring the Appointments Clause as it is structured, some of which Alexander Hamilton explains in the Federalist 76, also don’t suggest a need to construe “departments” so narrowly.

Footnotes

  1. See Buckley v. Valeo, 424 US 1, 131 (1976); Hanah Metchis Volokh, The Two Appointments Clauses: Statutory Qualifications for Federal Officers, 10 Journal of Constitutional Law 745, 768(2008). []
  2. See Volokh; Andrew Croner, Morrison, Edmond, and the Power of Appointments, 77 George Washington Law Review 1002, 1005 (2009). []
  3. Buckley v. Valeo, 424 US 1, 126 (1976). []
  4. See United States v. Germaine, 99 US 508, 509 (1879). []
  5. See Edmond v. United States, 520 US 651, 661 (1997): “Our cases have not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes”; Morrison v. Olson, 487 US 654, 671 (1988): “The line between ‘inferior’ and ‘principal’ officers is one that is far from clear, and the Framers provided little guidance into where it should be drawn. … We need not attempt here to decide exactly where the line falls between the two types of officers, because in our view appellant clearly falls on the ‘inferior officer’ side of that line.” []
  6. See Free Enterprise Fund v. PCAOB, 561 US ___, *V (2010). []
  7. Buckley v. Valeo, 424 US 1, 127 (1976). []
  8. Said Scalia in the concurrence, “It is as impossible to respond to this random argumentation as it is to derive a comprehensible theory of the appointments power from it.” []
  9. Free Enterprise Fund v. PCAOB, 561 US ___ (2010). []
  10. I admit that the introduction to the ALA’s article made me chuckle: “The appearance, the week before Congress opened, of seven members of the American Library Association before the joint committee on the Library of Congress in Washington has been the most interesting happening in the library world since the Cleveland conference.” []
  11. 29 Cong. Rec. 318-19 (1896) (Rep. Dockery). Also see William Patry, Copyright Law and Practice, ch. 1 fn. 166 for a comprehensive list of citations to Congressional records on the topic. []
  12. Act of February 19, 1897, 54th Cong., 2d Sess., 29 Stat. 545. []
  13. See, for example, Goldstein v. California, 412 U.S. 546, 567-69 (1973); DeSylva v. Ballentine, 351 U.S. 570, 577-78 (1956); Mazer v. Stein, 347 U.S. 201, 212 (1954). []
  14. This section relies largely on CARP (Copyright Arbitration Royalty Panel) Structure and Process, Statement of Marybeth Peters The Register of Copyrights before the Subcommittee on Courts, the Internet, and Intellectual Property Committee on the Judiciary (June 13, 2002) and Frederick Greenman & Alvin Deutsch, The Copyright Royalty Tribunal and the Statutory Mechanical Royalty: History and Prospect, 1 Cardozo Arts & Entertainment Journal 1 (1982). []
  15. Marybeth Peters, CARP. []

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3 Comments

  1. This issue arose about two years ago in the context of the USPTO’s Board of Patent Appeals and Interferences (BPAI). You may find the following by John Duffy (GWLS) of interest:

    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fwww.patentlyo.com%2Flawjournal%2Ffiles%2FDuffy.BPAI.pdf&ei=dDtnT6OZKsHL0QHr69iJCA&usg=AFQjCNF7DSAZkv2jNIB2shaGXY003I6IyQ

    • Thanks for the link. I had looked at that paper while I was researching this article. I think Duffy’s conclusion holds up even after Free Enterprise. The administrative patent judges would be considered inferior officers, and their appointment was unconstitutional because they were appointed by the PTO Director — but since the PTO is a department contained within the Department of Commerce, it wouldn’t be considered a “department” for Appointments Clause purposes.

  2. Good analysis, and informative piece.
    Thanks Terry!