Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-11-01083/USCOURTS-caDC-11-01083-0/pdf.json

Parties Involved:
College Broadcasters, Inc.
Intervenor for Appellee
Copyright Royalty Board
Appellee
Intercollegiate Broadcasting System, Inc.
Appellant
Library of Congress
Appellee
SoundExchange, Inc.
Intervenor for Appellee

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 7, 2012 Decided July 6, 2012

No. 11-1083

INTERCOLLEGIATE BROADCASTING SYSTEM, INC.,

A RHODE ISLAND NON-PROFIT CORPORATION,

APPELLANT

v.

COPYRIGHT ROYALTY BOARD AND LIBRARY OF CONGRESS,

APPELLEES

COLLEGE BROADCASTERS, INC. AND SOUNDEXCHANGE, INC.,

INTERVENORS

On Appeal from a Final Order of the Copyright Royalty 

Board

Christopher J. Wright argued the cause for appellant. 

With him on the briefs were Timothy J. Simeone and William 

Malone. 

Kelsi Brown Corkran, Attorney, U.S. Department of 

Justice, argued the cause for appellees. With her on the brief

were Tony West, Assistant U.S. Attorney General, and Scott 

R. McIntosh, Attorney.

Michael B. DeSanctis argued the cause for intervenor 

SoundExchange, Inc. in support of appellees. With him on 

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the brief were David A. Handzo, William M. Hohengarten, 

and Garrett A. Levin. 

Catherine R. Gellis was on the brief for intervenor 

College Broadcasters, Inc. in support of appellee.

Before: GARLAND and GRIFFITH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

WILLIAMS, Senior Circuit Judge: Intercollegiate 

Broadcasting, Inc. appeals a final determination of the 

Copyright Royalty Judges (“CRJs” or “Judges”) setting the 

default royalty rates and terms applicable to internet-based 

“webcasting” of digitally recorded music. We find we need 

not address Intercollegiate’s argument that Congress’s grant 

of power to the CRJs is void because the provision for judicial 

review gives us legislative or administrative powers that may 

not be vested in an Article III court. But we agree with 

Intercollegiate that the position of the CRJs, as currently 

constituted, violates the Appointments Clause, U.S. Const., 

art. II, § 2, cl. 2. To remedy the violation, we follow the 

Supreme Court’s approach in Free Enterprise Fund v. Public 

Company Accounting Oversight Bd., 130 S. Ct. 3138 (2010), 

by invalidating and severing the restrictions on the Librarian 

of Congress’s ability to remove the CRJs. 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. Because of the 

Appointments Clause violation at the time of decision, we 

vacate and remand the determination challenged here; 

accordingly we need not reach Intercollegiate’s arguments 

regarding the merits of the rates and terms set in that 

determination.

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* * *

Intercollegiate is an association of “noncommercial” 

webcasters who transmit digitally recorded music over the 

internet in educational environments such as high school and 

college campuses—a technologically updated version of 

“closed circuit” campus radio stations. As with traditional 

radio, such digital transmissions are “performances” under the 

Copyright Act and thus entitle the owner of a song’s copyright 

to royalty payments. See 17 U.S.C. § 106(6). And since 

1998, the act has provided a “statutory license” for 

webcasting—a set of provisions that encourage voluntary 

negotiations over licensing terms but provide, if the parties 

cannot agree, for proceedings before the CRJs to establish 

reasonable terms. See id. § 114(d)(2), (f)(2)-(3); see also id. 

§ 112(e)(4) (similar licenses for “ephemeral recordings”). 

The administrative body responsible for setting these 

terms has changed in name and structure over time, but the 

Copyright Royalty Board (the regulatory name for the 

collective entity composed of the CRJs and their staff, see 37 

C.F.R. § 301.1) was established in its current form in 2004 

and is composed of three Copyright Royalty Judges who are 

appointed to staggered six-year terms by the Librarian of 

Congress. See Copyright Royalty and Distribution Reform 

Act of 2004, Pub. L. No. 108-419, 118 Stat. 2341 (codified at 

17 U.S.C. § 801 et seq.). When a ratemaking proceeding is 

initiated, the Judges are tasked with “mak[ing] determinations 

and adjustments of reasonable terms and rates of royalty 

payments,” 17 U.S.C. § 801(b)(1), where “reasonable” means 

payments that “most clearly represent the rates and terms that 

would have been negotiated in the marketplace between a 

willing buyer and a willing seller,” id. § 114(f)(2)(B); see also 

id. § 112(e)(4).

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SoundExchange, Inc. (an intervenor here) is a non-profit 

clearinghouse for musicians’ webcast royalty payments. In 

2008 it initiated ratemaking proceedings before the CRJs to 

set the default webcasting licensing rates for the years 2011-

2015. The Judges initiated proceedings and received 40 

petitions to participate, mainly from webcasters. Over the 

next two years, SoundExchange entered voluntary settlements 

with almost all of the participants, leaving only two 

webcasting participants, Intercollegiate and one other 

licensee, Live365 (a commercial webcaster). (Live365 

originally appealed the CRJs’ determination as to commercial 

webcaster rates but reached a settlement with SoundExchange 

before the filing of opening briefs.) Intervenor College 

Broadcasting, Inc., an association of educational webcasters 

similar to Intercollegiate, participated in cooperation with 

SoundExchange, providing the CRJs their settlement 

agreement as a reference for market rates. 

After reviewing the evidence and testimony from the 

remaining participants, the CRJs issued a final determination 

in which they adopted as statutory rates the royalty structure 

agreed to in the settlement between SoundExchange and 

College Broadcasting. See 76 Fed. Reg. 13,026, 13,042/1 

(Mar. 9, 2011). Those terms include a $500 flat annual fee 

per station for both “educational” and other noncommercial 

webcasters whose “Aggregate Tuning Hours” stay below a 

monthly threshold separating them from commercial 

webcasters. See id. at 13,039/1, 13,040/1. The CRJs rejected 

Intercollegiate’s proposal to establish different fee structures 

for “small” and “very small” noncommercial webcasters. See 

id. at 13,040/2-13,042/1. Intercollegiate appealed the CRJs’ 

determination pursuant to 17 U.S.C. § 803(d)(1).

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* * *

Intercollegiate first argues that all determinations made 

by the CRJs are void because the relevant appeal provision 

purports to ask Article III courts to take actions of a kind 

beyond their constitutional jurisdiction. Specifically, 17 

U.S.C. § 803(d)(1) provides for appeals of the CRJs’ 

determinations to the D.C. Circuit, and § 803(d)(3) states:

Section 706 of title 5 shall apply with respect to review 

by the court of appeals under this subsection. If the court 

modifies or vacates a determination of the Copyright 

Royalty Judges, the court may enter its own 

determination with respect to the amount or distribution 

of royalty fees and costs, and order the repayment of any 

excess fees, the payment of any underpaid fees, and the 

payment of interest pertaining respectively thereto, in 

accordance with its final judgment. The court may also 

vacate the determination of the Copyright Royalty Judges 

and remand the case to the Copyright Royalty Judges for 

further proceedings in accordance with subsection (a).

17 U.S.C. § 803(d)(3) (emphasis added). Intercollegiate

claims that this provision vests us with powers unsuitable for 

an Article III court, citing Federal Radio Commission v. 

General Electric Co., 281 U.S. 464 (1930). There the Court 

addressed a provision vesting in the courts of the District of 

Columbia a power to substitute their own “determination” for 

that of an agency; it found the power to be legislative or 

administrative rather than judicial. Because the courts of the 

District were then legislative in character, their exercise of 

such a power presented no problem, but the Court regarded its 

review of such a legislative or administrative decision as 

beyond its authority under Article III. Id. at 469. As 

Congress clearly meant to provide an avenue for appeal, yet 

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specified an invalid one, Intercollegiate argues, we must 

throw out the whole regime. 

We conclude that we need not address this objection

because it has no bearing on Intercollegiate’s case. So far as 

the substance of the CRJs’ decision is concerned, no party has 

asked us to enter our own determination, but rather to review 

the decision for compliance with 17 U.S.C. § 114(f)(2)(A). 

See Appellant’s Br. 17-18 (seeking vacation and remand for 

lack of compliance with that provision); Appellees’ Br. 43 

(seeking affirmance). That challenge is evaluated under the 

familiar APA arbitrary and capricious standard, 5 U.S.C. 

§ 706(2)(A), which is incorporated by direct reference in 

§ 803(d)(3). Intercollegiate insists that § 803(d)(3) is “facially 

unconstitutional” and therefore brings down the whole CRJ 

determination process even if the defective provision is not 

applicable in this case. Appellant’s Reply Br. 29. But as the 

government points out, Intercollegiate has made no attempt to 

satisfy the common standard for a facial constitutional 

challenge, Appellees’ Br. 16 (citing United States v. Salerno, 

481 U.S. 739, 745 (1987)), or justify the non-application of 

that standard, or explain why the allegedly offensive language 

wouldn’t be severable, see id. at 19-20. Intercollegiate offers 

nothing in reply. See Appellant’s Reply Br. 29-30. We note, 

incidentally, that power to make our “own determination” 

would appear to present no problem on an issue as to which 

the law permitted only one option. 

* * *

Intercollegiate argues that the Copyright Royalty Board 

as currently structured violates the Constitution’s 

Appointments Clause, art. II, § 2, cl. 2, on two grounds: 

(1) the Judges’ exercise of significant ratemaking authority, 

without any effective means of control by a superior (such as 

unrestricted removability), qualifies them as “principal” 

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officers who must be appointed by the President with Senate 

confirmation; and (2) even if the Judges are “inferior” 

officers, the Librarian of Congress is not a “Head of 

Department” in whom Congress may vest appointment power. 

We have discussed these issues in prior cases, but we never 

resolved them because they were not timely raised by the 

parties. See SoundExchange, Inc. v. Librarian of Congress, 

571 F.3d 1220, 1226-27 (D.C. Cir. 2009) (Kavanaugh, J., 

concurring); Intercollegiate Broadcast Sys., Inc. v. Copyright 

Royalty Bd., 574 F.3d 748, 755-56 (D.C. Cir. 2009) (per 

curiam). Now that they are properly presented, we agree with 

Intercollegiate on the first claim but not the second, and 

accordingly provide a remedy that cures the constitutional 

defect with as little disruption as possible.

The Appointments Clause provides that

[The President] . . . shall nominate, and by and with the 

Advice and Consent of the Senate, shall appoint . . . 

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.

U.S. Const., art. II, § 2, cl. 2. To qualify as an “Officer of the 

United States” within the meaning of the clause, i.e., not 

simply an “employee,” a person must “exercis[e] significant 

authority pursuant to the laws of the United States.” Buckley

v. Valeo, 424 U.S. 1, 125-26 (1976); see Freytag v. 

Commissioner, 501 U.S. 868, 880-82 (1991). Intercollegiate 

contends that the CRJs not only exercise significant authority, 

but are “principal” rather than “inferior” officers, so that 

Congress’s decision to vest their appointment in the Librarian 

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rather than the President (with Senate approval) violates the 

text of Article II. 

The government concedes that the CRJs meet this initial 

threshold of significant authority. If significance plays no role 

beyond that threshold, i.e., has no bearing on whether an 

officer is principal or inferior, then we may pass on to the 

major differentiating feature, the extent to which the officers 

are “directed and supervised” by persons “appointed by 

Presidential nomination with the advice and consent of the 

Senate.” Edmond v. United States, 520 U.S. 651, 663 (1997). 

But there is in fact some conflict over whether there are 

relevant degrees of significance in the authority of officers, so 

we first briefly examine the conflict and then consider the 

significance of the CRJs’ authority.

In Morrison v. Olson, 487 U.S. 654 (1988), the Court 

held that an independent counsel appointed by the Attorney 

General was an inferior rather than principal officer. Id. at 

671-72. The counsel was removable “only for good cause,” 

see id. at 663, but the Court also stressed that she was 

“empowered by the Act to perform only certain, limited 

duties,” with no “authority to formulate policy for the 

Government or the Executive Branch,” and that her office was 

not only “limited in jurisdiction,” but also “‘temporary’ in the 

sense that an independent counsel is appointed essentially to 

accomplish a single task, and when that task is over the office

is terminated,” see id. at 671-72. The deprecatory language 

about the independent counsel’s duties seems to rest on a 

premise that levels of significance may play some role in the 

divide between principal and inferior. 

But in Edmond the Court, once satisfied that the persons 

in question exercised significant authority and were thus 

officers, 520 U.S. at 662, went on to discuss only direction 

and supervision. And it observed that the exercise of 

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significant authority “marks, not the line between principal 

and inferior officer for Appointments Clause purposes, but 

rather, as we said in Buckley, the line between officer and 

nonofficer.” Id. 

In any event, assuming that significance of authority has 

any import beyond setting the threshold for officers, it is a 

metric on which the CRJs score high. Their ratemaking 

decisions have considerable consequences—as our colleague 

put it, “billions of dollars and the fates of entire industries can 

ride on the Copyright Royalty Board’s decisions.” 

SoundExchange, 571 F.3d at 1226 (Kavanaugh, J., 

concurring). The CRJs set the terms of exchange for musical 

works not only on traditional media such as CDs, cassettes 

and vinyl, but also on digital music downloaded through 

iTunes and Amazon.com, digital streaming via the web, rates 

paid by satellite carriers, non-commercial broadcasting, and 

certain cable transmissions. See 17 U.S.C. §§ 115(c)(3)(C)-

(D) (phonorecords), 114(f)(1) & (f)(2)(A)-(B), (subscription 

and non-subscription digital transmissions and satellite radio 

services), 112(e)(3)-(4) (ephemeral recordings), 118(b)(4) 

(non-commercial broadcasting), 111(d)(4) (secondary 

transmissions by cable systems). Even though the CRJs affect 

Intercollegiate only in regard to webcasting, Freytag calls on 

us to consider all the powers of the officials in question in 

evaluating whether their authority is “significant,” not just 

those applied to the litigant bringing the challenge. 501 U.S. 

at 882; Tucker v. Commissioner, 676 F.3d 1129, 1132 (D.C. 

Cir. 2012). 

Of course one might see these authorities of the CRJs as 

primarily addressing “merely rates.” But rates can obviously 

mean life or death for firms and even industries. 

Intercollegiate calls our attention, for example, to a firm for 

which royalty expenses constitute half its costs. See 

Appellant’s Reply Br. 6-7; see generally id. 4-11. 

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As we noted, Edmond accepts officers’ classification as 

“inferior” if their “work is directed and supervised at some 

level by others who were appointed by Presidential 

nomination with the advice and consent of the Senate.” 520 

U.S. at 663. In concluding that the judges of the Coast Guard 

Court of Criminal Appeals were inferior officers, the Court 

emphasized three factors: (1) the judges were subject to the 

substantial supervision and oversight of the Judge Advocate 

General (who in turn was subordinate to the Secretary of 

Transportation), see id. at 664; (2) the judges were removable 

by the Judge Advocate General without cause, see id. (“The 

power to remove officers, we have recognized, is a powerful 

tool for control.” (citing Bowsher v. Synar, 478 U.S. 714, 727 

(1986); Myers v. United States, 272 U.S. 52 (1926))); and 

(3) another executive branch entity, the Court of Appeals for 

the Armed Forces, had the power to reverse the judges’ 

decisions so that they had “no power to render a final decision 

on behalf of the United States unless permitted to do so by 

other Executive Officers.” Id. at 664-65. 

As to Edmond’s first concern, the CRJs are supervised in 

some respects by the Librarian and by the Register of 

Copyrights, but in ways that leave broad discretion. The 

Librarian (who is appointed by the President with advice and 

consent of the Senate, see 2 U.S.C. § 136) is entrusted with 

approving the CRJs’ procedural regulations, 17 U.S.C. 

§ 803(b)(6); with issuing ethical rules for the CRJs, id. 

§ 802(h); and with overseeing various logistical aspects of 

their duties, e.g., id. §§ 801(d)-(e) (providing administrative 

resources), 803(c)(6) (publishing CRJs’ decisions), 801(b)(8) 

(assigning CRJs additional duties). None of these seems to 

afford the Librarian room to play an influential role in the 

CRJs’ substantive decisions. 

The Register (who is appointed by the Librarian and acts 

at his direction, see id. § 701(a)) has the authority to interpret 

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the copyright laws and provide written opinions to the CRJs 

on “novel material question[s]” of law; the CRJs must abide 

by these opinions in their determinations. See id. 

§ 802(f)(1)(B). The Register also reviews and corrects any 

legal errors in the CRJs’ determinations. Id. § 802(f)(1)(D). 

Oversight by the Register at the direction of the Librarian on 

issues of law of course is not exactly direction by a principal 

officer, Edmond, 520 U.S. at 663, but it is a non-trivial limit 

on the CRJs’ discretion, and the Librarian may well be able to 

influence the nature of the Register’s interventions. 

But the Register’s power to control the CRJs’ resolution

of pure issues of law plainly leaves vast discretion over the 

rates and terms. If one looks to market conditions, as one 

statutory provision governing webcasting directs, see 17 

U.S.C. § 114(f)(2), each copyright owner and would-be user 

are in something akin to a bilateral monopoly—a situation 

where the seller has no substitute purchaser (here, because

each purchaser represents a distinct channel to end-users) and 

the buyer no exact substitute supplier (assuming each creative 

work is in some sense unique). (It is not a strict bilateral 

monopoly, as many songs, etc., may have fairly close 

substitutes.) In such a case, the range of possible market 

prices is likely to be very wide: the floor is likely to be very 

low (adding a user will commonly cost the copyright holder 

nothing) and the ceiling relatively high, especially for creative 

material that has few close substitutes. 

Moreover, the CRJs also apply ratemaking formulas that 

are even more open-ended. For example, § 801(b)(1) directs 

the CRJs to set “reasonable terms and rates of royalty 

payments” with reference to four factors: (1) to “maximize the 

availability of creative works”; (2) to provide a “fair” return to 

both the copyright owner and the copyright user; (3) to 

“reflect the relative roles” of the owner and user as to 

“creative contribution, technological contribution, capital 

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investment,” and the like; and (4) to “minimize any disruptive 

impact” on industry structure. 17 U.S.C. § 801(b)(1)(A)-(D). 

As we have previously stated, because these “factors pull in 

opposite directions,” there is a “range of reasonable royalty 

rates that would serve all these objectives adequately but to 

differing degrees.” RIAA v. Copyright Royalty Tribunal, 622 

F.3d 1, 9 (D.C. Cir. 1981). Thus the Register’s control over 

the most significant aspect of the CRJs’ determinations—the 

rates themselves—is likely to be quite faint. Even in the 

realm of rates required to be based on “cost,” the ratemaker 

typically has broad discretion. See Federal Power 

Commission v. Conway Corp., 426 U.S. 271, 278 (1976) 

(“[T]here is no single cost-recovering rate, but a zone of 

reasonableness: ‘Statutory reasonableness is an abstract 

quality represented by an area rather than a pinpoint. It allows 

a substantial spread between what is unreasonable because too 

low and what is unreasonable because too high.’” (quoting 

Montana-Dakota Utilities Co. v. Northwestern Public Service

Co., 341 U.S. 246, 251 (1951))). And while we have 

recognized that an obligation to follow another’s legal 

opinions creates a genuine supervisory limit, see Tucker, 676 

F.3d at 1134, here the law does not provide much constraint 

on the rate, and it is the rate itself—not the answer to the pure 

questions of law that the Register can address—that is of the 

greatest importance. 

We find that, given the CRJs’ nonremovability and the 

finality of their decisions (discussed below), the Librarian’s 

and Register’s supervision functions still fall short of the kind 

that would render the CRJs inferior officers.

The second Edmond factor, removability, also supports a 

finding that the CRJs are principal officers. Unlike the judges 

in Edmond, the CRJs can be removed by the Librarian only 

for misconduct or neglect of duty. See 17 U.S.C. § 802(i). 

And while the presence of a “good cause” restriction in 

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Morrison did not prevent a finding of inferior officer status, it 

clearly did not hold that such a restriction on removal was 

generally consistent with the status of inferior officer. 

Instead, as Edmond explains, Morrison relied heavily on the 

Court’s view that the independent counsel also “performed 

only limited duties, that her jurisdiction was narrow, and that 

her tenure was limited [to performance of a ‘single task’].” 

Edmond, 520 U.S. at 661. 

Finally, the CRJs’ rate determinations are not reversible 

or correctable by any other officer or entity within the 

executive branch. As we have mentioned, their procedural 

rules are reviewed by the Librarian, and their legal 

determinations by the Register. But the Judges are afforded 

full independence in making determinations concerning 

adjustments and determinations of copyright royalty rates 

and terms, the distribution of copyright royalties, the 

acceptance or rejection of royalty claims, rate adjustment 

petitions, and petitions to participate, and in issuing other 

rulings under this title, except that the Copyright Royalty 

Judges may consult with the Register of Copyrights on 

any matter other than a question of fact.

17 U.S.C. § 802(f)(1)(A)(i); see also id. § 802(f)(1)(A)(ii) 

(Register’s authority “under this clause shall not be construed 

to authorize the Register . . . to provide an interpretation of 

questions of procedure . . . [or] the ultimate adjustments and 

determinations of copyright royalty rates and terms”). Thus, 

unlike the judges in Edmond, 520 U.S. at 664-65, the CRJs 

issue decisions that are final for the executive branch, subject 

to reversal or change only when challenged in an Article III 

court. 

Having considered all of these factors, we are in 

agreement with the view suggested by Judge Kavanaugh in 

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SoundExchange that the CRJs as currently constituted are 

principal officers who must be appointed by the President and 

confirmed by the Senate, and that the structure of the Board 

therefore violates the Appointments Clause. 571 F.3d at 

1226-27 (concurring opinion). We therefore must decide the 

appropriate remedy to correct the violation.

In Free Enterprise Fund, the Supreme Court reviewed the 

structure of the Public Company Accounting Oversight Board, 

whose members were appointed and removable by the 

Commissioners of the Securities and Exchange Commission. 

The Court held that in the circumstances of that case the “forcause” restriction on the Commissioners’ removal power

violated the Constitution’s separation of powers by impeding 

the President’s ability to execute the laws. See 130 S. Ct. at 

3151-54. Rather than finding all authority exercised by the 

PCAOB to be unconstitutional, however, the Court held that 

invalidating and severing the problematic for-cause restriction

was the solution best matching the problem and preserving the 

remainder intact. Id. at 3161 (citing Ayotte v. Planned 

Parenthood of Northern New England, 546 U.S. 320, 328 

(2006)). 

We likewise conclude here that invalidating and severing 

the restrictions on the Librarian’s ability to remove the CRJs 

eliminates the Appointments Clause violation and minimizes 

any collateral damage. Specifically, we find unconstitutional 

all of the language in 17 U.S.C. § 802(i) following “The 

Librarian of Congress may sanction or remove a Copyright 

Royalty Judge . . . .” Without this restriction, we are 

confident that (so long as the Librarian is a Head of 

Department, which we address below) the CRJs will be

inferior rather than principal officers. With unfettered 

removal power, the Librarian will have the direct ability to 

“direct,” “supervise,” and exert some “control” over the 

Judges’ decisions. Edmond, 520 U.S. at 662-64. Although 

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individual CRJ decisions will still not be directly reversible, 

the Librarian would be free to provide substantive input on 

non-factual issues via the Register, whom the Judges are free

to consult, 17 U.S.C. § 802(f)(1)(A)(i). This, coupled with the 

threat of removal satisfies us that the CRJs’ decisions will be 

constrained to a significant degree by a principal officer (the 

Librarian). We further conclude that free removability 

constrains their power enough to outweigh the extent to which 

the scope of their duties exceeds that of the special counsel in 

Morrison. Cf. Free Enterprise Fund, 130 S. Ct. at 3162 

(“Given that the [SEC] is properly viewed, under the 

Constitution, as possessing the power to remove Board 

members at will, and given the Commission’s other oversight 

authority, we have no hesitation in concluding that under 

Edmond the [PCAOB] members are inferior officers . . . .”).

In sum, the inability of the Librarian to remove the CRJs, 

coupled with the absence of a principal officer’s direction and 

supervision over their exercise of authority, renders them 

principal officers—but obviously ones not appointed in the 

manner constitutionally required for such officers. Once the

limitations on the Librarian’s removal authority are nullified, 

they would become validly appointed inferior officers—at 

least if the Librarian is a Head of Department, the issue to 

which we now turn. 

* * *

Intercollegiate argues that even if the CRJs are inferior 

officers, the Board’s structure is unconstitutional because the 

Librarian is not a “Head of Department” within the meaning 

of the Appointments Clause. The Supreme Court addressed 

the same challenge as to the SEC Commissioners in Free 

Enterprise Fund; it ultimately held: “Because the 

Commission is a freestanding component of the Executive 

Branch, not subordinate to or contained within any other such 

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component, it constitutes a ‘Departmen[t]’ for the purposes of 

the Appointments Clause.” 130 S. Ct. at 3163. See also 

Freytag, 501 U.S. at 915-22 (Scalia, J., concurring in part and 

concurring in judgment); Buckley, 424 U.S. at 127 

(“Departments” referred to in the Appointments Clause “are 

themselves in the Executive Branch or at least have some 

connection with that branch”). Intercollegiate notes that we 

have referred to the Library of Congress as a “congressional 

agency,” see Keeffe v. Library of Congress, 777 F.2d 1573, 

1574 (D.C. Cir. 1985), and argues that it is not an executive

department that can satisfy the “Head of Department” 

definition in Free Enterprise Fund. 

Despite our language in Keeffe, the Library of Congress is 

a freestanding entity that clearly meets the definition of 

“Department.” Free Enterprise Fund, 130 S. Ct. at 3162-63. 

To be sure, it performs a range of different functions, 

including some, such as the Congressional Research Service,

that are exercised primarily for legislative purposes. But as 

we have mentioned, the Librarian is appointed by the 

President with advice and consent of the Senate, 2 U.S.C. 

§ 136, and is subject to unrestricted removal by the President, 

Ex parte Hennen, 38 U.S. (13 Pet.) 230, 259 (1839); Kalaris 

v. Donovan, 697 F.2d 376, 389 (D.C. Cir. 1983). Further, the 

powers in the Library and the Board to promulgate copyright 

regulations, to apply the statute to affected parties, and to set 

rates and terms case by case are ones generally associated in 

modern times with executive agencies rather than legislators. 

In this role the Library is undoubtedly a “component of the 

Executive Branch.” Free Enterprise Fund, 130 S. Ct. at 3163. 

It was on this basis that the Fourth Circuit rejected a similar 

charge that the Librarian was not a “Head of Department” for 

purposes of appointing the Register. Eltra Corp. v. Ringer, 

579 F.2d 294, 300-301 (4th Cir. 1978). We too hold that the 

Librarian is a Head of Department who may permissibly 

appoint the Copyright Royalty Judges.

USCA Case #11-1083 Document #1382307 Filed: 07/06/2012 Page 16 of 17
17

* * *

We hold that without the unrestricted ability to remove 

the Copyright Royalty Judges, Congress’s vesting of their 

appointment in the Librarian rather than in the President 

violates the Appointments Clause. Accordingly we invalidate 

and sever the portion of the statute limiting the Librarian’s 

ability to remove the Judges. Because the Board’s structure 

was unconstitutional at the time it issued its determination, we 

vacate and remand the determination and do not address 

Intercollegiate’s arguments regarding the merits of the rates 

set therein.

So ordered.

USCA Case #11-1083 Document #1382307 Filed: 07/06/2012 Page 17 of 17