Opinion ID: 788880
Heading Depth: 3
Heading Rank: 1

Heading: Failure to consider the RIAA's proposed alternate benchmarks

Text: 22 The Owners argue that the Librarian acted arbitrarily by rejecting the 115 label agreements without sufficient explanation. In their view, these agreements provide corroboration for RIAA's benchmark analysis from rates reached in the actual marketplace, unconstrained by the statutory license. Owners' Br. at 23. Accordingly, the Owners maintain that, by failing to consider the label agreements, the Librarian arbitrarily neglected a tremendous amount of economic and competitive information that would have permitted him to make a far more informed decision on rates for use of copyrighted sound recordings. Id. This claim is without merit. 23 The CARP rejected these label agreements as useful benchmarks for two reasons. It first explained that, unlike the 26 RIAA benchmark agreements, all of which addressed the precise rights at issue here, the label agreements involved rights not subject to a statutory license. CARP Report at 71. The CARP additionally explained that, were it inclined to rely on these agreements, the effect would likely be to undermine, not corroborate, RIAA's proposals in that many of the agreements reflect rates below those which RIAA is proposing. Id. The Librarian accepted these rationales, see Final Rule at 45,248 n. 20, and in so doing was not obligated to fully recapitulat[e] the CARP's analysis. NAB, 146 F.3d at 926; see 17 U.S.C. § 802(f). The Owners nevertheless maintain that the Librarian should have looked harder at — and ultimately relied on — these label agreements. 24 Their challenge cannot succeed under the deferential standard of review applicable here. NAB, 146 F.3d at 924. The Owners purport to attack the sufficiency of the Librarian's explanation for eschewing reliance on the label agreements. But at the bottom, their challenge seeks to undermine the substance of the CARP's and Librarian's determinations regarding the weight to ascribe to these agreements. As the NAB court explained, it is emphatically not [the court's] role to independently weigh the evidence.... 146 F.3d at 930. Even to the extent that the Owners argue that the Librarian set rates in an arbitrary manner by failing to place some greater emphasis on the label agreements, their contentions are unpersuasive. 25 Under the applicable exceptionally deferential standard of review, we conclude that there is nothing compelling in the label agreements, or in the CARP's and Librarian's treatment of them, that would allow the court to hold that the Librarian set the rates in an arbitrary manner. See NAB, 146 F.3d at 931. The Librarian's decision to eschew reliance on the label agreements in favor of the RIAA-Yahoo! agreement seems perfectly sensible because the label agreements, unlike the RIAA-Yahoo! agreement, indisputably cover rights not subject to the statutory licenses involved in this proceeding. Furthermore, as the Librarian explained, the RIAA-Yahoo! agreement was particularly reliable and probative not only because it was an actual marketplace agreement[ ] pertaining to the same rights for comparable services, but also because it involved a successful and sophisticated market participant with resources and bargaining power comparable to RIAA's own. Final Rule, 67 Fed. Reg. at 45,247-48. 26 At oral argument, the Owners asserted that the Librarian inaccurately described the content of the label agreements in a footnote, and, therefore, his estimation of the value of these agreements was necessarily arbitrary and cannot have been based on an in-depth analysis of the agreements. Final Rule, 67 Fed. Reg. at 45,248 n. 20. The details of the Librarian's description are in the sealed record and redacted from the Federal Register to protect trade secrets, but are ultimately not significant in our determination. The description of the agreements was at worst harmless error, if error at all, as the agreements were never tendered for anything more than corroborative evidence of evidence upon which the Librarian chose not to place great reliance. Even if described properly, the agreements could have been no more than that — essentially a shadow of a shadow. 27