Opinion ID: 788880
Heading Depth: 3
Heading Rank: 6

Heading: Failure to include litigation costs in the valuation of the RIAA-Yahoo! agreement

Text: 47 The Broadcasters next argue the Librarian acted in an arbitrary manner by refusing to adjust the weight given to the RIAA-Yahoo! agreement to account for savings in litigation costs that Yahoo! achieved by negotiating its rate before the CARP convened. 48 The Broadcasters assert that the Librarian refused to make an adjustment to account for litigation cost savings while acknowledging that it would be appropriate. They cite Yahoo! testimony from the sealed record giving an estimate of costs the company saved by avoiding the CARP proceeding, maintaining that this savings put the effective rate of the RIAA-Yahoo! agreement well below the zone of reasonableness determined by the Librarian. This misstates the Librarian's position, which is that any adjustment from such savings is so uncertain that even without the adjustment the rate was likely already within the statutory zone of reasonableness. Specifically, the Librarian found that although Webcasters had argued for a downward adjustment ... to compensate for litigation cost savings and it is reasonable to assume that the rates in the Yahoo! agreement are slightly higher because of the litigation cost savings, there is a problem in making an adjustment to the proposed rate where the record contains no information quantifying the added value of the factors that purportedly resulted in inflated rates. Final Rule, 67 Fed. Reg. at 45,255. He concluded that, because the Register is recommending a rate in the middle of the `zone of reasonableness,' it is safe to conclude that the recommended rate falls into that zone of reasonableness even taking these factors into account. Id. 49 The key question is not whether the Librarian's decision to refrain from adjusting for litigation costs was correct, but whether he based his decision not to adjust the rates on a facially plausible explanation of the record evidence. See NAB, 146 F.3d at 918. This question is a close one, because the Librarian devoted only the above-quoted sentences to the issue and did not discuss it at length. However, because of our extremely deferential review we find that the Librarian's explanation at least provides a facially plausible account of the reasons for his decision. 50