Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board

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.

3

* * *

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”

7

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

8

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

11

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

12

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

13

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 “for-

cause” 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

15

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

16

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.

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.