Czars, and Removability, and Intercollegiate Broadcasting, Oh My!

On reflection, the most striking thing about the D.C. Circuit’s recent decision finding an Appointments Clause violation in the structure of the Copyright Royalty Board is how little the court had to say about the judicial remedy it imposed.  The court said it was “confident” that by granting unlimited removal power to a Senate-confirmed Department head (the Librarian of Congress) it made the Copyright Royalty Judges “inferior rather than principal officers.”  But the basis for the court’s confidence is not obvious.

Judge Williams’s opinion [pdf] says that “with unfettered removal power, the Librarian will have the direct ability to ‘direct,’ ‘supervise,’ and exert some ‘control’ over the Judges’ decisions.”  But the court does not explain how the power to remove amounts to “direct” rather than indirect supervision; indeed, the court acknowledges that “CRJ decisions will still not be directly reversible.”  The Librarian’s power to provide non-binding “input” to the Register–an intermediary whom the Judges “are free to consult” (or not)–does not seem to significantly detract from the Board’s acknowledged power to control, in Judge Kavanaugh’s words, “billions of dollars and the fates of entire industries.”  And the court admitted that the Register’s power to correct legal errors in CRJ determinations leaves the judges with “vast discretion” over royalty rates and does not amount to “direction by a principal officer.”

The D.C. Circuit’s heavy reliance on the removal power and the influence that flows from it appears to be a significant extension of the Supreme Court’s decisions in Edmond v. United States520 U.S. 651 (1997)and Free Enterprise Fund v. PCAOB130 S. Ct. 3138 (2010), which the D.C. Circuit relies on.  In each of those cases, the determination that an officer was an inferior officer rested on removability plus a strong claim to direct control by a supervising agency.  In Free Enterprise, the Supreme Court relied on the fact that the PCAOB’s rules and sanctions are “subject to [SEC] approval and alteration,” and in Edmund, the Supreme Court relied on the Judge Advocate General’s power to “prescribe uniform rules of procedure” for the Coast Guard judges, and to “formulate policies and procedure in regard to review of court-martial cases,” in addition to the reversibility of their decisions by another executive agency.  Those factors are absent in the Copyright Royalty Board.

By the logic of Intercollegiate Broadcasting, no officer who is removable at will is a principal Officer for purposes of the Appointments clause.  If that is correct, Congress can avoid the inconvenience of Senate confirmation for executive branch officers, no matter how vast their authority, simply by locating removal power in some “Head of Department” with nominal supervisory authority.

The Intercollegiate Broadcasting decision could alter the way the political branches negotiate the structure of new executive branch agencies, like the Consumer Financial Protection Bureau (CFPB), in the future.  Senate confirmation proved impossible for President Obama’s preferred Director picks, and even now questions about the legitimacy of Richard Cordray’s recess appointment to that post cast a shadow over the Bureau’s work.  If the drafters of Dodd-Frank were to start from scratch, would they have tried to avoid Senate confirmation in exchange for at-will removability (by the Secretary of Commerce, for example)?  Would Congress have consented?

Intercollegiate Broadcasting System Inc v. Copyright Royalty Board, No. 11-1083 (July 6, 2012) (Williams, S.J., joined by Garland & Griffith, JJ.).

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