United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 29, 1998 Decided June 26, 1998
No. 96-1449
National Association of Broadcasters,
Petitioner
v.
Librarian of Congress and
Register of Copyrights,
Respondents
Canadian
Claimants, et al.,
Intervenors
No. 96-1450
Program Supplies,
Petitioner
v.
Librarian of Congress and
Register of Copyrights,
Respondents
National Association of Broadcasters,
Intervenor
No. 96-1451
Devotional
Claimants,
Petitioner
v.
Librarian of Congress and
Register of Copyrights,
Respondents
On Petitions for Review of an Order of the
United States Department of Justice
Dennis Lane argued the cause for petitioner Program
Suppliers.
John I. Stewart, Jr. argued the cause for petitioner Nation-
al Association of Broadcasters. Jacqueline E. Davis, Jessica
R. Herrera and Henry L. Baumann were on brief.
Barry H. Gottfried argued the cause for petitioner Devo-
tional Claimants. Clifford M. Harrington, John H. Midlen,
Jr., George R. Grange, II, Richard M. Campanelli and W.
Thad Adams, III, were on brief.
Bruce G. Forrest, Attorney, United States Department of
Justice, argued the cause for the respondents. Frank W.
Hunger, Assistant Attorney General, and William G. Kanter,
Attorney, United States Department of Justice, were on the
brief.
Timothy C. Hester argued the cause for intervenors Cana-
dian Claimants, et al. Michele J. Woods, L. Kendall Satter-
field and Victor J. Cosentino were on brief.
Ronald A. Schechter argued the cause for amicus curiae
Joint Sports Claimants. Robert Alan Garrett, Philip R.
Hochberg and Judith Jurin Semo were on brief.
Before: Ginsburg, Henderson and Randolph, Circuit
Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge: A cable televi-
sion system must pay royalty fees to the Register of Copy-
rights (Register) in exchange for the privilege of retransmit-
ting to its subscribers certain copyrighted programming. See
17 U.S.C. s 111(d). The Librarian of Congress (Librarian)
then distributes the collected royalties to the copyright own-
ers. Id. s 111(d)(4). In Phase I of the distribution process,
royalties are apportioned among eight classes of claimants.
See Distribution of 1990, 1991 and 1992 Cable Royalties, 61
Fed. Reg. 55,653, 55,655 (1996) (hereinafter Librarian Deci-
sion). In Phase II awards are made to individual copyright
owners within each of the classes. Id. If at either stage a
controversy arises regarding the appropriate disposition of all
or a portion of the royalties, the Librarian convenes a Copy-
right Arbitration Royalty Panel to propose a settlement. See
17 U.S.C. s 111(d)(4)(B); Majority Report of the Copyright
Arbitration Royalty Panel (5/31/96) (hereinafter Panel Re-
port). The panel's proposal is then forwarded to the Librari-
an, who, on the recommendation of the Register, adopts it or
rejects it (in whole or in part) and distributes the disputed
royalties accordingly. 17 U.S.C. s 802(f).
Each of the petitioners here is a disappointed class claim-
ant challenging the Librarian's Phase I distribution of royal-
ties collected for the years 1990, 1991 and 1992. Because our
review of the Librarian's decision is limited, and because on
our limited review none of the petitioners has established a
basis to alter or modify its royalty award, we reject their
challenges and affirm the Librarian.
I. BACKGROUND
In 1974 the Supreme Court ruled that a cable television
system's retransmission of non-network copyrighted pro-
graming to markets distant from those to which it was
originally broadcast was not a "performance" under the Copy-
right Act of 1909, 17 U.S.C. ss 1 et seq., (hereinafter 1909
Act) and therefore an action for copyright infringement did
not lie against the cable system. See Teleprompter Corp. v.
CBS, 415 U.S. 394 (1974); cf. Fortnightly Corp. v. United
Artists Television, Inc., 392 U.S. 390 (1968) (retransmission of
non-network copyrighted programming to local markets did
not give rise to infringement liability under 1909 Act). While
it recognized the adverse effect the retransmissions could
have on copyright owners, the Supreme Court concluded that
"[d]etailed regulation of these relationships [between cable
operators and copyright owners], and any ultimate resolution
of the many sensitive and important problems in this field,
must be left to Congress." Teleprompter, 415 U.S. at 414;
accord Fortnightly, 390 U.S. at 401 ("We have been invited
... to render a compromise decision in this case that would,
it is said, accommodate the various competing considerations
of copyright, communications, and antitrust policy. We de-
cline the invitation. That job is for Congress.").
A. The Evolving Statutory Framework
In response to the Fortnightly and Teleprompter decisions,
and having struggled with the matter since 1965, the Ninety-
Fourth Congress enacted legislation to address the retrans-
mission royalty problem. See The Copyright Act of 1976,
Pub. L. No. 94-553 (codified as amended at 17 U.S.C. ss 101
et seq.) (hereinafter 1976 Act); see also H.R. Rep. No.
94-1476, at 89 (1976) ("The difficult problem of determining
the copyright liability of cable television systems has been
before the Congress since 1965.") (hereinafter 1976 House
Report). The 1976 Act permitted recovery of royalties for
non-network programming retransmitted to distant markets
but not for other types of retransmitted programming:
The Committee determined ... that there was no evi-
dence that the retransmission of "local" broadcast signals
[to the same markets served by the local broadcasters]
threatens the existing market for copyright program
owners. Similarly, the retransmission of network pro-
gramming, including network programming which is
broadcast in "distant" markets, does not injure the copy-
right owner. The copyright owner contracts with the
network on the basis of his programming reaching all
markets served by the network and is compensated
accordingly.
By contrast, their [sic] transmission of distant non-
network programming by cable systems causes damage
to the copyright owner by distributing the program in an
area beyond which it has been licensed. Such retrans-
mission adversely affects the ability of the copyright
owner to exploit the work in the distant market. It is
also of direct benefit to the cable system by enhancing its
ability to attract subscribers and increase revenues. For
these reasons, the Committee has concluded that the
copyright liability of cable television systems under the
compulsory license should be limited to the retransmis-
sion of distant non-network programming.
1976 House Report at 90; accord National Ass'n of Broad-
casters v. Copyright Royalty Tribunal, 675 F.2d 367, 373
(D.C. Cir. 1982) ("The Act therefore was not intended to
compensate network broadcasts or even local broadcasters
whose programs are retransmitted locally by a cable system
in the same area.") (hereinafter NAB I); Christian Broad-
casting Network, Inc. v. Copyright Royalty Tribunal, 720
F.2d 1295, 1303 (D.C. Cir. 1983) (similar) (hereinafter CBN).
Because the Congress believed "that it would be impracti-
cal and unduly burdensome to require every cable system to
negotiate with every copyright owner whose work was trans-
mitted by a cable system," 1976 House Report at 89, it
established a centralized process for the collection and pay-
ment of royalties. See National Broadcasting Co. v. Copy-
right Royalty Tribunal, 848 F.2d 1289, 1291 (D.C. Cir. 1988)
("The purpose of this regulatory structure is to facilitate the
exploitation of copyrighted materials by removing the prohibi-
tive transaction costs that would attend direct negotiations
between cable operators and copyright holders, while at the
same time assuring copyright holders compensation for the
use of their property.") (hereinafter NBC). To administer
the process, the Congress established the Copyright Royalty
Tribunal (Tribunal) and authorized it to periodically adjust
royalty rates and distribute collected royalties. See 17 U.S.C.
ss 111(d), 801-810 (1976).
Under the 1976 Act, if claimants could not agree on the
proper distribution of collected royalties, the Tribunal de-
clared a controversy as to the portion of royalties in dispute
and conducted hearings to determine the appropriate appor-
tionment of the funds. Id. s 804(d)-(e). The Tribunal had
one year to complete its proceedings, id. s 804(e), and in its
final determination it was to "state in detail the criteria that
the Tribunal determined to be applicable to the particular
proceeding, the various facts that it found relevant to its
determination in that proceeding, and the specific reasons for
its determination," id. s 803(b).
The Congress did not, however, prescribe the criteria or
procedures according to which the Tribunal should assess a
claim for royalties:
The Committee recognizes that the bill does not in-
clude specific provisions to guide the Copyright Royalty
[Tribunal] in determining the appropriate division among
competing copyright owners of the royalty fees collected
from cable systems under Section 111. The Committee
concluded that it would not be appropriate to specify
particular, limiting standards for distribution. Rather,
the Committee believes that the Copyright Royalty [Tri-
bunal] should consider all pertinent data and consider-
ations presented by the claimants.
1976 House Report at 97. Accordingly, the Tribunal devel-
oped three primary criteria--"[1] the harm caused to copy-
right owners by secondary transmissions of copyrighted
works by cable systems, [2] the benefit derived by cable
systems from the secondary transmissions of certain copy-
righted works, and [3] the marketplace value of the works
transmitted," NAB I, 675 F.2d at 373--and two secondary
criteria--"[4][the] quality of copyrighted program material,
and [5] time-related considerations," id.--to assess each par-
ty's claims.
The 1976 Act also provided for judicial review of the
Tribunal's distribution decisions:
Any final decision of the Tribunal in a proceeding
under section 801(b) may be appealed to the United
States Court of Appeals, within thirty days after its
publication in the Federal Register, by an aggrieved
party. The judicial review of the decision shall be had, in
accordance with chapter 7 of title 5, on the basis of the
record before the Tribunal. No court shall have jurisdic-
tion to review a final decision of the Tribunal except as
provided in this section.
17 U.S.C. s 810 (1976). Pursuant to this provision, this Court
was called on to review the Tribunal's distribution of retrans-
mission royalties for four of the first five years they were
collected. See NAB I, 675 F.2d at 377-85 (challenges to
Tribunal's distribution of 1978 royalties); CBN, 720 F.2d at
1305-19 (challenges to Tribunal's distribution of 1979 royal-
ties); National Ass'n of Broadcasters v. Copyright Royalty
Tribunal, 772 F.2d 922 (D.C. Cir. 1985) (challenges to Tribu-
nal's distribution of 1979, 1980 and 1982 royalties) (hereinaf-
ter NAB II).
As time passed, however, there was insufficient work to
justify the existence of a permanent body and therefore, some
seventeen years after its creation, the Congress abolished the
Tribunal and transferred most of its functions to an ad hoc
Copyright Arbitration Royalty Panel. See The Copyright
Royalty Tribunal Reform Act of 1993, Pub. L. No. 103-198
(codified in relevant part, as amended, at 17 U.S.C. ss 801-
803) (hereinafter 1993 Act). In so doing, the House Commit-
tee responsible for the legislation reasoned that
ad hoc arbitration panels are better suited to handle the
functions currently handled by the Tribunal. The expe-
rience with arbitration under the Section 119 satellite
compulsory license was positive, and indicates that this
approach can work for the other royalty schemes in title
17. Testimony of witnesses before both Houses on the
proposal supports this conclusion.
H.R. Rep. No. 103-286, at 11 (1993) (hereinafter 1993 House
Report).
The 1993 Act also transferred certain of the Tribunal's
functions to the Librarian of Congress and the Register of
Copyrights:
The Register of Copyrights and the Librarian of
Congress will play important roles in convening and re-
viewing the decisions of the arbitration panels. The
Copyright Office is currently the "front end" of the
compulsory license system. Statements of Account [of
royalties owed] for the section 111, 119, and 1005 licens-
es are filed with the Office. The royalties paid in un-
der these licenses are then deposited by the Copyright
Office into the United States Treasury. ... The Copy-
right Office also has authority to promulgate regula-
tions for the administration of these functions. Section
806 of the Copyright Act requires the Library of Con-
gress to provide the Copyright Royalty Tribunal with
necessary administrative services, including those relat-
ed to budgeting, accounting, financial reporting, travel,
personnel, and procurement.
In short, the Copyright Office and the Library of
Congress already have considerable involvement in the
administration of compulsory licenses and in the work of
the Tribunal. When combined with the Copyright Of-
fice's almost 100 year experience in copyright issues,
assigning some of the duties formally carried out by the
Tribunal to the Office and the Library makes good sense.
Id. (footnote omitted).
Accordingly, under the new distribution scheme established
by the 1993 Act, an arbitration panel is now entrusted with
initial responsibility for formulating a proposed distribution of
disputed royalties. See 17 U.S.C. ss 801-802. The arbitra-
tion panel has 180 days to hear evidence and develop the
proposed settlement of outstanding claims. Id. s 802(e). It
must "act on the basis of a fully documented written record,
prior decisions of the Copyright Royalty Tribunal, prior copy-
right arbitration panel determinations, and rulings by the
Librarian of Congress under section 801(c)." Id. s 802(c).
Within the same 180-day period the panel must include its
proposed settlement in a report, setting "forth the facts that
the arbitration panel found relevant to its determination," and
it must forward the report and accompanying written record
to the Librarian:
Within 60 days after receiving the report of a copy-
right arbitration royalty panel under subsection (e), the
Librarian of Congress, upon the recommendation of the
Register of Copyrights, shall adopt or reject the determi-
nation of the arbitration panel. The Librarian shall
adopt the determination of the arbitration panel unless
the Librarian finds that the determination is arbitrary or
contrary to the applicable provisions of this title. If the
Librarian rejects the determination of the arbitration
panel, the Librarian shall, before the end of that 60-day
period, and after full examination of the record created in
the arbitration proceeding, issue an order setting the
royalty fee or distribution of fees, as the case may be.
The Librarian shall cause to be published in the Federal
Register the determination of the arbitration panel and
the decision of the Librarian (including an order issued
under the preceding sentence). The Librarian shall also
publicize such determination and decision in such other
manner as the Librarian considers appropriate. The
Librarian shall also make the report of the arbitration
panel and the accompanying record available for public
inspection and copying.
Id. s 802(f).
The Librarian's decision can then be reviewed by this
Court:
Any decision of the Librarian of Congress under sub-
section (f) with respect to a determination of an arbitra-
tion panel may be appealed, by any aggrieved party who
would be bound by the determination, to the United
States Court of Appeals for the District of Columbia
Circuit, within 30 days after the publication of the deci-
sion in the Federal Register. If no appeal is brought
within such 30-day period, the decision of the Librarian
is final, and the royalty fee or determination with respect
to the distribution of fees, as the case may be, shall take
effect as set forth in the decision. ... The court shall
have jurisdiction to modify or vacate a decision of the
Librarian only if it finds, on the basis of the record
before the Librarian, that the Librarian acted in an
arbitrary manner. If the court modifies the decision of
the Librarian, the court shall have jurisdiction to enter
its own determination with respect to the amount or
distribution of royalty fees and costs, to order the repay-
ment of any excess fees, and to order the payment of any
underpaid fees, and the interest pertaining respectively
thereto, in accordance with its final judgment. The court
may further vacate the decision of the arbitration panel
and remand the case to the Librarian for arbitration
proceedings in accordance with subsection (c).
Id. s 802(g).
B. The Petitioners' Challenges
The petitioners are the first to challenge a decision of the
Librarian under the new royalty distribution process estab-
lished by the 1993 Act. Each represents a distinct class of
claimants: Program Suppliers (Programmer) represents the
copyright owners of syndicated television series, movies and
television specials; 1 National Association of Broadcasters
(NAB) represents the copyright owners of programs, like
news and local interest material, that are produced and
broadcast by only a single television station; 2 and Devotional
Claimants (Devotional) represents the copyright owners of
"[s]yndicated programs of a primarily religious theme, not
limited to those produced by or for religious institutions,"
Panel Report at 13, that do not fall within another category of
programming.3
__________
1 Syndicated series and specials consist of the following:
(1) programs licensed to and broadcast by at least one U.S.
commercial television station during the calendar year in ques-
tion; (2) programs produced by or for broadcast by two or
more U.S. television stations during the calendar year in
question; and (3) programs produced by or for a U.S. commer-
cial television station that are comprised predominantly of
syndicated elements, such as music video shows, cartoon shows,
"PM Magazine," and locally hosted movie shows. Syndication
refers to selling programming on a market-by-market basis to
broadcast television stations in the United States. "Off-
network" syndication refers to programming syndicated after
having first appeared on a network. "Cheers" and "Roseanne"
are examples. "First run" syndication refers to programs first
appearing in syndication, such as talk and game shows.
Panel Report at 11-12.
2 The Panel Report describes NAB's programming as follows:
"[p]rograms produced by or for a U.S. commercial television station
and broadcast only by that one station during the calendar year in
question and not coming within the exception described in subpart
(3) of the 'Program Suppliers' definition." Panel Report at 12-13
(referring to subpart (3) quoted supra at note 1).
3 The Librarian also awarded a share of the royalties to five other
classes of copyright owners--i.e., Joint Sports Claimants (JSC),
Music Claimants (MC), National Public Radio (NPR), Public Broad-
casters (PBS) and Canadian Claimants (CC). PBS and CC have
intervened in this litigation, filing a joint brief in support of the
At issue is more than $500 million in royalties--the total
amount collected for non-network programming retransmit-
ted to distant markets in calendar years 1990, 1991 and 1992.4
The disputed royalties consist of "Basic Funds," "3.75%
Funds" and "Syndex Funds," which in turn are subdivided
into 1990 collections and 1991-1992 collections. The Basic
Funds include all of the royalties collected from small- and
medium-sized cable systems as well as the royalties collected
from large cable systems for retransmissions that were per-
mitted under the now defunct, distant signal carriage rules of
the Federal Communication Commission (FCC). See Librari-
an Decision, 61 Fed. Reg. at 55,654. The 3.75% Funds and
Syndex Funds consist of royalties collected exclusively from
large cable systems for retransmissions that are now permit-
ted as a result of the FCC's repeal of its distant signal
carriage and syndication exclusivity rules, respectively.5 Id.
The Librarian declared a Phase I distribution controversy
and convened a copyright arbitration royalty panel (Panel) on
December 4, 1995. Id. at 55,655. The Panel conducted
approximately 50 days of evidentiary hearings during which it
heard the testimony of more than 50 witnesses and it re-
viewed over 200 exhibits and hundreds of pages of written
testimony submitted by the class claimants. See Panel Re-
__________
Librarian's distribution decision. Each of the petitioners has also
joined in the portions of the intervenors' brief that are not adverse
to its claims. JSC has filed an amicus curiae brief, supporting the
Librarian's decision and opposing certain of the arguments ad-
vanced by the petitioners.
4 The Tribunal, it appears, was in the midst of a distribution
proceeding to determine the proper Phase I apportionment of 1990
royalties just before the Congress enacted the 1993 Act. See
Librarian Decision at 55,655. When it became clear that the
Tribunal would be abolished by the 1993 Act, the 1990 proceedings
were suspended and, at the urging of the parties, the Librarian
convened a panel to develop a proposed settlement for not only the
1990 royalties but also the 1991 and 1992 funds. Id.
5 The 3.75% Fund is named for the formula by which the royalties
are calculated--i.e., 3.75% of gross receipts. See Librarian Deci-
sion, 61 Fed. Reg. at 55,654.
port at 25. The record was closed on March 29, 1996, after
which the claimants submitted over one thousand pages of
post-hearing briefs. Id. at 17. The three-member Panel,
with one dissent, reported its proposed distribution to the
Librarian on May 31, 1996. See Letter from Panel Chair to
Librarian of 5/31/96. In its report, the Panel proposed the
following Phase I apportionment for the non-settling class
claimants:
Table 1: Panel's Proposed Phase I
Apportionment of Royalties
_____________________________________________________________________________
ClaimantsBasic FundBasic Fund3.75 FundSyndex Fund
(1990) (1991-1992)(1990-1992)(1990-1992)
______________________________________________________________________________
Programmer55.55%55.00%58.60%100.00%
_______________________________________________________________________________
NAB 7.58% 7.50% 7.50%None
_______________________________________________________________________________
Devotional 1.26% 1.25% 0.95%None
_______________________________________________________________________________
PBS 5.81% 5.75%NoneNone
_______________________________________________________________________________
JSC29.80%29.50%32.60%None
_______________________________________________________________________________
CCNone 1.00% 0.35%None
_______________________________________________________________________________
Source: Panel Report at 143.
The proposed awards differed significantly from those the
Tribunal had last approved before its abolition:
Table 2: Tribunal's Phase I Apportionment
of 1989 Royalty Funds
_________________________________________________________________________
ClaimantsBasic Fund3.75 FundSyndex Fund
(1989) (1989) (1989)
__________________________________________________________________________
Programmer 60.00% 62.60% 95.50%
__________________________________________________________________________
NAB 5.70% 5.70% None
__________________________________________________________________________
Devotional 1.25% 0.95% None
__________________________________________________________________________
PBS 4.00% None None
__________________________________________________________________________
MC 4.50% 4.50% 4.50%
__________________________________________________________________________
JSC 23.80% 26.00% None
__________________________________________________________________________
CC 0.75% 0.25% None
__________________________________________________________________________
Source: Certified Questions from the Register of Copyrigh Copyrights to
the Copyright Arbitration Royalty Panel of 7/16/96, at 2 (hereinafter
Certified Questions to Panel).
After reviewing the Panel's findings, the Register notified
the class representatives of a meeting to discuss certain
perceived shortcomings in the Panel's report:
We have reviewed the Panel's report, the petitions to
modify and the replies filed by the parties to this pro-
ceeding. It is evident that the report cannot be adopted
by the Librarian in its present form, and would not be
sustainable on appeal. Despite the report's length, there
is a significant absence of findings of fact and conclusions
of law supporting the Panel's specific determinations.
The report consequently lacks adequate explanation jus-
tifying the Panel's awards. Without such explanation,
the Librarian cannot evaluate the Panel's reasoning to
determine if it acted in an arbitrary manner.
We have also examined the record in this proceeding
and have determined that the Librarian cannot engage in
a de novo review of the merits of this case. First, as the
Canadian Claimants aptly point out in their reply, de
novo review cannot be completed in the 60-day time
period. Second, and more importantly, the record is not
complete with respect to some issues. Without further
development, there is no evidence upon which the Librar-
ian can reach a conclusion, preventing him from making
his own determination as to the royalty distribution.
The Copyright Act is silent as to the Librarian's
authority to remand the [Panel] report for further devel-
opment and explanation. We have determined, however,
that a remand is the appropriate solution in this proceed-
ing and will most likely produce an ultimate determina-
tion that will withstand judicial review.
Letter from Register of Copyrights to Phase I Cable Parties
of 7/3/96.
At the meeting, the claimants generally expressed their
reservations about the legality and wisdom of a remand to the
Panel. See Meeting of 7/11/96 Tr. 6-58. The Register none-
theless determined that the best way to proceed was to
submit a series of "certified questions" to the Panel so that it
could elaborate on its reasons for specific percentage awards.
See Certified Questions to Panel at 1 ("The questions are
intended to probe the original intent of the Panel only. They
are not intended to reopen any issues or invite any reconsid-
eration."). The Panel responded to the questions on August
29, 1996, emphasizing that royalty shares could not be deter-
mined with mathematical precision and were inescapably
dependent on the Panel's exercise of its informed judgment
as to the relative merits of each class's claims:
The point is, after reviewing and weighing the surveys
and all other relevant information, it is the Panel's
function to make a final judgment as to the award of each
party. There was a considerable difference of opinion in
weighing all the evidence as is partly evident by the fact
that the Panel was not unanimous in its judgment. To
reach the judgment as it exists there had to be, and
there was, a significant compromise. The above com-
ments emanate from discussions with the Copyright Of-
fice and the tenor of certain questions which suggests
that there is a precision [sic] or mathematical way to
calculate these awards by placing weights on all the
categories. The Panel can somewhat confine the awards
by making observations on the surveys and observations
on the other evidence presented. However, in its final
aspect the Panel has to use its judgment.
... A great deal of pressure was placed on the Panel
members, not only to analyze and consider [the evi-
dence], but also to debate and agree on a judgment--one
that by its very nature required a relatively precise
quantification of the final results. Clearly, the most
important element of the decision was the "judgment" of
the Panel. The Panel assimilated this information and
feels comfortable that it understood the evidence and
arguments as presented. In writing the report itself, the
Panel simply ran out of time. In the experience of at
least one member of the Panel, the report, when issued,
was about midway from where it would be if it were an
opinion published in an appellate report. It needed
considerable editing and tightening. The Panel wishes
to emphasize, however, that it abides by its essential
judgments in this proceeding.
Copyright Arbitration Royalty Panel Responses of 8/29/96 to
Certified Questions from the Register of Copyrights, at 2-3
(hereinafter Panel Responses to Certified Questions).
After reviewing the Panel's substantive responses to each
of the certified questions, the Register recommended adop-
tion of the Panel's findings with adjustments to account for
(1) the Music Claimants' and National Public Radio's settle-
ment of their claims to the Basic and Syndex Funds and (2)
the Panel's other errors, admitted and otherwise, in appor-
tioning the 3.75 Funds. See Librarian Decision, 61 Fed. Reg.
at 55,660-64. The Librarian adopted the Register's recom-
mendation without modification: "Having duly considered the
recommendation of the Register of Copyrights regarding the
report of the Copyright Arbitration Royalty Panel in the
distribution of the 1990-1992 cable funds, the Librarian of
Congress fully endorses and adopts her recommendation to
accept the Panel's decision in part and reject it in part." Id.
at 55,669. Accordingly, a summary of the final apportion-
ment of royalties approved by the Librarian is as follows:
Table 3: Librarian's Phase I Apportionment of Royalties
__________________________________________________________________________
Class ClaimantsBasic Funds3.75 FundsSyndex Funds
& Collection
Years
__________________________________________________________________________
Programmer
-199052.6336250%56.0125439%95.5000000%
-1991-199252.5250000%56.0131375%95.5000000%
__________________________________________________________________________
JSC
-199028.2355000%31.1605620%None
-1991-199228.1725000%31.2299325%None
__________________________________________________________________________
NAB
-19907.1820500%7.1688409%None
-1991-19927.1625000%7.1625000%None
__________________________________________________________________________
MC
-19904.5000000%4.5000000%4.5000000%
-1991-19924.5000000%4.5000000%4.5000000%
__________________________________________________________________________
PBS
-19905.5049750%NoneNone
-1991-19925.4912500%NoneNone
__________________________________________________________________________
Devotional
-19901.1938500%0.9080532%None
-1991-19921.1937500%0.9072500%None
__________________________________________________________________________
5CC
-19900.7500000%0.2500000%None
-1991-19920.9550000%0.1871800%None
__________________________________________________________________________
Source: Librarian Decision, 61 Fed.Reg. at 55,669.
The petitioners timely appealed the Librarian's decision.
NAB contends that it should have been awarded an
8.897025% share of the 1990 Basic and 3.75 Funds and an
8.815% share of the 1991-1992 Basic and 3.75 Funds, both of
which increases should be effected by corresponding reduc-
tions in Programmer's award. Devotional claims that it
should have been awarded a three per cent share of the Basic
and 3.75 Funds, or at the very least, its awards should have
been no lower than those proposed by the Panel; it does not
indicate, however, from whose award or awards such increas-
es should come. Finally, Programmer argues that it deserves
a larger award, the amount and source of which can be
determined only on remand to the Librarian.
II. STANDARD OF REVIEW
As provided by subsection 802(g) of the 1993 Act, we may
"modify or vacate a decision of the Librarian only if [we]
find[ ], on the basis of the record before the Librarian, that
the Librarian acted in an arbitrary manner." See 17 U.S.C.
s 802(g). The corresponding provision of the 1976 Act, sec-
tion 810, permitted review of a Tribunal decision "in accor-
dance with chapter 7 of title 5, on the basis of the record
before the Tribunal." 17 U.S.C. s 810 (1976). Notwithstand-
ing the difference in language between the 1993 Act and the
1976 Act, Devotional contends that our review of the Librari-
an's decision should be no different from our review of a
Tribunal decision; in both instances, the Administrative Pro-
cedure Act (APA)--i.e., 5 U.S.C. s 706(2)--supplies the ap-
propriate standard of review. Similarly, Programmer argues
that the APA's arbitrary and capricious test, 5 U.S.C.
s 706(2)(A), as interpreted in Motor Vehicle Manufacturers
Association v. State Farm Mutual Automobile Insurance
Co., 463 U.S. 20, 43 (1983), should control. Finally, NAB also
claims that we should continue to review the Librarian's
royalty distribution decision under a variant of the APA's
arbitrary and capricious test, see Motor Vehicle Mfrs., 463
U.S. at 43 ("In reviewing [an agency's] explanation, we must
consider whether the decision was based on a consideration of
the relevant factors and whether there has been a clear error
in judgment") (quotations omitted), although it concedes that
APA review may now be more limited than in the past and
that the "substantial evidence" test, 5 U.S.C. s 706(2)(E), no
longer applies.
Conversely, the intervenors argue that the APA's arbitrary
and capricious standard no longer applies: pursuant to sub-
section 802(f), the Librarian is obliged to adopt the Panel's
proposed settlement unless he finds it "arbitrary or contrary
to the applicable provisions of" Title 17; in turn, under
subsection 802(g), we may modify or remand the Librarian's
decision only if we conclude that he "acted in an arbitrary
manner" in applying the section 802(f) standard; this "double
arbitrary" standard is therefore narrower than APA review.6
The Librarian goes even further, arguing that our "judicial
review role in this case is at the outer edge of cases barely
reviewable under a criterion of substantive correctness." 7
Librarian Br. 14.
We conclude that our review of the Librarian's distribution
decision under subsection 802(g) is significantly more circum-
scribed than the review we made of Tribunal decisions under
section 810. As a result, in applying the "arbitrary manner"
standard set forth in subsection 802(g), we will set aside a
__________
6 Any difference between a "double-arbitrary" standard and a
"single-arbitrary" standard may well be illusory for if the Panel's
proposed award is patently arbitrary or plainly contravenes another
provision of Title 17, the Librarian's decision to approve the award
without modification would constitute "act[ing] in an arbitrary man-
ner" as well.
7 The Register's recommendation to the Librarian (which was
apparently adopted by the Librarian without alteration) suggests
that the Librarian's review of the Panel's proposed settlement is
indistinguishable from this Court's review of Tribunal royalty distri-
bution decisions. See Librarian Decision, 61 Fed. Reg. at 55,656
("Neither the [1993] Act nor its legislative history indicates what is
meant specifically by 'arbitrary,' but there is no reason to conclude
that the use of the term is any different than the 'arbitrary'
standard described in the [APA]."). Contrary to Programmer's
contention, however, the Register did not assert that our review of
the Librarian's decision had not changed. See id. at 55,656-57.
royalty award only if we determine that the evidence before
the Librarian compels a substantially different award. We
will uphold a royalty award if the Librarian has offered a
facially plausible explanation for it in terms of the record
evidence. While the standard is an exceptionally deferential
one, we think it is most consistent with the intent of the
Congress as reflected in the language, structure and history
of the 1993 Act.8
A. The Congress's Intent
Under the APA standards incorporated by section 810,
judicial review of the Tribunal's royalty distribution decisions
was already quite deferential. See NAB II, 772 F.2d at 926
n.3 (noting that standard of review applied to Tribunal royal-
ty apportionments is same standard "employed in ratemaking
cases coming from the Federal Energy Regulatory Commis-
sion[ ], an area in which a highly deferential standard of
review has traditionally been applied"). As we observed,
the judicial task is not to weigh the evidence and fix what
in our view would constitute appropriate percentages, for
that would be to intrude into the function entrusted to
the Tribunal. Our job, rather, is to determine whether
the royalty awards are within a "zone of reasonable-
ness"--not unreasonably high or unreasonably low--and
that the CRT's decision is neither arbitrary nor capri-
cious, and is supported by substantial evidence.
NAB II, 772 F.2d at 926; accord CBN, 720 F.2d at 1304 ("In
acknowledging the need for substantial evidence, however, we
emphasize that the Tribunal's choice of a particular percent-
__________
8 Even had the standard of review remained the same, we are
doubtful that any of the petitioners' arguments would lead us to
disturb the Librarian's Phase I apportionment. Nonetheless, given
our past experience with the "highly litigious copyright-owner sub-
culture," NAB II, 772 F.2d at 940, we think it useful to decide the
standard of review question now. But cf. Natural Resources
Defense Council, Inc. v. EPA, 725 F.2d 761, 767-68 (D.C. Cir. 1984)
(declining to select standard of review because regardless of stan-
dard applied result would be same).
age allocation is not reviewable for exact precision, but simply
for rationality; we are without power to set aside a particular
percentage allocation provided that it is within a 'zone of
reasonableness.' "); NAB I, 675 F.2d at 374 ("Claims of this
sort are generally well beyond the expertise or authority of
courts, however, and Congress made clear its awareness of
our limitations by making the Tribunal the primary arbiter of
these claims."); cf. Montana-Dakota Utils. Co. v. Northwest-
ern Pub. Serv. Co., 341 U.S. 246, 251 (1951) ("Statutory
reasonableness is an abstract quality represented by an area
rather than a pinpoint. It allows a substantial spread be-
tween what is unreasonable because too low and what is
unreasonable because too high. To reduce the abstract con-
cept of reasonableness to concrete expression in dollars and
cents is the function of the Commission.").
While the section 810 standard was "highly deferential," in
enacting the 1993 Act the Congress apparently concluded that
the standard was not deferential enough, as evidenced by the
repeal of section 810 and the enactment of subsection
802(g)--a provision that contains no reference to the APA.
We therefore reject Devotional's assertion that the Congress
did not intend to change the standard of review applicable to
royalty distribution decisions as to so hold would ignore plain
evidence of the Congress's intent to the contrary, a disfavored
construction. See Brewster v. Gage, 280 U.S. 327, 337 (1930)
("The deliberate selection of language so differing from that
used in earlier Acts indicates that a change of law was
intended."); In re Request for Assistance, 848 F.2d 1151, 1154
(11th Cir. 1988) ("When the legislature deletes certain lan-
guage as it amends a statute, it generally indicates an intent
to change the meaning of the statute."), cert. denied, 488 U.S.
1005 (1989). In light of the Congress's decision to remove
from the judicial review provision of the 1993 Act any refer-
ence to the APA, we also conclude that Programmer and
NAB err in suggesting that the arbitrary and capricious
standard continues to control our subsection 802(g) review.9
__________
9 The 1993 Act also repealed subsection 803(a) of the 1976 Act,
which provided that, "[e]xcept as otherwise provided in this chapter,
Moreover, subsection 802(g) plainly does not evince a con-
gressional intent to subject the Librarian's decision to more
searching review than we have in the past applied to a
Tribunal decision. Further, we cannot ignore the simplifica-
tion of review language the 1993 Act achieved: we now ask
__________
the Tribunal shall be subject to the provisions of the Administrative
Procedure Act [ ] ( ... title 5, United States Code, chapter 5,
subchapter II and chapter 7)." 17 U.S.C. s 803(a) (1976). The
1993 Act's sole reference to the APA is found in subsection 802(c),
which requires the Panel to conduct its proceedings "subject to
subchapter II of chapter 5 of title 5"--the notice and comment
provisions of the APA. See 17 U.S.C. s 802(c).
We find these changes, together with the significant structural
changes effected by the 1993 Act, to be compelling evidence of the
Congress's intent to limit the applicability of the APA. Thus, to the
extent the petitioners argue that the strong presumption in favor of
applying the APA requires us to adhere to the review standards set
forth in 5 U.S.C. s 706(2), we think this is one of those unusual
circumstances in which the Congress's intent is sufficiently clear to
overcome the presumption. Indeed, the Supreme Court reached a
similar conclusion in somewhat analogous circumstances:
Exemptions from the terms of the Administrative Procedure
Act are not lightly to be presumed in view of the statement in
s 12 of the Act that modifications must be express. ... But
we cannot ignore the background of the 1952 immigration
legislation, its laborious adaptation of the Administrative Proce-
dure Act to the deportation process, the specific points at which
deviations from the Administrative Procedure Act were made,
the recognition in the legislative history of this adaptive tech-
nique and of the particular deviations, and the direction in the
statute that the methods therein prescribed shall be the sole
and exclusive procedure for deportation proceedings. Unless
we are to require the Congress to employ magical passwords in
order to effectuate an exemption from the Administrative
Procedure Act, we must hold that the present statute expressly
supersedes the hearing provisions of that Act.
Marcello v. Bonds, 349 U.S. 302, 310 (1955); accord Asiana Air-
lines, Inc. v. FAA, 134 F.3d 393, 396-99 (D.C. Cir. 1998) (finding
APA notice and comment requirements inapplicable because their
simply whether "on the basis of the record before the Librari-
an, ... the Librarian acted in an arbitrary manner," 17
U.S.C. s 802(g), whereas formerly we asked whether the
Tribunal's decision was
(A) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege,
or immunity;
(C) in excess of statutory jurisdiction, authority, or
limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case
subject to sections 556 and 557 of [Title 5] or otherwise
reviewed on the record of an agency hearing provided by
statute; or
(F) unwarranted by the facts to the extent that the
facts are subject to trial de novo by the reviewing court.
5 U.S.C. s 706(2). Thus, for us to conclude that acting in an
"arbitrary manner" is synonymous with the list of administra-
tive transgressions set forth in the APA would be absurd. Cf.
Steadman v. SEC, 450 U.S. 91, 98-99 (1981) (finding signifi-
cant difference between APA's "substantial evidence" test
and statutory language requiring that agency's order be
"supported by and in accordance with ... substantial evi-
dence").
The 1993 Act also establishes a royalty distribution struc-
ture that differs from its predecessor in important respects.
First, the 1993 Act inserts an additional layer of administra-
tive review by the Register and the Librarian between the
factfinder's conclusions and our review. See 17 U.S.C.
s 802(e)-(f). The Tribunal, however, had both the first and
last administrative word under the procedure established by
the 1976 Act. See 17 U.S.C. ss 801-810 (1976). Second, the
two-stage decisionmaking process established by the 1993 Act
must now be completed in 240 days whereas the Tribunal had
__________
application would render superfluous statutory language specifying
rulemaking procedures agency was to follow).
365 days to conclude its single-stage process under the 1976
Act. Compare 17 U.S.C. s 802(e)-(f), with 17 U.S.C. s 804(e)
(1976). Third, the Panel's report must be accompanied by
the written record and need set forth only "the facts that the
arbitration panel found relevant to its determination," id.
s 802(e), whereas the Tribunal was obliged to "state in detail
the criteria that [it] determined to be applicable to the
particular proceeding, the various facts that it found relevant
to its determination in that proceeding, and the specific
reasons for its decisions," 17 U.S.C. s 803(b) (1976).10
Fourth, and perhaps most significantly, the 1993 Act changes
the paradigm for administrative decisionmaking: it replaces
the Tribunal's quasi-adjudication with an arbitration under-
taken by an ad hoc panel whose proposed settlement is then
reviewed by final decisonmakers, the Register and the Li-
brarian. See 1993 House Report at 11 ("The experience with
arbitration under the Section 119 [of Title 17] satellite com-
pulsory license was positive, and indicates that this approach
can work for the other royalty schemes in title 17").
The foregoing structural changes are also perfectly consis-
tent with the Congress's evident intent to facilitate expedi-
tious and informal settlement of claims at the administrative
level and to discourage resort to formal, protracted and costly
judicial processes of resolving disputes.11 See id. at 13
("[T]he panels, with the assistance of the Copyright Office,
must promulgate and be governed by clear procedural and
evidentiary guidelines designed to ensure fundamental fair-
ness. Rules of discovery that can expedite the parties' pre-
sentation of their cases are particularly important in this
__________
10 While the legislative history of the 1993 Act states that "[a]
clear report setting forth the panel's reasoning and findings will
greatly assist the Librarian of Congress" in conducting his review
of the report, a "clear report" is not required under subsection
802(e). 1993 House Report at 13.
11 Indeed, almost two years will have elapsed from the date of the
Librarian's final decision to judicial resolution of the parties' claims
for royalties that were collected, in some instances, more than eight
years ago.
respect, since early discovery and clear evidentiary rulings
can go far in facilitating settlements and a more streamlined
arbitration process."); cf. Devine v. White, 697 F.2d 421, 436
(D.C. Cir. 1983) ("Such a shift from the arbitral model, in
which decision makers are free to focus solely on the case
before them rather than on the case as it might appear to an
appellate court, to the administrative model, in which decision
makers are often concerned primarily with building a record
for review, would substantially undercut the ability of arbitra-
tors successfully to resolve disputes...."); Office & Profes-
sional Employees Union, Local 2 v. Washington Metro. Area
Transp. Auth., 724 F.2d 133, 137 (D.C. Cir. 1983) ("If parties
to arbitration could freely relitigate their complaints in the
courts, arbitration would cease to be a method to achieve
prompt resolution of conflict, but would instead become a new
layer of review, and a new cause for delay.").
We find additional evidence of a legislative intent to narrow
the scope of judicial review in the history of the 1993 and the
1976 Acts. The Senate bill that originally gave rise to the
1976 Act would have limited judicial review of a Tribunal
decision to three circumstances: "(1) The determination was
procured by corruption, fraud, or undue means; (2) there was
evident partiality or corruption in any of the members of the
Tribunal, or (3) any member of the Tribunal was guilty of any
misconduct by which the rights of any party were preju-
diced." 1976 House Report at 179. This standard is materi-
ally indistinguishable from the one set forth in the Arbitration
Act. See infra note 12. The House, however, concluded that
the Senate's judicial review provision was "far too restrictive,"
1976 House Report at 179, and thus it reported an amend-
ment to the bill, providing "for the full scope of review
provided by Chapter 7 of the Administrative Procedure Act,"
id. The House prevailed and section 810, providing for full
APA review, became law. See H.R. Conf. Rep. No. 94-1733,
at 81-82 (1976).
In enacting the 1993 Act, however, the House appears to
have come around to something closer to the Senate's original
proposal to limit judicial review of royalty distribution deci-
sions to claims cognizable under the Arbitration Act. Com-
pare infra note 12 (setting forth Arbitration Act review
provision that authorizes court to set aside award where there
is "evident partiality or corruption" by arbitrator), with 1993
House Report at 12-13 (1993) ("Given that many arbitrations
will involve multiple parties, the Librarian of Congress and
the Register of Copyrights must be scrupulous to avoid even
the appearance of selecting arbitrators that may be believed,
incorrectly or not, to favor one party.").
We agree nonetheless with the Librarian that there is
insufficient evidence to conclude that the Congress, in enact-
ing subsection 802(g), intended to adopt the extremely cir-
cumscribed review standard set forth in the Arbitration Act, 9
U.S.C. s 10.12 The 1993 Act does not expressly refer to the
Arbitration Act and the "arbitrary manner" language of
subsection 802(g) is far from synonymous with the limited
procedural and ethical infirmities supporting vacatur of an
arbitration award pursuant to the Arbitration Act. Cf. Office
& Professional Employees, 724 F.2d at 139 ("Because the
statutory framework of the [Railway Labor Act (RLA)] and
of the Compact [interstate agreement authorized by the
Congress] are substantially dissimilar, we cannot assume,
without any supporting evidence of legislative intent, that the
mere presence in both statutes of the words 'final and
__________
12 Under the Arbitration Act, a district court is authorized to set
aside an arbitrator's award only in the following circumstances:
(1) Where the award was procured by corruption, fraud, or
undue means.
(2) Where there was evident partiality or corruption in the
arbitrators, or either of them.
(3) Where the arbitrators were guilty of misconduct in refus-
ing to postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the contro-
versy; or of any other misbehavior by which the rights of any
party have been prejudiced.
(4) Where the arbitrators exceeded their powers, or so im-
perfectly executed them that a mutual, final, and definite award
upon the subject matter submitted was not made.
9 U.S.C. s 10(a).
binding' permits a court to superimpose the RLA's congres-
sionally-enacted standard of review [for arbitration awards]
onto the Compact."). Further, the structure of the royalty
distribution system, interposing a layer of administrative
review between the "arbitrators' " decision and our review of
that decision, further distinguishes the system established by
the 1993 Act from arbitrations covered by the Arbitration
Act. See Librarian Decision, 61 Fed. Reg. at 55,656 ("Typical-
ly, an arbitrator's decision is not reviewable, but the [1993]
act created two layers of review: the Librarian and the Court
of Appeals for the District of Columbia."). Finally, review of
the merits of an arbitrator's decision is generally proscribed
by the Arbitration Act, cf. Timken Co. v. Local Union No.
1123, United Steelworkers of Am., AFL-CIO, 482 F.2d 1012,
1014 (6th Cir. 1973) ("[W]hile a court is empowered to deter-
mine whether an arbitrator's award exceeded the limits of his
contractual authority ... it may not review the merits of an
arbitration award."), whereas subsection 802(g) appears to
permit some (albeit quite limited) review of the merits of the
Librarian's assessment of the settlement.
B. Applicable Standard of Review
Having sketched the general limits of our review, we must
now give content to the "arbitrary manner" standard of
subsection 802(g) and in so doing define more clearly the path
we follow in reviewing decisions of the Librarian. Cf. Stead-
man v. SEC, 450 U.S. 91, 95 (1981) ("Where Congress has not
prescribed the degree of proof which must be adduced by the
proponent of a rule or order to carry its burden of persuasion
in an administrative proceeding, this Court has felt at liberty
to prescribe the standard, for it is the kind of question which
has traditionally been left to the judiciary to resolve.") (inter-
nal quotations, brackets and citations omitted). As we have
repeatedly emphasized in earlier royalty distribution deci-
sions, any standard of review must be adapted to fit the
administrative decisionmaking process to which it is to be
applied. See NAB I, 675 F.2d at 375 ("Our assessment of the
Tribunal's procedures must consider the difficulties facing the
agency and the mandate given it by Congress."); Recording
Indus. Ass'n v. Copyright Royalty Tribunal, 662 F.2d 1, 8
(D.C. Cir. 1981) ("[W]e must bear in mind that the thorough-
ness of the factual support an agency can supply for its
decision will vary with the nature of the decision being
made.") (hereinafter RIA); National Cable Television v.
Copyright Royalty Tribunal, 724 F.2d 176, 181 (D.C. Cir.
1983) ("The tautness of court surveillance of the rationality of
agency decisionmaking, however, depends on the nature of
the task assigned to the agency. ... [I]f Congress entrusts a
novel mission to an agency and specifies only grandly general
guides for the agency's implementation of legislative policy,
judicial review must be correspondingly relaxed.") (hereinaf-
ter NCT). Further, the standard to which we hold an
administrative decisionmaker may become more rigorous over
time as the decisionmaker acquires greater experience with a
particular administrative scheme. See CBN, 720 F.2d at 1319
("As the Tribunal continues to accumulate experience with
royalty fee distributions, we continue to hope that the clarity
of its decisionmaking will improve."); cf. Permian Basin
Area Rate Cases, 390 U.S. 747, 792 (1968) ("We are, in
addition, obliged at this juncture to give weight to the unusual
difficulties of the first area proceeding; we must, however,
emphasize that this weight must significantly lessen as the
Commission's experience with area regulation lengthens.").
More fundamentally, in framing the standard of review, we
must respect the Congress's delegation of exceedingly broad
authority to the Librarian, as advised by the Register and the
Panel, to apportion royalties appropriately among the claim-
ants, just as we earlier honored the expansive authority
entrusted to the Tribunal to do the same:
We emerge from our analysis of these inherently subjec-
tive judgment calls and rough balancing of hotly compet-
ing claims with one overriding conclusion: it is the
Tribunal [now Librarian] which Congress, for better or
worse, has entrusted with an unenviable mission of divid-
ing up the booty among copyright holders. ... [T]he
broad discretion necessarily conferred on the Copyright
Royalty Tribunal [now Librarian] in making its distribu-
tions is emphatically clear.
NAB II, 772 F.2d at 940; accord NCT, 724 F.2d at 182 ("In
sum, Congress vested in the Tribunal legislative discretion
greater than that committed to regulatory agencies engaged
in cost of service rate making. ... We must recognize the
judgmental expertise of the Tribunal's members regarding
copyright policy, ... and demand only an accounting ade-
quate to assure us that the rates we review are not lacking in
rationality.").13
__________
13 To the extent the petitioners claim that the Librarian's decision
is not entitled to deference because ad hoc arbitration members do
not possess expertise in the area of cable royalties, we think their
claim misapprehends the source of our solicitude towards the
administrative decisionmaker's expertise. The Panel, as the initial
factfinder, is in the best position to weigh evidence and gauge
credibility. See Concrete Pipe, infra; cf. Asociacion de Composi-
tores y Editores de Musica Latinoamericana v. Copyright Royalty
Tribunal, 854 F.2d 10, 13 (2d Cir. 1988) ("[W]e must review a
challenge to the Tribunal's evidentiary rulings with some deference,
for the type of proof that will be acceptable and the weight it should
receive lie largely in the discretion of the [Tribunal].") (internal
quotations omitted). Moreover, by design, the expertise of both the
Register and the Librarian are applied to the royalty distribution
question through their review and approval or rejection of the
Panel's proposed settlement of claims and thus the decision that is
ultimately before us for review may fairly be said to be the product
of specialized administrative expertise. Cf. Federal Radio Comm'n
v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266, 276 (1933)
("Dealing with activities admittedly within its regulatory power, the
Congress established the commission as its instrumentality to pro-
vide continuous and expert supervision and to exercise the adminis-
trative judgment essential in applying legislative standards to a
host of instances. These standards the Congress prescribed. The
powers of the commission were defined, and definition is limitation.
Whether the commission applies the legislative standards validly set
up, whether it acts within the authority conferred or goes beyond it,
whether its proceedings satisfy the pertinent demands of due
process, whether, in short, there is compliance with, the legal
With respect to the particular administrative scheme estab-
lished by the 1993 Act, we note that although the word
"arbitrary" appears in both subsections 802(g) and 802(f), our
"arbitrary manner" review of the Librarian's decision is not
coextensive with the Librarian's "arbitrary and legal" review
of the Panel's proposed settlement. Compare 17 U.S.C.
s 802(g) (authorizing court to vacate or modify decision if
"the Librarian acted in an arbitrary manner ") (emphasis
added), with id. s 802(f) (requiring Librarian to adopt Panel's
proposed settlement unless it "is arbitrary or contrary to the
applicable provisions of this title") (emphasis added). This is
not a surprising administrative arrangement given the bifur-
cated review of royalty awards (first by the Librarian and
then by this Court) and the deference to be accorded the
Register's and the Librarian's expertise in royalty distribu-
tion. Cf. Concrete Pipe & Prods. of California, Inc. v.
Construction Laborers Pension Trust for S. California, 508
U.S. 602, 623 (1993) ("[A] reviewing body characteristically
examines prior findings in such a way as to give the original
factfinder's conclusions of fact some degree of deference.
This makes sense because in many circumstances the costs of
providing for duplicative proceedings are thought to outweigh
the benefits (the second would render the first ultimately
useless), and because, in the usual case, the factfinder is in a
better position to make judgments about the reliability of
some forms of evidence than a reviewing body acting solely
on the basis of a written record of that evidence."); United
States v. Morgan, 313 U.S. 409, 416-17 (1941) ("Another
attack upon the Secretary's order is the conventional objec-
tion that the findings were not rooted in proof. To reexamine
here with particularity the extensive findings made by the
Secretary and to test them by a record of 1340 printed pages
and thousands of pages of additional exhibits would itself go a
long way to convert a contest before the Secretary into one
before the courts.").
__________
requirements which fix the province of the commission and govern
its actions, are appropriate questions for judicial decision.").
Moreover, subsection 802(g) plainly limits our review to the
Librarian's decision. That the Panel may have acted arbi-
trarily affords no basis for this Court to set aside a royalty
award unless the Librarian "acted in an arbitrary manner" in
ratifying the Panel's action. For example, we think the
Librarian would plainly act in an arbitrary manner if, without
explanation or adjustment, he adopted an award proposed by
the Panel that was not supported by any evidence or that was
based on evidence which could not reasonably be interpreted
to support the award. Cf. Northern Pac. Ry. v. Department
of Pub. Works, 268 U.S. 39, 44-45 (1925) ("An order based
upon a finding made without evidence, ... or upon a finding
made upon evidence which clearly does not support it, ... is
an arbitrary act against which courts afford relief.") (internal
citations omitted); ICC v. Louisville & Nashville R.R., 227
U.S. 88, 91 (1913) ("A finding without evidence is arbitrary
and baseless.... In the comparatively few cases in which
such questions have arisen it has been distinctly recognized
that administrative orders, quasi judicial in character, are
void if ... the finding was contrary to the indisputable
character of the evidence ... or if the facts found do not, as a
matter of law, support the order made ....") (internal quota-
tions and citations omitted); Concrete Pipe, 508 U.S. at 623
("And application of a reasonableness standard is even more
deferential than [clear error review], requiring the reviewer
to sustain a finding of fact unless it is so unlikely that no
reasonable person would find it to be true, whatever the
required degree of proof."); INS v. Elias-Zacarias, 502 U.S.
478, 481 n.1 (1992) ("To reverse the [Board of Immigration
Appeals] finding we must find that the evidence not only
supports [a contrary] conclusion, but compels it.").
In addition, in reviewing the Panel's proposed settlement
according to the "legal" half of the "arbitrary and legal"
standard of subsection 802(f), we think the Librarian would
act in an arbitrary manner if he approved an award proposed
by the Panel that unmistakably contravened applicable provi-
sions of Title 17 or if he himself transgressed unequivocal
statutory commands. Cf. Stark v. Wickard, 321 U.S. 288,
309-10 (1944) ("When Congress passes an Act empowering
administrative agencies to carry on governmental activities,
the power of those agencies is circumscribed by the authority
granted. This permits courts to participate in law enforce-
ment entrusted to administrative bodies only to the extent
necessary to protect justiciable individual rights against ad-
ministrative action fairly beyond the granted powers. The
responsibility of determining the limits of statutory grants of
authority in such instances is a judicial function entrusted to
the courts."); Chamber of Commerce of United States v.
Reich, 74 F.3d 1322, 1327 (D.C. Cir. 1996) (" '[A]cts of all [a
government department's] officers must be justified by some
law, and in case an official violates the law to the injury of an
individual the courts generally grant relief. ... Otherwise
the individual is left to the absolutely uncontrolled and arbi-
trary action of a public and administrative officer, whose
action is unauthorized by any law, and is in violation of the
rights of the individual.' ") (quoting American School of Mag-
netic Healing v. McAnnulty, 187 U.S. 94, 108, 110 (1902)).
Of course, in assessing whether a particular award contra-
venes provisions of the 1993 Act, the Librarian's interpreta-
tion of ambiguous provisions that he is charged with adminis-
tering is due deference. See Chevron USA, Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 844 (1984)
("We have long recognized that considerable weight should be
accorded to an executive department's construction of a statu-
tory scheme it is entrusted to administer."); NBC, 848 F.2d
at 1296 (finding Tribunal's adoption of presumption, "in the
face of congressional silence, ... a permissible interpretation
of the statute, to which we defer" under Chevron, 467 U.S. at
842-43).
Accordingly, if the Librarian's final award to a class claim-
ant bears a rational relationship to the record evidence, is
plausibly explained and is otherwise developed in a manner
that does not plainly contravene applicable statutory provi-
sions, our task is at an end and we must uphold the award.
While we acknowledge the deference that this approach ac-
cords to the Librarian's decision is unusually wide, it com-
ports with the unusual character of the cable royalty distribu-
tion system that the Congress has devised. See American
Pub. Gas Ass'n v. Federal Power Comm'n, 567 F.2d 1016,
1031 (D.C. Cir. 1977) ("When regulation features novelty, in
subject, technique, or both, the narrow scope of review estab-
lished by conventional doctrine is further circumscribed.").
III. THE PETITIONERS' CHALLENGES
Applying the arbitrary manner standard of review to the
individual claims raised by the petitioners, we conclude that
none of them affords a basis for vacating or remanding the
Librarian's decision.
A. Programmer's Claims
Programmer advances three reasons to remand the Librar-
ian's decision: (1) his order did not catenate each award to
substantial record evidence and he did not himself explain
and assess the basis for each award; (2) he acceded to the
Panel's illegal elimination of the "harm" criterion from the
royalty apportionment calculus; (3) his order, adopting the
Panel's proposed settlement as modified by the Register's
recommendation, was arbitrary because it (a) endorsed the
Panel's differential treatment of identically situated claim-
ants, (b) did not remedy the Panel's improper reliance on
certain evidence to determine JSC's award and (c) ratified the
Panel's unduly large award to PBS, failing to take proper
account of evidence suggesting a different result. None of
these arguments is persuasive.
(1) Adequacy of Librarian's Order
Programmer's first argument is that the Librarian's order
should have discussed the evidence before the Panel and the
way in which that evidence ultimately led the Panel, and
subsequently the Register and the Librarian, to conclude that
each award was appropriate. In other words, it was incum-
bent on the Librarian to duplicate the work of the Panel and
the Register in a final order so that the reasoning underlying
a particular award would be less caliginous. See Programmer
Br. 6 ("The Librarian's failure to create a complete picture
reflects a lack of reasoned decisionmaking."). Although Pro-
grammer has not cast its argument in these terms, its claim is
essentially twofold: (1) subsection 802(f) required the Librari-
an to issue an order that fully discussed each stage of the
decisionmaking process as well as the evidentiary bases for
each of the awards; (2) even if subsection 802(f) did not
require this of the Librarian, it was nonetheless arbitrary for
him not to issue such an order on his own. We do not agree.
First, section 802 of Title 17 cannot fairly be understood to
oblige the Librarian or the Register to duplicate the work of
the Panel. The two-step Chevron framework guides our
assessment of the Librarian's interpretation:
Under this analysis, the court must first exhaust the
traditional tools of statutory construction to determine
whether the Congress has spoken to the precise question
at issue.... If the court can determine congressional
intent, then that interpretation must be given effect....
If, on the other hand, the statute is silent or ambiguous
with respect to the specific issue, then the court will
defer to a permissible agency construction of the statute.
Natural Resources Defense Council, Inc. v. Browner, 57 F.3d
1122, 1125 (D.C. Cir. 1995) (internal citations and quotations
omitted).
Under step one of the Chevron analysis, we look to the
statutory language and structure to determine the Librarian's
obligations. Cf. Steadman, 450 U.S. at 97 ("The search for
congressional intent begins with the language of the stat-
ute."). According to subsection 802(e), the Panel is to pre-
pare and forward to the Librarian a "report" that is "accom-
panied by the written record" and that "sets forth the facts
that the arbitration panel found relevant to its determina-
tion." Subsection 802(f) does not similarly oblige the Librari-
an to make a report of his findings. See 17 U.S.C. s 802(f),
quoted supra. Indeed, the statute gives the Librarian only
60 days to review the Panel's report and within that time
period he must adopt the proposed settlement unless he finds
it arbitrary or illegal. Id. If he rejects the Panel's proposal,
then, without any enlargement of the review period, the
Librarian must "issue an order setting the ... distribution of
fees." Id. (emphasis added). In either instance, the Librari-
an must arrange for Federal Register publication of his
decision and "the determination of the arbitration panel" and
he must also make available for public inspection and duplica-
tion the Panel's report and the record accompanying it. Id.
In view of these statutory requirements, we cannot con-
clude that the Librarian is required by subsection 802(f) to
issue an order fully recapitulating the work of the Register
and the Panel. Had this been the Congress's intent, there
would have been no need to require the Librarian to make
available the Panel's report and accompanying record, and
according to well-established principles of statutory construc-
tion, we do not read subsection 802(f) in a manner that
renders superfluous the final sentence of that provision. See
Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) ("In
construing a statute we are obliged to give effect, if possible,
to every word Congress used.").
Moreover, we find nothing unreasonable or impermissible
about the Librarian's understanding of his obligations under
subsection 802(f). Cf. NAB I, 675 F.2d at 376 ("The Tribunal
was free to structure its proceedings in a reasonable fashion,
... and deference is particularly due where courts review
statutory interpretations by the agency charged with the
responsibility of setting [the] machinery in motion, of making
the parts work efficiently and smoothly while they are yet
untried and new."). Indeed, the virtues of the Librarian's
interpretation are obvious: it avoids duplication of effort and
better enables him to conclude his responsibilities within the
60 days subsection 802(g) allots for his review and (if neces-
sary) modification of the Panel's proposed settlement. See
Puerto Rico Maritime Shipping Auth. v. Federal Maritime
Comm'n, 678 F.2d 327, 352 (D.C. Cir. 1982) ("The Commis-
sion's Order, coupled with the ALJ's opinion, adequately
informs us of its findings and its reasoning. In the context of
these expedited proceedings, we ask no more.").
Second, under the standard of review articulated in Part II,
supra, we find nothing in the Librarian's decision to adopt the
Panel's proposed settlement, as modified in certain particu-
lars by the Register's recommendation, that suggests he
discharged his review obligations in an arbitrary manner.
See CBN, 720 F.2d at 1304 ("Accordingly, as we stated in
[NAB I], the Tribunal's findings will be upheld, though of less
than ideal clarity, if the path which the agency follows can
reasonably be discerned.") (internal citations and quotations
omitted); id. at 1306 ("It is well established that an agency
may explain itself by incorporating by reference parts of the
record....").14
(2) Elimination of Harm Criterion
Programmer next argues that the Librarian acted in an
arbitrary manner in approving the Panel's conclusion that the
harm criterion is not a useful means by which to assess the
merits of a class claim.15 This argument, like the preceding
__________
14 Contrary to Programmer's suggestion, we find nothing improp-
er in the Register's submission of questions to the Panel to clarify
its reasons for proposing a particular award. As with the Librari-
an's decision, subsection 802(f) does not elaborate on the content of
the Register's recommendation to the Librarian. In the face of
such legislative silence, Chevron deference is due the Register's
interpretation, which is plainly not unreasonable. Further, to the
extent Programmer suggests that the Register's "remand" to the
Panel impermissibly lengthened the Librarian's review period and
that the Librarian's decision should be set aside on this basis, we
disagree. Even if correct, a missed deadline in a case such as this
cannot justify invalidation of the Librarian's decision. See NCT,
724 F.2d at 189 n.23 ("It would be irrational and wholly unprece-
dented for a court to direct an agency to scrap a year's hearings
and decisionmaking effort and start over because its proceeding did
not conclude precisely on time.").
15 The Register's recommendation, adopted by the Librarian,
described the Panel's rejection of the harm criterion as follows:
It is clear from the Panel's answer [to certified questions about
the harm criterion] that, rather than treating all parties as
equally harmed and awarding equal shares of harm credit, the
Panel effectively determined that the harm criterion was a
complete nonfactor. The panel did not consider harm to be of
any value in determining the distribution percentages, instead
one, has two parts: (1) the Panel violated subsection 802(c)
and the Librarian did not take appropriate corrective action;
(2) the Panel did not sufficiently explain or support by
reference to the record evidence its decision to eliminate the
harm criterion and the Librarian did not remedy the deficien-
cy. The argument is meritless.
Contrary to Programmer's contentions, our past decisions
make clear that the Congress delegated to the Tribunal (and
now to the Librarian, the Register and the Panel) responsibil-
ity for developing the criteria by which claims are to be
assessed. See NAB I, 675 F.2d at 376 ("The Act explicitly
contemplates that the Tribunal will announce its decisional
criteria in the 'final determination.' ") (emphasis added);
CBN, 720 F.2d at 1313 ("In light of Congress' evident intent
to leave the development of 'particular, limiting standards for
distribution' to the Tribunal, ... we have affirmed the Tribu-
nal's five allocative factors as a reasonable interpretation of
legislation by the agency charged by Congress with its en-
forcement.") (emphasis added); 1976 House Report at 97.
Moreover, we can find nothing in the language, structure or
history of subsection 802(c) that evinces any intent to rescind
the former delegation of authority to determine the appropri-
ate criteria by which to gauge distribution claims. Subsection
802(c) merely states that "arbitration panels shall act on the
basis of a fully documented written record, prior decisions of
the Copyright Tribunal, prior copyright arbitration panel
determinations, and rulings by the Librarian of Congress
under subsection 801(c)." 16 17 U.S.C. s 802(c) (emphasis
__________
it emphasized the marketplace value criteria. As a result, all
parties received a zero credit for harm, and the evidence
presented by the parties regarding this factor was given no
weight.
Librarian Decision, 61 Fed. Reg. at 55,658.
16 Subsection 801(c) provides:
The Librarian of Congress, upon the recommendation of the
Register of Copyrights, may, before a copyright arbitration
royalty panel is convened, make any necessary procedural or
added). Similarly, while the ad hoc panel is now the initial
factfinder, its decision is subject to scrutiny by both the
Register and the Librarian and, if the latter do not concur in
the panel's rejection of prior Tribunal practice, they may
force compliance with that practice. See, e.g., Librarian
Decision, 61 Fed. Reg. at 55,661 (concluding that Panel should
have adhered to Tribunal practice of setting final percentage
awards on basis of awards to all classes, regardless whether
class settled its claims or litigated them before Panel). This
arrangement also dovetails with the Librarian's obligations
under the arbitrary and legal review standard of subsection
802(f) as well as his authority, pursuant to subsection 801(c),
to issue orders establishing the procedures the Panel and
claimants are to follow. Accordingly, we defer to the Librari-
an's reasonable and permissible interpretation of the require-
ments of subsection 802(c) under the second step of the
Chevron analysis.17
Nor has Programmer given us any basis to conclude that
the Librarian "acted in an arbitrary manner" in finding that
the Panel's elimination of the harm criterion was neither
arbitrary nor contrary to applicable law. The policy reasons
Programmer advances to support retaining the harm criterion
are misdirected; those are matters for the Librarian and his
agents, not this Court. Cf. NAB II, 772 F.2d at 940. Simi-
larly, the Panel's explanation for jettisoning the harm criteri-
on, as refined by the Register's recommendation and the
Librarian's decision, is more than adequate to survive scruti-
ny under the arbitrary manner standard; the Panel explained
that the harm criterion was in fact simply a different expres-
sion of diminution in market value and that the evidence did
not provide for any meaningful way to distinguish among the
__________
evidentiary rulings that would apply to the proceedings con-
ducted by such panel.
17 U.S.C. s 801(c).
17 Accordingly, we also defer to the Librarian's and the Panel's
reasonable interpretation of the "harm" criterion as applied by the
Tribunal in the past.
parties.18 No more was required of the Panel or of the
Librarian in adopting the Panel's conclusion. Thus, having
properly rejected the utility of such evidence, neither the
Panel nor the Librarian was obliged to go further.
(3) Panel's Evidentiary Findings
Finally, Programmer claims that the Librarian acted in an
arbitrary manner by approving the Panel's proposed awards
as adjusted by the Register's recommendation even though
the Panel (1) did not evaluate market value according to a
uniform set of criteria with respect to the Devotional and
NAB awards, (2) did not accord similar weight to comparable
evidence with respect to the JSC award and (3) did not
consider some evidence that plainly detracted from its conclu-
sions with respect to the PBS award.19 However, none of the
__________
18 The Panel responded to the Register's certified questions re-
garding the harm criterion as follows:
[T]he panel found that evidence of harm was not quantifiable
and did not establish that any one party was entitled to a harm
credit more than any other party. Other than identifying that
a claimant whose program was transmitted without compensa-
tion has been harmed, it did not lend any appreciable informa-
tion on relative market value. At least two expert witnesses
testified that "harm" is merely another way of describing, or an
aspect of, the supply side of the market, just as "benefit" is
another way of describing, or an aspect of, the buyer's side of
the market.
Panel Responses to Certified Questions at 4; accord Panel Report
at 20-25 (concluding that " 'market value' is the only logical and
legal touchstone" by which to assess the merits of various class
claims).
19 To the extent Programmer claims that subsection 802(f) allows
the Librarian only two choices--adoption or rejection of the Panel's
report in toto--we find nothing in the language of the provision that
requires that interpretation and thus we accord the Librarian's
reasonable interpretation deference under Chevron. Cf. NBC, 848
F.2d at 1296 ("This presumption by the [Tribunal], in the face of
congressional silence, is a permissible interpretation of the statute,
to which we defer."). Further, we think it plain from the Librari-
an's order that the Register (and thus the Librarian) adopted the
asserted errors provides a basis for adjusting Programmer's
award. Even if the awards to Devotional, NAB, JSC and
PBS were arbitrary, Programmer does not explain how cor-
recting the errors would benefit it. Indeed, to the extent
Programmer's first claim suggests that Devotional's claim
was undervalued, success on the claim could threaten only to
reduce the Programmer award. Accordingly, because sub-
section 802(g) grants an appeal only to an "aggrieved party,"
and because Programmer has failed to show how it has been
aggrieved by the Panel's allegedly arbitrary evidentiary find-
ings regarding other classes' awards, we cannot hear the
claims. See Asociacion de Compositores y Editores de Musi-
ca Latinoamericana v. Copyright Royalty Tribunal, 809 F.2d
926, 928 (D.C. Cir. 1987) ("ACEMLA, however, is not ag-
grieved by the award to LAMCO. The two are, for our
purposes, separate entities; ACEMLA thus has no statutory
basis to challenge that portion of the [Tribunal's] decision that
affects LAMCO.").
B. Devotional's Claims
Devotional requests that we adjust its award upward to
correct for four errors that the Librarian allegedly made in
approving Devotional's award, as it was adjusted by the
Register's recommendation: (1) the Librarian failed to inde-
pendently examine the record and make his own determina-
tion as to the appropriate share of the royalty funds to which
each class was entitled; (2) the Panel awarded Devotional a
__________
Panel's proposed settlement, except for the technical adjustments
the Register recommended. See Librarian Decision, 61 Fed. Reg.
at 55,653 ("The Librarian is adopting in part and rejecting in part
the decision of the Copyright Arbitration Royalty Panel (CARP).
The rejection takes the form of making some adjustments to the
distribution percentages."); id. at 55,669 ("[T]he Librarian of Con-
gress fully endorses and adopts her [the Register's] recommenda-
tion to accept the Panel's decision in part and reject it in part. For
the reasons stated in the Register's recommendation, the Librarian
is exercising his authority under 17 U.S.C. s 802(f) and is issuing an
order setting the distribution of cable royalty fees.").
share of the royalties that was nominally the same as its
share of the 1989 funds, but the Librarian, without any
evidentiary basis for his decision, adjusted downward the
Panel's proposed award to account for certain settlements the
Panel overlooked in its calculations; (3) the Librarian ratified
the Panel's arbitrary failure to increase the Devotional's
share as a result of the elimination of the harm criterion; (4)
the Librarian acceded to the Panel's arbitrary failure to
accord Devotional's viewership surveys and testimonial evi-
dence the same weight as it gave other claimants' evidence of
this kind. None of these claims warrants vacating or re-
manding Devotional's award.
(1) Librarian's Order
Devotional's first argument fails for the same reasons
Programmer's similar argument failed. As discussed above,
subsection 802(f) cannot reasonably be construed to require
the Librarian to duplicate the efforts of the Panel and the
Register; here the path of decisionmaking is reasonably
transparent and there is nothing unreasonable in the Librari-
an's decision to issue an order that addresses only the specific
problems the Register (and thus the Librarian) identified in
the original Panel report. See supra Part III.A.(1).20
__________
20 Nor is the mere fact that Devotional's award represented a
compromise between differing expert views of the value of its
programming a sufficient basis for finding the compromise figure
arbitrary. See NAB II, 772 F.2d at 940 (observing that percentage
awards are "inherently subjective judgment calls" and require
"rough balancing of hotly competing claims"); NCT, 724 F.2d at 187
("In essence, it appears that the [Tribunal] attempted to 'split the
difference.' We have upheld similar exercises of the [Tribunal's]
expert judgment before."). Moreover, the suggestion that the
Panel's process fell below the minimum constitutional requirements
of the Due Process Clause is specious. Cf. NAB I, 675 F.2d at 376
("Neither the Act nor the requirements of the due process were
violated by the Tribunal conducting that apportionment with the
open-mindedness that should accompany the performance of any
task for the first time.").
(2) Librarian's Explanation of Adjustment
The contention that neither the Librarian nor the Panel
articulated a rational reason for reducing Devotional's award
is also without merit. The Panel erroneously predicated its
proposed settlement on the assumption that 100% of the
royalty funds collected for 1990-1992 were in dispute. See
Panel Responses to Certified Questions at 3-5 (acknowl-
edging that Panel did not adjust proposed awards for NPR
settlement and that award to Devotional was "based on a
100% scale"). Consistent with the Register's recommenda-
tion, the Librarian corrected this mistaken assumption by
adjusting all of the class awards by an appropriate percentage
to account for the settlement of certain claims. See Librarian
Decision, 61 Fed. Reg. at 55,661. As a result, Devotional's
final share of the royalty funds was slightly lower than its
share of the 1989 funds. Compare Table 2 with Table 3.
Specifically, the relative difference between the Panel's pro-
posed award and the Librarian's final award was on the order
of 5.62% for the Basic Funds and 4.275% for the 3.75 Fund,
corresponding to an absolute difference of 0.06 and 0.04
percentage points, respectively.
Devotional argues that because the Panel found that its
circumstances had not changed, the Panel intended to award
Devotional the same amount that it received in the earlier
distribution (after the settlements). Because the earlier
amount was a post-adjustment figure, it seems to be arguing
that the Librarian should not have reduced its award in
adjusting for the Panel's omission of the settlement. In
Devotional's view, the reduction gave it a post-adjustment
award lower than its earlier award and this lower award does
not make sense in light of its unchanged circumstances. (Its
argument implies that it would be happy if the Librarian had
acknowledged the settlement by adjusting every other party's
award, but not its.)
Even if Devotional were correct that the Panel intended to
award it the same percentage it received in the earlier
distribution, we are reviewing the Librarian's decision, not
the Panel's. The Librarian's method of correcting the Panel's
mistake was neither arbitrary nor irrational. The Librarian
understood the arguments made by each party and explained
why he did not accept the Panel's original judgment. In
making his ultimate decision, he made a reasonable judgment
that it was not necessary to reconsider the relative entitle-
ments of each party in order to correct the Panel's mistake.
We need not decide whether the Panel had intended to give
Devotional a post-adjustment award equal to its earlier award
because the Librarian's final figure is only slightly changed
from the earlier one and remains within the zone of reason-
ableness. See NCT, 724 F.2d at 182 ("There has never been
any pretense that the [Tribunal's] rulings rest on precise
mathematical calculations; it suffices that they lie within a
zone of reasonableness."); NAB I, 675 F.2d at 379 (rejecting
arguments regarding quantitatively de minimis interests).
(3) Elimination of Harm Criterion
Devotional next argues that elimination of the harm criteri-
on should have resulted in an enlargement of its award. This
argument is also meritless. The harm criterion was but one
factor in the Tribunal's five-factor distribution calculus. See
supra Part I.A. Thus, the Panel's elimination of a single
factor hardly compels a particular adjustment to a class's
award based on the benefit or detriment the class may have
derived from the factor in the past. Indeed, while the Panel
eliminated the harm criterion, it also increased the weight
given to the marketplace value criterion, see Panel Report at
23. The effect of eliminating the harm factor is therefore
indeterminate; without knowing the relative magnitude of the
change according to each factor and whether any of the
assessments of other factors changed, it is well nigh impossi-
ble to predict what effect the elimination of the harm factor
might have on a final award. Cf. NAB II, 772 F.2d at 935
("Thus the issue is not whether the Canadians objectively
improved the quality of their evidentiary submissions, but
rather whether any such improvement was sufficient to war-
rant an award from the 1980 fund greater than the 1979
award, in light of the submissions made by other claimants.")
(emphasis added). Accordingly, the fact that Devotional's
award did not increase as a result of the elimination of the
harm criterion does not suggest arbitrary action by either the
Panel or the Librarian.
Moreover, the fact that the Panel found that Devotional's
circumstances had not changed since the distribution of 1989
funds does not require a different conclusion. As in past
distribution proceedings, the "changed circumstances" inquiry
was only one factor influencing the amount of royalties to
which a class of claimants was deemed entitled and therefore
the fact that this variable remained constant is no reason to
presume that all other variables did, that other classes'
relative shares remained the same or that this factor alone
should control a class's award. Indeed, in the past we have
explained the significance of the changed circumstances factor
in the following manner:
We agree that, as the parties themselves recognize, it
would be improper, as a matter of law, for the Tribunal
to rely solely upon a standard of "changed circum-
stances." The invalidity of this rigid approach is strong-
ly suggested by our two prior opinions, which expressly
contemplated that in the annual determination process
the claimants would improve upon the quality and so-
phistication of their evidentiary submissions. At the
same time, it is entirely appropriate for the Tribunal to
employ, as one of its analytical factors, the determination
whether circumstances have changed in the course of the
ensuing twelve months, inasmuch as that conclusion will
obviously be relevant to the question whether an award
should differ from the prior year's award. But if a
claimant presents evidence tending to show that past
conclusions were incorrect, the Tribunal should either
conclude, after evaluation, that the new evidence is un-
persuasive or, if the evidence is persuasive and stands
unrebutted, adjust the award in accordance with that
evidence.
NAB II, 772 F.2d at 932 (emphasis added); accord id. at 938
(rejecting similar argument that no change in circumstances
should have resulted in no change in percentage awarded).
We therefore find no reason to set aside the Devotional
award.
(4) Weighing of Evidence
Finally, Devotional suggests that the Panel arbitrarily ac-
corded less weight to some of Devotional's evidence than it
accorded to similar evidence introduced by other class claim-
ants. We do not agree. To begin, it is emphatically not our
role to independently weigh the evidence or determine the
credibility of witnesses--two duties entrusted solely to the
Panel and, before it, the Tribunal. See NAB II, 772 F.2d at
926 ("[T]he judicial task is not to weigh the evidence and fix
what in our view would constitute appropriate percentages.").
Further, in view of the exceptionally deferential review we
give the Librarian's awards, we can find nothing arbitrary in
the Panel's treatment of the evidence to which Devotional
refers. The fact that the Panel found that the Nielsen and
Bortz survey results reinforced one another with respect to
PBS's award but did not increase Devotional's award as a
result of increased viewership of Devotional programming
does not demonstrate that the Panel (and subsequently the
Librarian) arbitrarily discredited Devotional's evidence.21 Cf.
__________
21 The Nielsen and Bortz surveys were the principal and most
important statistical evidence before the Panel. See Panel Report
at 27-66. The Nielsen survey assesses the percentage of viewers
each type of programming attracts whereas the Bortz survey
calculates the value of the types of programming to cable transmit-
ters--which does not correlate perfectly to shares of viewers be-
cause cable companies may be more interested in acquiring certain
kinds of programming to diversify their offerings even though the
programming may have a narrower following. Id.
In Devotional's case, the uncorrected Bortz numbers show no
clear trend: for 1989 cable operators were willing to pay 4.3% of
specified funds for the Devotional programming; for 1990 they paid
3.8%; for 1991 they paid 4.3% and for 1992 they paid 3.9%.
Similarly, the Nielsen numbers for the same period do not reflect
any meaningful trend: for 1989, the Nielsen number was 0.22% of
viewers according to the survey methodology then in use; for 1990
the number, using a different methodology, was 1.0%; for 1991, the
NAB I, 675 F.2d at 381 ("The argument once again comes
down to methodology, and the Tribunal's refusal to rely
blindly on the data put forward by [a claimant] was not
unreasonable. The two approaches lead to a difference of
only three percentage points of the Fund, and we cannot say
that the Tribunal's choice falls outside a zone of reasonable-
ness."). Moreover, both the cable operator testimony and the
survey evidence to which Devotional refers fail to demon-
strate that the award the Panel ultimately arrived at in each
case was arbitrary. Simply because a claimant presented
strong evidence of one type does not compel the conclusion
that an award based on all of the evidence should have been
different: the Panel's ultimate decision necessarily rested
upon composite judgments as to the overall strength of the
evidentiary case submitted in support of and against a class
claim. Additionally, with respect to the cable operator testi-
mony Devotional introduced, the Panel found the testimony
less compelling than other operator testimony--which was
well within its prerogative. Compare Panel Report at 130
("The cable operator's assessment is not supported by any
new, persuasive evidence of avidity"), with id. at 87-88 (de-
scribing JSC's operator testimony, in context of strong statis-
tical and other evidence cumulatively corroborating operator
testimony); accord Librarian Decision, 61 Fed. Reg. at 55,666
("When a decision-making body weighs evidence, it may often
decide to accept one piece of evidence but reject another,
even though they appear similar. Anderson v. Bessemer
City, 470 U.S. 564, 574 (1985)."). Accordingly, we find noth-
ing compelling in the evidentiary record nor in the Panel's
and the Librarian's assessment of that record that would
enable us to conclude that the Librarian acted in an arbitrary
manner in fixing Devotional's award. See Librarian Decision,
61 Fed. Reg. at 55,666 ("While the Panel's explanation was
less than compelling, ... enough can be gleaned from it to
support the conclusion that the Panel rationally weighed the
differences in seemingly similar evidence.").
__________
number was less than 1.0%; for 1992, the number was once again
1.00%.
C. NAB's Claims
NAB argues that the Librarian acted in an arbitrary
manner by failing to adjust its award upward (and Program-
mer's award downward) for certain categorization errors that
were made in compiling the Nielsen results for NAB pro-
gramming. The argument proceeds from the premise that
the Panel, and subsequently the Register and the Librarian,
intended to award NAB a percentage of royalties within the
range described by the lower bound of its Nielsen survey
results. The Panel and the Librarian failed to effect this
intent, however, because they relied on incorrect Nielsen
numbers in fixing the amount of NAB's award at 7.5% of both
the Basic Fund and the 3.75 Fund--the midpoint of the lower
range described by NAB's Nielsen numbers, i.e., 7.0% to
8.0%. Instead, NAB contends that the Panel, and subse-
quently the Librarian, should have adjusted the Nielsen
results for certain alleged miscategorization errors involving
two programs--"National Geographic Explorer," a NAB pro-
gram, and "National Geographic on Assignment," a Program-
mer program--resulting in a larger award to NAB. We can
find nothing in these claims to suggest that the Librarian
"acted in an arbitrary manner" in declining to adjust the
NAB award.
To begin, because it is the Librarian's decision which is
directly before us on review, not the Panel's, the Librarian's
understanding of the Panel's intent with respect to a particu-
lar award is controlling unless patently implausible on the
record before him. Here, it is plain that neither the Librari-
an nor the Panel intended to make the Nielsen results the
sole determinant of NAB's share of the royalty funds. See
Librarian Decision, 61 Fed. Reg. at 55,665 ("The Panel has
clarified that it did not intend to award NAB its Nielsen
viewing share, but was only using those numbers as a refer-
ence point for determining the award."). As a result, even if
NAB is correct on its miscategorization claim, the claim fails
to provide a basis for setting aside the award; the adjusted
Nielsen figures were but one item of evidence that supported
the Panel's calculation of fair market value of the program-
ming, the "only logical and legal touchstone" for apportioning
royalties. Panel Report at 23; accord Panel Responses to
Certified Questions at 4 ("It was the Panel's assessment that
7.5% was the fair market value of [NAB] programming.");
Panel Report at 44 ("We cannot quantify the Nielsen statis-
tics as evidence of market value other than to say that actual
viewing is very significant when weighed with all other fac-
tors.") (emphasis added).
Moreover, even if the Panel and the Librarian had intended
to tie the NAB award to the lower limits of its Nielsen
viewing share, we find nothing arbitrary in the Panel's and
the Librarian's successive refusals to correct the Nielsen
numbers.22 It was well within the Panel's prerogative to
weigh the miscategorization evidence and other testimony and
conclude that, given the fact the Nielsen results were at best
an imperfect proxy for market value, it did not make sense to
attempt to refine the figures:
Dr. Peter Miller, in testifying for the JSC, says the
Nielsen figures should be looked at with some degree of
caution. He says the numbers could be biased in one
direction or another but that this cannot be quantified
and that we should take those numbers with "a grain of
salt." We do accept those numbers in that vein. We see
no need to engage in a lengthy discussion about the
Nielsen methodology in light of the fact that we accept
these numbers merely as a reference point and not as an
absolute value. Also, in addition to being unable to
quantify their various criticisms, the claimants who dis-
pute the Nielsen survey's accuracy present no alternative
evidence as to viewing.
The next question is, what do these numbers reveal
about market value? Program Suppliers acknowledge
__________
22 We reject any suggestion by NAB that the Panel was obligated
to correct the Nielsen figures simply because the Tribunal had
undertaken such a task in the past. Just as the Panel was
authorized to dispense with the harm criterion because it found the
criterion unhelpful, it was not required to follow the Tribunal's lead
on the miscategorization errors given its assessment of the impreci-
sion of the evidence. See supra discussion, Part III.A(2).
that the Nielsen study does not measure value; rather, it
measures tuning. Program Suppliers point out they did
not ask Nielsen to interpret what the results meant, but
left that to the other witnesses and the evidence. Pro-
gram Suppliers agree that the Nielsen figures are not
the sole determinant of market value.
Panel Report at 43; cf. NCT, 724 F.2d at 187 ("In sum, the
Tribunal sought to estimate a market price in the absence of
a functioning market. It used the best, indeed, the only,
analogies available to it. It could not mathematically derive
its ultimate decision. Inevitably, it used its expert judgment
to make a 'best guess'; we are not positioned to offer a better
one."). We believe this judgment to be an eminently reason-
able one and it is far from the type of disconnect between the
evidence and the award that could warrant our intervention
under the "arbitrary manner" standard of subsection 802(g).
Cf. Association of Am. Publishers, Inc. v. Governors of
United States Postal Serv., 485 F.2d 768, 773 (D.C. Cir. 1973)
("It would, of course, be the summum bonum if we had
accurate figures as to recent costs of carrying special fourth
class mail. The only available figures were inaccurate, but
were susceptible of rough adjustment. The Postal Service
proposed one method of adjustment; the Chief Examiner,
another. So the Commission more or less split the differ-
ence. No doubt it would have been possible to straighten out
some of the errors or supposed errors of adjustment in either
the Postal Service's or the Chief Examiner's calculations.
And if rate-making [or royalty distribution] were an exact
science such a counsel of perfection would be mandatory.
But, though courts hesitate to so admit, they know that in the
rate-making area, John Selden was prophetic in declaring
that in governing it is not juggling, but too much juggling
that is to be blamed.").
IV. CONCLUSION
In summary, we conclude that the Copyright Tribunal
Reform Act of 1993 significantly narrowed the standard of
review applicable to the Librarian's apportionment of cable
royalties. Under the applicable standard, we find nothing in
any of the petitioners' claims that warrants modification or
remand of the Librarian's Phase I awards. Accordingly, the
petitions for review of the decision of the Librarian, as
reported in Distribution of 1990, 1991 and 1992 Cable Royal-
ties, 61 Fed. Reg. 55,653 (1996), are
Denied.
Natl Assn Bcaster v. Librarian Cong
Court: Court of Appeals for the D.C. Circuit
Date filed: 1998-06-26
Citations: 146 F.3d 907
Copy Citations