797 F.3d 1106
D.C. Cir.2015Background
- Cable operators paid compulsory royalties for retransmission of broadcast devotional (religious) TV for 2000–2003; the Copyright Royalty Judges (CRJs) must allocate those funds among claimants in Phase II proceedings.
- Two claimants contested the devotional pool: the Settling Devotional Claimants (23 religious ministries, who claimed 100%) and Intervenor Independent Producers Group (IPG), which claimed substantial shares using a proprietary methodology.
- CRJs held preliminary proceedings on representational authority; IPG was allowed to represent four contested claimants (including Billy Graham for some years) based on documentary and corroborating evidence.
- The Devotional Claimants proposed a viewership-based valuation late (rebuttal) via witnesses Whitt and Dr. Brown; the CRJs excluded Whitt’s testimony as untimely and admitted only portions of Brown’s rebuttal (stripped of Whitt’s data).
- The CRJs rejected both parties’ full methodologies as unreliable, then nonetheless allocated percentages by (a) adopting IPG’s numbers for years where IPG’s figures overlapped or approximated the Devotional Claimants’ range, and (b) averaging other years — an approach the D.C. Circuit found unsupported and arbitrary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IPG had authority to represent certain claimants | Devotional Claimants: IPG lacked timely written authorization and needed live confirmation | Government/IPG: written agreements and correspondence plus later reconfirmation suffice | CRJs’ rulings sustained; substantial evidence supported IPG’s authority for the four challenged claimants |
| Whether CRJs properly excluded Devotional Claimants’ rebuttal methodological evidence | Devotional Claimants: Whitt/related evidence was unforeseeable and necessary to apply methodology | CRJs/IPG: regulations required all testimony in written direct statements; late disclosure prejudiced IPG | Exclusion upheld; CRJs reasonably applied 37 C.F.R. §351.4 and rejected trial-by-ambush evidence |
| Whether CRJs could rely on Dr. Brown’s admitted rebuttal testimony without Whitt’s data | Devotional Claimants: Brown’s opinion still should inform allocation | CRJs/IPG: Brown’s opinion depended on excluded Whitt data; admitted portions lacked foundation | CRJs appropriately gave Brown’s stripped testimony no weight; rejection was reasonable |
| Whether CRJs’ final allocation (adopting/averaging rejected proposals) was lawful | Devotional Claimants: allocation arbitrary, unsupported by record and methodology | CRJs/Government: needed to decide with existing record; overlap/near-overlap justified chosen numbers | Allocation vacated: court held the Solomonic split/averaging was arbitrary and capricious and unsupported by substantial evidence |
Key Cases Cited
- Intercollegiate Broadcast Sys., Inc. v. Copyright Royalty Board, 571 F.3d 69 (D.C. Cir.) (administrative decisions must be supported by substantial evidence)
- Christian Broadcasting Network, Inc. v. Copyright Royalty Tribunal, 720 F.2d 1295 (D.C. Cir.) (royalty allocations reviewable for "zone of reasonableness")
- National Broadcasting Co. v. Copyright Royalty Tribunal, 848 F.2d 1289 (D.C. Cir.) (Royalty Judges cannot adjudicate copyright ownership but may resolve allocation questions with deference)
- Decker v. Northwest Envtl. Defense Ctr., 133 S. Ct. 1326 (2013) (agency interpretations of their own regulations receive deference unless plainly erroneous)
- National Ass'n of Broadcasters v. Copyright Royalty Tribunal, 675 F.2d 367 (D.C. Cir.) (agencies have latitude but must supply reasoned explanations)
- National Cable Television Ass'n v. Copyright Royalty Tribunal, 724 F.2d 176 (D.C. Cir.) (administrative allocations may be upheld on "rough justice" if grounded in credible methodology)