DC Circuit Judges Skeptical of Indie Producers on CRB MVPD Royalties Distribution
Federal appellate judges were skeptical Wednesday of math the Independent Producers Group used to assert an arbitrary and capricious Copyright Royalty Board decision cost video content producers $28 million in MVPD retransmission royalties. Appellant counsel and appellee intervenor counsel told us the U.S. Court of Appeals for the D.C. Circuit could rule in a month or two. They said IPG challenging a CRB 2019 order on distribution of cable and satellite royalties (docket 18-1337) doesn't have broader copyright royalty implications.
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D.C. Circuit Judges Laurence Silberman and Cornelia Pillard said IPG claims that $28 million amount, but no clear evidence in the record backs that figure. IPG counsel Brian Boydston of Pick & Boydston said, "I hate to say the word [but] it's somewhat buried in the thousands of pages" of documentation about where programs were retransmitted that have been submitted to the court. He said the $28 million sanction came out of the total $56 million royalty pool and is based on number of hours of programming. The figure is "entirely speculative" and no evidence in the record backs it up, replied DOJ Civil Division lawyer Martin Totaro, representing appellees CRB and the Library of Congress.
Judges and IPG counsel disagreed whether the CRB had options other than the millions of dollars in financial sanctions for a discovery violation after an email wasn't produced. Boydston was pressed repeatedly on what alternatives CRB judges had aside from eliminating almost all IPG royalty claims as a sanction. He said CRB judges could have limited the sanction to one royalty pool, instead of 17, or a smaller reduction, such as by 10%. "It's difficult to think" of an alternative, and IPG didn't suggest one, Totaro said. Pressed by Judge Thomas Griffith about the alternatives Boydston suggested, Totaro said a tailored sanction is "something judges could have considered," but royalty judges are presented with limited actions when considering sanctions.
Boydston said even though CRB "eviscerated" his client's royalty claims for not producing the email, it wasn't responsive to any discovery request. He said opposing counsel had that email in files from an earlier presentation. Whether the document is in possession of the other side isn't material to whether IPG abrogated its obligation to turn it over, Silberman said. He questioned what the scope of the D.C. Circuit's review, asking why the court shouldn't defer to the CRB, especially since the court traditionally gives bigger deference to an agency's determination than to a district court decision where there's a broader scope of review. Boydston said it's an abuse of discretion issue when rulings are arbitrary and capricious, as in this case.
CRB doesn't do subpoenas or interrogatories, and documentation is the basis of its decision-making, which is why discovery is so important, Totaro said. He said IPG, when asked about the email not turned over, "didn't say it slipped through the cracks" but instead said it wasn't sure if it had the document in its records and didn't look for it after there was a move for sanctions.
Silberman asked Totaro if the three companies IPG said it represented and whose claims were struck would have a cause of action against IPG. Totaro said the CRB takes no position on that. Concluded Silberman, "It's entirely possible."