Federal Register Notice

[Federal Register: February 12, 1997 (Volume 62, Number 29)]
[Notices]
[Page 6558-6562]

-----------------------------------------------------------------------

LIBRARY OF CONGRESS

Distribution of the 1992, 1993, and 1994 Musical Works Funds

AGENCY: Copyright Office, Library of Congress.

ACTION: Distribution order.

-----------------------------------------------------------------------

SUMMARY: The Librarian of Congress, upon recommendation of the Register
of Copyrights, is announcing the distribution of the royalty fees
collected for Digital Audio Recording Devices and Media (DART) in the
1992, 1993, and the 1994 Musical Works Funds. The Librarian is adopting
in part and rejecting in part the decision of the Copyright Arbitration
Royalty Panel (CARP).

EFFECTIVE DATE: The distribution percentages announced in this Order
are effective on February 12, 1997.

ADDRESSES: The full text of the CARP's report to the Librarian of
Congress is available for inspection and copying during normal business
hours in the Office of the General Counsel, James Madison Memorial
Building, Room LM-407, First and Independence Avenue, S.E., Washington,
DC. 20540.

FOR FURTHER INFORMATION CONTACT: William Roberts, Senior Attorney, or
Tanya M. Sandros, Attorney-Advisor, P.O. Box 70977, Southwest Station,
Washington, D.C. 20024. Telephone (202) 707-8380.

SUPPLEMENTARY INFORMATION:

I. Recommendation of the Register of Copyrights

Background

On October 28, 1992, Congress enacted the Audio Home Recording Act,
Pubic Law No. 102-563 (1992). This Act requires manufacturers and
importers to pay royalties on digital audio recording devices and media
(DART) that are distributed in the United States. The royalties are
collected by the Copyright Office and deposited with the Treasury of
the United States. 17 U.S.C. 1005. These funds are distributed by the
Copyright Office to interested copyright parties who filed claims with
the Copyright Office each year during January and February pursuant to
either a universal settlement negotiated by the claimants to a
particular subfund, or by Order of the Librarian of Congress
(Librarian) following a distribution proceeding conducted by a
Copyright Arbitration Royalty Panel (CARP).
The Act provides that the royalties are to be divided into two
funds: the Sound Recordings Fund, which accounts for 66\2/3\% of the
royalties, and the Musical Works Fund, which accounts for the remaining
33\1/3\% of the royalties. The Act further divides each fund into
subfunds.
The Sound Recordings Fund consists of four subfunds, two of which,
the Nonfeatured Musicians Subfund and the Nonfeatured Vocalists
Subfund, account for 2\5/8\% and 1\3/8\%, respectively, of the Sound
Recordings Fund and are administered by an independent administrator.
The remaining 96% of the Sound Recordings Fund is further distributed
between two additional subfunds, the Featured Recording Artist Subfund
and the Sound Recording Owners Subfund, which receive 40% and 60%,
respectively, of the remaining 96% share of the fund. The Musical Works
Fund consists of two subfunds, the Publishers Subfund and the Writers
Subfund, each of which receives 50% of that Fund. 17 U.S.C. 1006(b).
Thus, the Act establishes the percentages for each fund and
subfund, but directs the CARPs, when necessary, to determine what
amount each claimant within a subfund is entitled to receive. The
determination and a full explanation underlying the conclusions are set
out in a written report to the Librarian.

Distribution of Royalties

Royalties are collected on a quarterly basis from any importer or
manufacturer that distributes any digital audio recording device or
digital audio recording medium that it manufactured in or imported into
the United States. 17 U.S.C. 1003(c). As discussed above, these
royalties are collected by the Copyright Office and invested in
interest-bearing securities with the United States Treasury for
subsequent distribution to interested copyright parties. 17 U.S.C.
1005.
An interested copyright party must submit each year a written claim
to the Copyright Office during the months of January and February. 17
U.S.C. 1007(a). Within 30 days after the last day for filing claims,
the statute instructs the Librarian to ascertain whether there are any
controversies among the claimants as to the proper distribution of the
royalties in their fund/subfund. If there are no controversies, the
Librarian authorizes the distribution of the funds according to the
terms of the negotiated agreements; otherwise, the Librarian is
directed to convene a CARP or CARPs to decide the proper distribution
of the royalties in each unresolved fund/subfund. 17 U.S.C. 1007(b)(c).

This Proceeding

The parties in this proceeding are Broadcast Music, Inc., the
American Society of Composers, Authors, and Publishers, SESAC, Inc.,
the Harry Fox Agency, Inc. (a subsidiary of the National Music
Publishers' Association, Inc.), Copyright Management Inc., The
Songwriters Guild of America, and the Gospel Music Coalition
(collectively, the ``Settling Parties''), and two pro se claimants,
Eugene Curry and Alicia Carolyn Evelyn. Ms. Evelyn and Mr. Curry, both
songwriters, chose to represent their own interests in the proceeding.
Mr. Curry also represented the publishing interest of Tajai Music, Inc.
(Tajai) for the three years in dispute. The Settling Parties represent
the over 264,000 remaining publishers and songwriters with a claim to a
share of the royalties. Settling Parties Direct Case at 2-3.
The CARP in this proceeding was convened to determine the
distribution of the royalties in the 1992, 1993, and 1994 Musical Works
Funds, which totaled approximately $355,500.00.\1\ The Copyright Office
received forty-one claims to the 1992 Musical Works Fund--twenty-one
claims to the Writers Subfund and twenty claims to the Publishers
Subfund. During the next filing cycle, the Office received twenty-two
claims to the 1993 Musical Works Fund--twelve claims to the Writers
Subfund and ten claims to the Publishers Subfund. In 1995, the Office
received twenty-six claims to the 1994 Musical Works Fund, equally
divided between the two subfunds.
---------------------------------------------------------------------------

\1\ Claimants to the royalties in the Sound Recordings Fund for
1992, 1993, and 1994 negotiated a settlement amongst themselves. The
Library has made a full distribution of these funds to the
interested copyright parties who filed timely claims for a share of
these royalties. See Order, Docket No. 94-2 CARP-DD (December 15,
1994) and Order in Docket No. 95-1 CARP DD 92-94 (May 16, 1995).
---------------------------------------------------------------------------

This proceeding for the determination of the distribution of the
DART royalties commenced on November 3, 1993, when the Settling Parties
filed a motion with the Copyright Royalty Tribunal (Tribunal) \2\ to
consolidate the 1992 and

[[Page 6559]]

1993 DART distribution proceedings. The CRT granted this motion on
November 29, 1993, see Order, In the Matter of 1992 Audio Home
Recording Act Distribution Proceeding, CRT Docket No. 93-1-92DRD (Nov.
29, 1993), but further proceedings were suspended upon the abolition of
the CRT.
---------------------------------------------------------------------------

\2\ When the Audio Home Recording Act was passed, the Copyright
Royalty Tribunal had the authority to conduct the DART distribution
proceedings. The Tribunal, however, was abolished by Congress in
1993, and the authority to distribute DART funds was given to the
CARPS, as administered by the Librarian of Congress. See the
Copyright Royalty Tribunal Reform Act of 1993, Pubic Law No. 103-
198.
---------------------------------------------------------------------------

The Copyright Office instituted a new proceeding for the
distribution of 1992 and 1993 DART royalties on March 1, 1994. 59 FR
9773 (March 1, 1994). In response to this notice, the Settling Parties
and other claimants filed a motion with the Office requesting the
Office to consolidate the 1992, 1993, and 1994 DART distribution
proceedings. The Office granted this request and announced that it
would set a schedule for a DART distribution proceeding in 1995. 59 FR
35762 (July 13, 1994).
On February 23, 1995, the Office published a notice requesting
comments as to the existence of controversies in the consolidated
proceeding, and notices of intent to participate. 60 FR 12251 (March 6,
1995). Twelve parties filed notices of intent to participate in this
proceeding, including the Settling Parties, Ms. Evelyn, Mr. Curry and
the publishing company he represents, Tajai.
Through a series of motions to dismiss certain parties and as a
result of continued negotiations, nine parties remained in the DART
distribution proceeding when the Librarian initiated a CARP to
determine the distribution of the Musical Works Fund royalties for
1992, 1993, and 1994. 61 FR 40464 (August 2, 1996).
On October 4, 1996, the Parties met with the Panel which
determined, for good cause shown, to proceed on the basis of the
written pleadings alone.\3\ CARP Order, Docket No. 95-1 CARP DD 92-94
(October 4, 1996). Accordingly, the CARP instructed the parties to file
their respective proposed findings of fact and conclusions of law by
November 4, 1996, and to file reply findings on or before November 14,
1996. The Panel limited the proposed findings of fact to the material
contained in the written direct cases previously filed on March 25,
1996. Transcript of October 4, 1996 Meeting at 33-35.
---------------------------------------------------------------------------

\3\ On June 14, 1996, the Settling Parties filed a motion to
dispense with formal hearings and to conduct this proceeding on the
basis of the written pleadings. The Librarian denied the motion, but
designated the issue to the CARP for further consideration under
their authority to suspend or waive the relevant provision of the
regulations. Order, Docket No. 95-1 CARP DD 92-94 (July 25, 1996).
---------------------------------------------------------------------------

On December 16, 1996, the chairperson of the CARP delivered the
Panel's written report to the Librarian.

The CARP Report

The Panel, after reviewing the written record, determined that the
royalties in the 1992, 1993, and 1994 Musical Works Funds should be
allocated as follows:
To Mr. Curry: 0.007096% of both the Writers and Publishers Subfunds
in 1992; 0.001608% of both the Writers and Publishers Subfunds in 1993;
and 0.003398% of both the Writers and Publishers Subfunds in 1994.
To Ms. Evelyn: 0.000084% of only the Writers Subfund in 1993; and
0.000082% of only the Writers Subfund in 1994.
To the Settling Parties: 99.992904% of both the Writers and
Publishers Subfunds in 1992; 99.998308% of the Writers Subfund and
99.998392% of the Publishers Subfund in 1993; and 99.99652% of the
Writers Subfund and 99.996602% of the Publishers Subfund in 1994. CARP
Report, paras. 71-73.
The Panel utilized the only formula presented for calculating a
claimant's share of the royalties. CARP Report, para. 53. The formula
determines each claimants' proportionate share of the royalties as a
percentage of the total song titles sold during a particular year based
on evidence of a claimants' total song title sales for that year. Id.

Standard of Review

The Copyright Royalty Tribunal Reform Act of 1993 created a unique
system of review of a CARP's determination. Typically, an arbitrator's
decision is not reviewable, but the Reform Act created two layers of
review: The Librarian of Congress, and the Court of Appeals for the
District of Columbia Circuit. Section 802(f) of the Copyright Act
directs the Librarian to either accept the decision of the CARP or
reject it. If the Librarian rejects it, he must substitute his own
determination ``after full examination of the record created in the
arbitration proceeding.'' Id. If the Librarian accepts it, then the
determination of the CARP has become the determination of the
Librarian. In either case, through issuance of the Librarian's Order,
it is his decision that is subject to review by the Court of Appeals.
Section 802(f) of the Copyright Act directs that the Librarian
shall adopt the report of the CARP ``unless the Librarian finds that
the determination is arbitrary or contrary to the provisions of this
title.'' Neither the Reform 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 from the
``arbitrary'' standard described in the Administrative Procedure Act, 5
U.S.C. 706(2)(A).
Review of the case law applying the APA ``arbitrary'' standard
reveals six factors or circumstances under which a court is likely to
find that an agency acted arbitrarily. An agency is generally
considered to be arbitrary when it:

(1) Relies on factors that Congress did not intend it to
consider;
(2) fails to consider entirely an important aspect of the
problem that it was solving;
(3) Offers an explanation for its decision that runs counter to
the evidence presented before it;
(4) Issues a decision that is so implausible that it cannot be
explained as a product of agency expertise or a difference of
viewpoint;
(5) Fails to examine the data and articulate a satisfactory
explanation for its action including a rational connection between
the facts found and the choice made; or
(6) When the agency's action entails the unexplained
discrimination or disparate treatment of similarly situated parties.

Motor Vehicle Manufacturers Association v. State Farm Mutual Insurance
Co., 463 U.S. 29 (1983); Celcom Communications Corp. v. FCC, 789 F.2d
67 (D.C. Cir. 1986); Airmark Corp. v. FAA, 758 F.2d 685 (D.C. Cir.
1985).
Given these guidelines for determining when a decision is
``arbitrary,'' prior decisions of the Court of Appeals for the District
of Columbia Circuit reviewing the determinations of the former
Copyright Royalty Tribunal (Tribunal) have been consulted. The
decisions of the Tribunal were reviewed under the ``arbitrary and
capricious'' standard of 5 U.S.C. 706(2)(A) which, as noted above,
appears to be applicable to the Librarian's review of the CARP's
decision.
Review of judicial decisions regarding Tribunal actions reveals a
consistent theme: while the Tribunal was granted a relatively wide
``zone of reasonableness,'' it was required to articulate clearly the
rationale for its decision. See National Association of Broadcasters v.
CRT, 772 F.2d 922 (D.C. Cir. 1985); Christian Broadcasting Network v.
CRT, 720 F.2d 1295 (D.C. Cir. 1983); National Cable Television
Association v. CRT, 689 F.2d 1077 (D.C. Cir. 1982); Recording Industry
Association of America v. CRT, 662 F.2d 1 (D.C. Cir. 1981). As one

panel of the D.C. Circuit succinctly noted:

We wish to emphasize * * * that precisely because of the
technical and discretionary nature of the Tribunal's work, we must

[[Page 6560]]

especially insist that it weigh all the relevant considerations and
that it set out its conclusions in a form that permits us to
determine whether it has exercised its responsibilities lawfully * *
*.

Christian Broadcasting Network, Inc. v. CRT, 720 F.2d 1295, 1319 (D.C.
Cir. 1983), quoting National Cable Television Association v. CRT, 689
F.2d 1077, 1091 (D.C. Cir. 1982).
Because the Librarian is reviewing the CARP decision under the same
``arbitrary'' standard used by the courts to review the Tribunal's
decisions, he must be presented by the CARP with a detailed rational
analysis of its decision, setting forth specific findings of fact and
conclusions of law. This requirement of every CARP report is confirmed
by the legislative history to the Reform Act which notes that a ``clear
report setting forth the panel's reasoning and findings will greatly
assist the Librarian of Congress.'' H.R. Rep. No. 286, 103d Cong., 1st
Sess. 13 (1993). Thus, to engage in reasoned decisionmaking, the CARP
must ``weigh all the relevant considerations and * * * set out its
conclusions in a form that permits [a determination of] whether it has
exercised its responsibilities lawfully.'' National Cable Television
Association v. CRT, 689 F.2d 1077, 1091 (D.C. Cir. 1982). This goal
cannot be reached by ``attempt[ing] to distinguish apparently
inconsistent awards with simple, undifferentiated allusions to a 10,000
page record.'' Christian Broadcasting Network, Inc. v. CRT, 720 F.2d
1295, 1319 (D.C. Cir. 1983).
It is the task of the Register of Copyrights to review the CARP
report and make her recommendation to the Librarian as to whether the
report is arbitrary or contrary to the provisions of the Copyright Act
and, if so, whether, and in what manner, the Librarian should
substitute his own determination.

Petitions To Set Aside the Panel's Determination

On January 2, 1997, and on January 3, 1997, the two pro se parties
filed their petitions with the Librarian to modify and/or set aside the
decision of the CARP, along with motions requesting leave to file the
petitions late. See 37 CFR 251.55(a). The Office accepted the late
filings and issued an order requesting that any replies to the
petitions be filed with the Office no later than January 17, 1997.
Order, Docket No. 95-1 CARP DD 92-94 (January 3, 1997). The purpose of
the petitions to modify or set aside the Panel's determination is to
identify aspects of the Panel's report which are arbitrary with respect
to record evidence or contrary to the applicable statutory provisions.
In her petition, Ms. Alicia Evelyn enumerated an array of reasons
to set aside the determination of the CARP in this proceeding, stating
that ``[t]he panel, in its report, failed to address matters in
controversy * * *.'' Petition to Set Aside the Determination of the
Copyright Arbitration Royalty Panel in the Above-Referenced Matter
Submitted by Alicia Carolyn Evelyn, Individual, Pro Se, Claimant
(Evelyn Petition) at 2. The purported controversies which the CARP
failed to address include: (1) Failure on the part of the Settling
Parties to identify their DART eligible associates and members and at
least one DART eligible title for the 1992-94 period, Id. at 2; (2)
failure on the part of the Settling Parties to provide data to
individual claimants pertaining to their DART eligible songs,
including, but not limited to the songs ``I'm Counting on You'' and ``I
Thank You,'' Id. at 3; (3) selection of SoundScan to determine the
extent of record sales rather than use of performance data, Id. at 7;
(4) use by Mr. Michael Fine <SUP>4, expert witness for the Settling
Parties, of an incomplete list of DART eligible songs when evaluating
SoundScan data for record sales of Ms. Evelyn, Id. at 7; (5)
unexplained use of total record sales, as reported by SoundScan, for
1992, rather than record sales for the relevant period, October 28,
1992--December 31, 1992, and concomitant use of total record sales for
the claimant during this same period, Id. at 7-8; (6) failure to
include record club sales and/or computer sales in the calculations for
total record sales, Id. at 8; and (7) failure on the part of certain
Settling Parties to fulfill their fiduciary obligations toward their
members. Id. at 9-10.
---------------------------------------------------------------------------

\4\ Mr. Fine is the Chief Executive Officer of SoundScan, Inc.
Witness Affidavit, Settling Parties' Direct Case.
---------------------------------------------------------------------------

Whereas Ms. Evelyn's petition stated her concerns with certain
particularity, Mr. Curry's petition to set aside the panel's
determination rests primarily on a fundamental assertion that the
Settling Parties never proved their case. Petition to Set Aside the
Determination of the Arbitration Royalty Panel, submitted by Eugene
Curry (Curry Petition), at 1. Mr. Curry argues that he had to submit
specific titles of his works and documentation of record sales whereas
the Settling Parties produced no hard numbers for the record sales of
any claimant represented by the Settling Parties. Id. at 2,3,4. Curry
further argues that it was error for Ms. Smith <SUP>5 to supply Mr.
Fine with authorship data and not present any data on the number of
disseminations of his works through transmissions, i.e. radio play, id.
at 2, implying that the Panel failed to properly apply the statutory
criteria for making its determination. Additionally, Mr. Curry submits
that he supplied the Settling Parties with documentation of record club
sales in support of his argument that SoundScan was not the only source
of record sales data, nor the best source, but this information was not
utilized in the final report to adjust the sales figures. Id. at 4.
---------------------------------------------------------------------------

\5\ Ms. Smith is Vice President of Performing Rights of
Broadcast Music, Inc. Witness Affidavit, Settling Parties' Direct
Case.
---------------------------------------------------------------------------

In reply, the Settling Parties request that the Librarian deny Ms.
Evelyn's and Mr. Curry's petitions on both procedural and substantive
grounds. The Settling Parties contend that the Panel's report was not
arbitrary or contrary to the law, when analyzed under the applicable
standard of review, and therefore, should be adopted as filed by the
Librarian. Furthermore, the Settling Parties oppose the Evelyn and
Curry petitions because each petition failed to reference applicable
sections of the party's proposed findings of fact and conclusions of
law. See 37 CFR 251.55(a).

Sufficiency of Ms. Evelyn's and Mr. Curry's Petitions To Modify

Before the Register can address the issues raised by Ms. Evelyn's
and Mr. Curry's petitions to modify the determination of the Panel, the
Register must first address the contention raised by the Settling
Parties that the petitions must be dismissed for failure to comply with
section 251.55(a) of the CARP rules. That section provides that each
petition must ``state the reasons for modification or reversal of the
panel's determination, and shall include applicable sections of the
party's proposed findings of fact and conclusions of law.'' 37 CFR
251.55(a).
Review of Ms. Evelyn's and Mr. Curry's petitions reveals that
neither comply with the second part of the rule which requires
identification of applicable portions of a petitioner's proposed
findings of fact and conclusions of law. The purpose of this
requirement is to enable the Register, and the Librarian, to locate
those portions of the testimony that support each party's petition.
However, absent a showing of bad faith, the remedy for failure to
comply with the requirement is not dismissal of a party's petition to
modify. Rather, the remedy is for the Register to direct the offending
party to amend his or her petition to include identification of the
applicable portions of their proposed findings of fact and conclusions
of law. This approach,

[[Page 6561]]

however, is not necessary in this proceeding because the record is
relatively small. Therefore, Ms. Evelyn's and Mr. Curry's petitions to
modify were accepted.

Review of the CARP Report

In reviewing the determination of a CARP, the Register is required
to confine her consideration to the record of the proceeding. 17 U.S.C.
802(f). The record in this proceeding consists solely of the written
direct cases of the Settling Parties, Ms. Evelyn, and Mr. Curry.
Consequently, despite the protestations of Ms. Evelyn and Mr. Curry,
the Register will not address issues raised in their petitions to
modify which go beyond the evidence presented in the written direct
cases.
The Register's review is in three parts: (1) An analysis of the
statutory criteria to be used in the current proceeding; (2) an
analysis of the methodology adopted by the Panel to implement the
statutory criteria; and (3) an analysis of the application of the
adopted methodology to the record evidence.
1. Statutory criteria. The Audio Home Recording Act of 1992 clearly
delineates the statutory criteria to be considered when making a
distribution of DART royalties. Specifically, a CARP may only consider
``the extent to which, during the relevant period * * * each musical
work was distributed in the form of digital musical recordings or
analog musical recordings or disseminated to the public in
transmissions.'' 17 U.S.C. 1006(c)(2). While a CARP is limited to these
two statutory criteria in determining a DART royalty distribution, the
statute does not require the application of both criteria. Thus, in
circumstances where the parties to a DART distribution have presented
evidence as to only one of the criteria, there is no requirement that a
CARP request evidence as to the second criteria as well.
In this proceeding, the parties presented credible evidence only as
to the distribution criteria (record sales).<SUP>6 The Register
concludes that the Panel acted properly in basing its determination
solely on the evidence of record sales, and was not required to take
record evidence as to the dissemination of musical works in
transmissions when no such evidence was submitted by the parties.
Further, the Register determines that the Panel acted properly by
refusing to consider evidence presented by Ms. Evelyn and Mr. Curry
that was not relevant to the section 1006(c)(2) criteria. See, CARP
Report, para. 52.
---------------------------------------------------------------------------

\6\ The Panel found that while the Settling Parties and Mr.
Curry did not present any evidence of performances, the evidence
presented by Ms. Evelyn as to performances of her works was not
competent. Report, paras. 46-47. After reviewing the record, the
Register concludes that this determination by the Panel was not
arbitrary.
---------------------------------------------------------------------------

2. Methodology. The Settling Parties presented the only systematic
method for determining the distribution of the royalties in the Musical
Works Funds. The formula divided the total song title sales credited to
a claimant during a particular year by the total song titles sold
during the same year. This calculation determines the claimant's
proportionate share of the royalties for that period of time. The Panel
found this formulation acceptable for making its determination because
it allows each claimant to receive credit for actual sales during the
relevant period. CARP Report, para. 54. Additionally, the Panel noted
that Ms. Evelyn and Mr. Curry failed to propose any alternative
systematic method or formula for calculating a claimant's share of the
royalties. CARP Report, paras. 40 and 48.
Although neither Ms. Evelyn nor Mr. Curry challenge the Settling
Parties' formula for determining each claimant's share of the
royalties, Mr. Curry does challenge application of the formula solely
to himself and Ms. Evelyn,--that is, not the Settling Parties. The
Register concludes that the Panel did not act arbitrarily by using the
formula to determine Mr. Curry's and Ms. Evelyn's proportionate share
of the royalties from actual sales data. First, the Panel found that
the Settling Parties represent all claims except those of Mr. Curry and
Ms. Evelyn. CARP Report, paras. 36 and 37. Second, based on this
finding and application of the simple mathematical concept that the sum
of the parts must equal the whole, the Panel accepted the presentation
of evidence for the two individual claimants' share of the royalties
and deducted this sum from 100% to determine the Settling Parties'
share of the royalties. CARP Report, para. 69. Such an approach is
logical and consistent and was fully within the discretion of the
Panel.
Ms. Evelyn raises a second challenge to the methodology utilized by
the Panel. Specifically, she challenges the fact that the Panel
considered the total sales figures for 1992, rather than only those
sales which occurred during the time period that the Audio Home
Recording Act was in effect (October 28, 1992 to December 31, 1992).
The Register determines that this challenge is not fatal to the Panel's
action. First, Ms. Evelyn did not file a claim to DART royalties for
1992, and her distribution is not affected by the Panel's determination
for 1992. Second, there is no evidence in the record that suggests that
the Panel could have ascertained the universe of record sales, and the
sales of Mr. Curry, for the period from October 28, 1992, through
December 31, 1992. Nevertheless, the Panel determined Mr. Curry's
percentage claim from the annual sales data under an apparent
assumption that record sales occurred at the same rate throughout 1992.
A careful review of the record reveals no evidence suggesting that the
rate of record sales during the effective period of the Audio Home
Recording Act was statistically different from the rate of sales
throughout the remainder of the calendar year. Consequently, the
Register finds the Panel's use of the annual sales figures not
arbitrary, although evidence of record sales from this period would
have provided the ideal precision for application of the formula. See,
National Association of Broadcasters v. Copyright Royalty Tribunal, 675
F.2d 367, 379 n.10 (D.C. Cir. 1982) (Tribunal's findings acceptable
``though of less than ideal clarity,'' so long as ``the path which the
agency follows can reasonably be discerned.'').
3. Application of Methodology to Record Evidence. The Register
finds that the Panel did act arbitrarily in determining Mr. Curry's
<SUP>7 share of the 1992, 1993, and 1994 Publishers Subfunds. The Panel
erred by determining that Mr. Curry, as writer, and Mr. Curry, as
publisher, were to receive the same award.
---------------------------------------------------------------------------

\7\ In his capacity as sole representative of Tajai Music, Inc.,
Mr. Curry filed claims to the 1992, 1993, and 1994 Publishers
Subfunds.
---------------------------------------------------------------------------

In determining Mr. Curry's record sales for the Writers Subfunds,
the Panel prorated his sales based on his percentage contribution as
author to each musical work. For example, the Panel accorded Mr. Curry
credit for one-half, 50%, of the total record sales for the musical
work ``Burnin'' because he was the co-author of the work. CARP Report,
para. 34. While this approach is appropriate in determining Mr. Curry's
share of the Writers Subfunds, it is contrary to the evidence in
determining his sh
are of the Publishers Subfunds. There is no evidence
in the record which demonstrates that Mr. Curry was entitled to
anything less than a one hundred percent publishing interest from the
sales of the musical works credited to him by the Panel for the
Publishers Subfunds. The Register is, therefore, recommending that Mr.
Curry's award for the 1992-1994 Publishers Subfunds be adjusted to
reflect a one hundred percent

[[Page 6562]]

publishing interest for Mr. Curry as sole representative of Tajai.
One final point raised by Mr. Curry and Ms. Evelyn concerns the use
of SoundScan as the definitive source of record sales data. The Report,
however, clearly indicates that the Panel did consider evidence
submitted by Mr. Curry regarding sales through record companies, and
that after due consideration, the Panel rejected the evidence because
he failed to provide the universe of record sales for these companies
during the relevant time. CARP Report, para. 40. The Panel's decision
to reject the record sales data submitted by Mr. Curry and rely upon
the SoundScan data was not arbitrary.
Similarly, Ms. Evelyn's contention that the Settling Parties failed
to provide additional data concerning additional DART eligible songs is
without merit. The Panel carefully analyzed her direct case and found
no credible evidence of sales or performances in the U.S. during the
relevant period, CARP Report, paras. 41-48; the Panel did credit her
with sales of musical works introduced by the Settling Parties. CARP
Report, para. 35. Furthermore, the Register notes that the evidence
presented by the Settling Parties, and adopted by the Panel, for record
sales of Ms. Evelyn and Mr. Curry credit them both with greater sales
than the evidence they presented in their written direct cases, thereby
increasing the size of their respective awards. CARP Report, para. 62
and 64.
As discussed earlier in this Order, the Librarian's scope of review
is very narrow. The limited scope certainly does not extend to
reconsideration of the relative weight to be accorded particular
evidence, and the Librarian cannot second guess a CARP's balance and
consideration of the evidence, unless it runs counter to the evidence
presented to it. Motor Vehicle Manufacturers Association v. State Farm
Mutual Auto Insurance Co., 463 U.S. 29, 43 (1983).

Conclusion

For the above stated reasons, the Register recommends that the
following should be the percentages for the distribution of the
royalties in the 1992, 1993, and 1994 Musical Works Funds:

--------------------------------------------------------------------------------------------------------------------------------------------------------
1992 1993 1994
-----------------------------------------------------------------------------------------------
Writers Publishers Writers Publishers Writers Publishers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Curry................................................... 00.007096 00.014745 00.001608 00.003802 00.003398 00.007066
Evelyn.................................................. NA NA 00.000084 NA 00.000082 NA
Settling Parties........................................ 99.992904 99.985255 99.998308 99.996198 99.99652 99.992934
-----------------------------------------------------------------------------------------------
Total............................................. 100.00 100.00 100.00 100.00 100.00 100.00
--------------------------------------------------------------------------------------------------------------------------------------------------------

II. Order of the Librarian of Congress

Having duly considered the recommendation of the Register of
Copyrights regarding the report of the Copyright Arbitration Royalty
Panel in the distribution of the 1992-1994 Musical Works Funds, the
Librarian of Congress fully endorses and adopts her recommendation 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. 802(f) and is issuing an order
setting the distribution of the royalties in the 1992-1994 Musical
Works Funds.
Wherefore, it is ordered that the royalties in the 1992-1994
Musical Works Funds shall be distributed according to the following
percentages:

As provided in 17 U.S.C. 802(g), the period for appealing this
Order to the United States Court of Appeals for the District of
Columbia is 30 days from the effective date of this Order.

Dated: February 3, 1997.
Marybeth Peters,
Register of Copyrights.
Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 97-3316 Filed 2-11-97; 8:45 am]

***3/6/97***