[Federal Register: February 7, 2001 (Volume 66, Number 26)]


[Page 9360-9365]



Copyright Office

[Docket No. 99-3 CARP DD 95-98]


Distribution of 1995, 1996, 1997, and 1998 Digital Audio 

Recording Technology Royalties

AGENCY: Copyright Office, Library of Congress.

ACTION: Distribution Order.


SUMMARY: The Librarian of Congress, upon the recommendation of the 

Register of Copyrights, is adopting the determination of the Copyright 

Arbitration Royality Panel (``CARP'') and issuing an order announcing 

the allocation of the royalty fees in the 1995, 1996, 1997, and 1998 

Musical Works Funds. These fees are paid to the Copyright Office by 

importers and manufacturers of Digital Audio Recording Devices and 

Media (``DART'') who distribute these products in the United States.

EFFECTIVE DATE: The percentages announced in this Order are effective 

as of February 7, 2001.

[[Page 9361]]

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-403, First and Independence Avenue, SE, Washington, 

DC, 20559-6000.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 

Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel 

(``CARP''), PO Box 70977, Southwest Station, Washington, DC 20024. 

Telephone: (202) 707-8380. Telefax: (202) 252-3423.



    The Audio Home Recording Act of 1992, Public Law No. 102-563, 

requires manufacturers and importers of digital audio recording devices 

and media which are distributed in the United States to pay royalty 

fees to the Copyright Office. Upon receipt, the Copyright Office 

deposits these fees with the Treasury of the United States. 17 U.S.C. 


    Interested copyright parties must file a claim to these fees each 

year during January and February to establish their entitlement to a 

portion of the funds. How these funds are distributed to the various 

interested copyright parties is decided either by the parties or by 

Order of the Librarian, following a distribution proceeding conducted 

by a Copyright Arbitration Royalty Panel (``CARP''). 17 U.S.C. 1007.

    On May 4, 1999, the Copyright Office requested comments from the 

interested copyright parties as to the existence of controversy 

concerning the distribution of the DART royalty fees in the 1995, 1996, 

1997 and 1998 Musical Works Funds, and notices of intent to participate 

in any proceeding to determine the distribution of these funds. In 

addition, the Office announced that it was consolidating the 

consideration of the distribution of the 1995-1998 Musical Works Funds 

into a single proceeding in order to have sufficient funds to cover the 

cost of an arbitration proceeding. 64 FR 23875 (May 4, 1999).

    Ten parties filed comments on the existence of controversies and 

notices of intent to participate in this proceeding: Broadcast Music, 

Inc. (``BMI''); the American Society of Composers, Authors and 

Publishers (``ASCAP''); SESAC, Inc. (``SESAC''); the Harry Fox Agency 

(``HFA''); the Songwriters Guild of America (``SGA''); and Copyright 

Management, Inc. (``CMI'') (collectively, the ``Settling Parties''); 

Carl DeMonbrun/Polyphonic Music, Inc. (``DeMonbrun''); James Cannings/

Can Can Music (``Cannings''); Alicia Carolyn Evelyn (``Evelyn''); and 

Eugene ``Lampchops'' Curry/TaJai Music, Inc. (``Curry'').

    Prior to the commencement of the proceeding, Cannings and DeMonbrun 

notified the Office that they had settled their claims with the 

Settling Parties and that they were withdrawing from the proceeding. 

See Notices of Settlement and Withdrawals of Claims in Docket No.99-3 

DD 95-98 (dated November 10, 1999). This settlement resolved the 

remaining controversy over the distribution of the 1996 Musical Works 

Funds and left Evelyn's claim to a share of the royalty fees in the 

1995, 1997 and 1998 Writer's Subfunds and Curry's claim to a share of 

the royalty fees in both the 1995 and 1997 Writer's and Publisher's 

Subfunds to be determined.

    Each of the three participants filed his or her direct case with 

the Office on November 15, 1999, commencing the 45-day precontroversy 

discovery period. In addition, the Settling Parties filed a motion to 

dispense with formal hearings and to conduct the proceeding on the 

basis of written pleadings alone and a motion for full distribution of 

those funds not in controversy and a partial distribution of all 

remaining DART royalties.

    The Copyright Office granted the motion for a full distribution of 

those royalty fees that were no longer in controversy and granted in 

part the request for a partial distribution of the remaining funds. See 

Order in Docket No. 99-3 CARP DD 95-98 (December 22, 1999). However, 

the Office did not rule on the motion to dispense with formal hearings, 

choosing instead to designate the issue to the CARP. Id.

    On April 10, 2000, the Copyright Office announced the names of the 

three arbitrators chosen for this proceeding and the initiation of the 

180-day arbitration period in a Federal Register notice. 65 FR 19025 

(April 10, 2000). Shortly thereafter, the Chairperson of the panel 

resigned due to a perceived conflict of interest. Consequently, the 

Office suspended the 180-day period from May 16, 2000, until June 16, 

2000, and a new chairperson was selected during this period in 

accordance with 37 CFR 251.6(f).

    The first meeting between the parties and the arbitrators took 

place on June 19, 2000. The purpose of this initial encounter was to 

set the schedule for the proceeding and to resolve the two remaining 

procedural issues: whether to grant the Settling Parties' motion to 

suspend formal hearings and proceed on the basis of the formal record 

only and whether to allow the filing of a written rebuttal case. The 

CARP heard oral argument from the parties on these issues that day; and 

based upon these hearings, the Panel decided ``to waive the requirement 

of oral evidentiary hearings, to proceed upon the written record alone, 

and to permit the filing of written rebuttal cases.'' CARP Report, 

para. 24. See Order in Docket No. 99-3 CARP DD 95-98 (June 19, 2000). 

The Panel delivered its final report to the Copyright Office on 

November 9, 2000.

The Panel's Report

    Based upon the evidence offered in the written record, the Panel 

determined that the royalties in the 1995, 1997, and 1998 Musical Works 

Funds should be distributed as follows:

    To Mr. Curry: 0.001966% of both the 1995 Writers and Publishers 

Subfunds; and 0.001027% of both the 1997 Writers and Publishers 


    To Ms. Evelyn: 0.000614% of the 1995 Writers Subfund; 0.000130% of 

the 1997 Writers Subfund and 0.000144% of the 1998 Writers Subfund.

    To the Settling Parties: 99.997420% of the 1995 Writers Subfund and 

99.998034% of the 1995 Publishers Subfund; 99.998843% of the 1997 

Writers Subfund and 99.998973% of the 1997 Publishers Subfund; and 

99.999856% of the 1998 Writers Subfund.

    As in the prior proceeding to determine the distribution of the 

1992-1994 Musical Works Funds, the CARP adopted the Settling Parties' 

methodology which gives Curry and Evelyn a share of the royalty fees 

from a particular subfund based upon the percentage of their song 

titles sold during the relevant time period. The Settling Parties 

receive all remaining royalty fees because they represent the interests 

of the remaining copyright owners entitled to receive a portion of 

these funds.

Standard of Review

    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 applicable provisions 

of this title.'' The Librarian of Congress has discussed his narrow 

scope of review in great detail in prior decisions and concluded that 

the use of the term ``arbitrary'' in this provision is no different 

than the ``arbitrary'' standard described in the Administrative 

Procedures Act, 5 U.S.C. 706(2)(A). See 63 FR 49823 (September 18, 

1998); 63 FR 25394 (May 8, 1998); 62 FR 55742

[[Page 9362]]

(October 28, 1997); 62 FR 6558 (February 12, 1997); 61 FR 55653 

(October 28, 1996). Thus, the standard of review adopted by the 

Librarian is narrow and provides that the Librarian will not reject the 

determination of a CARP unless its decision falls outside the ``zone of 

reasonableness'' that had been used by the courts to review decisions 

of the Copyright Royalty Tribunal. See National Cable Television Ass'n 

v. Copyright Royalty Tribunal, 724 F.2d 176, 182 (D.C. Cir. 1983). 

Moreover, based on a determination by the Register and the Librarian 

that the Panel's decision is neither arbitrary or contrary to law, the 

Librarian will adopt the CARP's determination even if the Register and 

the Librarian would have reached conclusion different from the 

conclusions reached by the CARP.

    The U.S. Court of Appeals for the District of Columbia has stated, 

however, that the Librarian would act arbitrarily 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.'' See 

National Ass'n of Broadcasters v. Librarian of Congress, 146 F.3d 907, 

923 (D.C. Cir. 1998).

    For this reason, the Panel must provide a detailed rational 

analysis of its decision, setting forth specific findings of fact and 

conclusions of law. See National Cable Television Ass'n v. Copyright 

Royalty Tribunal, 689 F.2d 1077, 1091 (D.C. Cir. 1992), (requiring 

Copyright Royalty Tribunal to weigh all relevant considerations and set 

out its conclusions in a form that permits the court to determine 

whether it has exercised its responsibilities lawfully).

    It is then the task of the Register to review the Panel's report 

and make her recommendation to the Librarian as to whether it 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 


Review of the CARP Report

a. Determination of the Panel

    The Panel found that the Settling Parties are entitled to 100% of 

the funds in the 1995, 1996, 1997, and 1998 Musical Works Funds minus 

the amount owed to Curry and Evelyn. The methodology used to determine 

Curry's and Evelyn's shares is identical to the method used to 

determine the distribution of the 1992, 1993, and 1994 Musical Works 

Funds in an earlier proceeding. See 62 FR 6558 (February 12, 1997). It 

is a simple arithmetic calculation which determines each individual 

claimant's share by calculating the number of song titles credited to 

the claimant and sold in year X and dividing that figure by the total 

number of song titles sold that year. This computation represents the 

claimant's proportionate share of the total royalties in year X.

    The Panel adopted the Settling Parties' formula, in part, because 

Curry and Evelyn, while objecting to the use of this same formulation, 

failed to offer any alternative systematic method or formula for 

calculating each party's share of the royalties. CARP Report Paras. 38, 

59. Instead, both Curry and Evelyn suggested that each of them is 

entitled to 1% of the royalty fees collected for any year to which they 

filed a claim. The Panel rejected this proposal because it fails to 

explain why two individual claimants are entitled to 1% of the annual 

funds when the total claimant pool numbers in the thousands. ``If each 

of the thousands of claimants represented in this proceeding were to 

receive 1% of the DART royalties available for distribution, the total 

claimed would quickly exceed 100%.'' CARP Report para. 59.

    Evelyn and Curry, however, do not accept the Settling Parties' 

contention that they represent thousands of claimants, arguing in their 

respective filings that the organizations and associations comprising 

the Settling Parties cannot represent individual claimants and act as 

their agent in these proceedings. See Curry's Direct Cast at 2; 

Evelyn's Rebuttal Case at Paras. 1-9; Evelyn Petition at 1-2.

    The Panel considered these allegations and found that the Settling 

Parties are ``interested copyright parties,'' pursuant to 17 U.S.C. 

1001(7) and may act as agents for their members. CARP Report para. 74. 

The Panel noted that an agency relationship is established for the 

purpose of a DART proceeding when an association or organizations files 

a DART claim on behalf of its members in accordance with Sec. 259.2(c) 

of the Copyright Office rules. This provision requires an organization 

or association, which acts as a common agent on behalf of the members 

of its organization, to obtain separate, specific and written 

authorization from each of its members or affiliates in order to file a 

DART claim; and it further requires that each claim list the name of 

each individual songwriter and music publisher on whose behalf the 

organization is filing its claim. CARP Report para. 75; see also, 37 

CFR 259.2(c) and 259.3(d). Based on these written expressions of the 

agency relationship, the CARP found that each of the Settling Parties 

has the authority to act as an agent for the members listed in the 


    The CARP then examined the record evidence and the Settling 

parties' formula for calculating Evelyn's and Curry's share. First, it 

considered the Settling Parties' use of SoundScan data to establish the 

universe of record sales for each year, including testimony from 

Michael Fine, co-founder and chief executive of SoundScan. It weighted 

Fine's testimony, which identified Sound Scan as a premier independent 

online information system that tracks music sales throughout the United 

States, against challenges from Evelyn and Curry, who argued that the 

SoundScan data was incomplete because it did not include record club, 

computer and foreign sales figures. CARP Report Paras. 32-33, 62. It 

found that Evelyn and Curry were correct to conclude that inclusion of 

such data would indeed increase their total record sales, but went on 

to note that it would also increase the total record sales figures for 

other claimants. It then accepted the Settling Parties' conclusion that 

adding to the universe of sales would in all likelihood decrease the 

amount of Evelyn's and Curry's awards. CARP Report para. 62. The Panel 

also rejected Curry's and Evelyn's assertion that the total record 

sales figures should be adjusted to include foreign record sales 

because it determined that such sales are not compensable under the 

Audio Home Recording Act. CARP Report para. 62. Furthermore, and more 

importantly, the CARP found that neither Curry nor Evelyn offered an 

alternative mechanism to use of the SoundScan data for figuring out how 

many records sales occurred. CARP Report Paras. 50-53, 62, 68-69. Thus, 

finding not other basis for determining the universe of total record 

sales in the written record, the Panel accepted the testimony of 

Michael Fine and his methodology for determining the total number of 

record sales in any given year. CARP Report para. 33.

    Next, the Panel scrutinized the evidence used to determine the 

number of record sales of Curry's and Evelyn's works. First, it found 

that Curry and Evelyn had submitted no evidence into the record of 

either record sales or performances of their works. This meant that the 

Settling Parties offered the only evidence on the number of record 

sales garnered by these claimants. CARP Report Paras. 64-65, 70. To 

make this determination, the Settling parties first identified the 

names of the record titles to which Curry and Evelyn have a claim for 

purposes of this proceeding by

[[Page 9363]]

reference to the list of titles identified for each claimant in the 

prior DART distribution proceeding, see Panel's Report in Docket No. 

95-1 CARP DD 92-94 at Paras. 34, 35, the songs listed on the DART 

claims, and by conducting a search of the allmusic.com website.\1\ 

Next, the Settling Parties identified the albums and singles which 

included these works by searching these titles in Phonolog, an industry 

standard directory that lists all records, CDs, cassettes, albums and 

singles issued in the United States. CARP Report Paras. 38-40. Once the 

titles were identified, it was a simple matter to use the SoundScan 

data to determine the number of unit sales per work for each year in 

controversy. CARP Report Paras. 44-47.


    \1\ This website provides public access to a comprehensive 

database of information regarding recording artists, albums, and 



    The CARP found that the evidence introduced by the Settling Parties 

identifying and quantifying the works of Evelyn and Curry was the only 

credible evidence in the record upon which to make a determination. 

CARP Report Paras. 63-72. In fact, the Panel found that the Settling 

Parties credited Evelyn and Curry with more than their actual 

percentage entitlement because no adjustment was made to reflect the 

co-authorship or co-publication of certain works. CARP Report para. 63. 

Thus, it adopted the evidence and conclusions offered by the Settling 

Parties and based its determination of Evelyn's and Curry's shares of 

the royalty fees on the Settling Parties' methodology. The CARP did so 

with full knowledge that the methodology had been used in the previous 

DART distribution proceeding and found to be ``logical and consistent'' 

by the Librarian of Congress and reviewed with approval by the United 

States Court of Appeals for the District of Columbia. CARP Report 

Paras. 78-79.

b. Petitions To Modify or Set Aside the Panel's Determination

    1. Evelyn's Petition: Section 251.55(a) of the rules provides that 

``[a]ny party to the proceeding may file with the Librarian of Congress 

a petition to modify or set aside the determination of a Copyright 

Arbitration Royalty Panel within 14 days of the Librarian's receipt of 

the panel's report of its determination.'' 37 CFR 251.55(a). Replies to 

petitions to modify are due 14 days after the filing of the petitions. 

37 CFR 251.55(b).

    Section 251.55 of the rules assists the Register of Copyrights in 

making her recommendation to the Librarian, and the Librarian in 

conducting his review of the CARP's decision by allowing the parties to 

the proceeding to raise specific objections to a CARP's determination. 

As required by section 802(f) of the copyright Act, if the Librarian 

determines that the Panel in this proceeding has acted arbitrarily or 

contrary to the provisions of the Copyright Act, he must ``after full 

examination of the record created in the arbitration proceeding, issue 

an order setting the * * * distribution of fees.'' 17 U.S.C. 802(f).

    Evelyn, who appeared pro se in this proceeding on behalf of 

herself, filed a petition to modify. Her petition attacks the Panel's 

report on three basic points. First, as a threshold issue, she claims 

that the entities comprising the Settling Parties, particularly the 

performing rights organizations and Gospel Music Coalition, have not 

properly filed claims to the DART royalties on behalf of their members. 

Evelyn Petition at 1-3. Second, she argues that the Panel disregarded 

statements and evidence offered by herself and Curry which contested 

and disproved the Settling Parties' findings of fact and conclusions of 

law. Id. at 4-5, 8. And third, she lists a number of perceived 

procedural irregularities that she claims led to disparate treatment of 

the individual claimants: (1) Acceptance by the Office of the Settling 

Parties' direct case which she asserts was not filed in accordance with 

the governing regulations; (2) return of her rebuttal case which was 

submitted during the 45-day precontroversy discovery period; and (3) 

failure of the CARP to request additional information from her to 

substantiate her claim. Id. at 5-6, 8.

    Curry, the other individual claimant participating in this 

proceeding, did not file a petition to modify.

    2. Settling Parties' Reply to Evelyn Petition to Modify: Settling 

Parties oppose the Evelyn petition on both procedural and substantive 

grounds. They contend that the petition is substantively deficient 

because it does not demonstrate in what way the CARP report is either 

arbitrary or contrary to law--the standard of review to be used by the 

Librarian in his review of the Panel's report. See 17 U.S.C. 802(f). In 

making this point, the Settling Parties addresses each of the legal 

issues raised by Evelyn.

    The Settling Parties also argue that the Librarian should reject 

Evelyn's petition because it fails to reference applicable sections of 

her proposed findings of fact and conclusions of law, as required under 

Sec. 251.55(a) of title 37 of the Code of Federal Regulations. They 

argue that failure to correctly reference her filings shows an apparent 

willful disregard for the requirements of the rule and warrants 

dismissal of the Petition. Settling Parties' Reply at 11-12.

    3. Sufficiency of Evelyn's Petition: Before the Register can 

address the issues raised by Evelyn's petition to modify the 

determination of the Panel, the Register must first address the 

Settling Parties' argument that the petition warrants dismissal for 

failure to comply with Sec. 251.55(a) of the CARP regulations. 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).

    The purpose of this requirement is to enable the Register and the 

Librarian to locate those portions of the testimony and filings that 

support a party's petition. Absent a showing of bad faith, the remedy 

for failure to comply with the regulation is an order from the 

Register, directing the offending party to amend his or her petition 

and include the proper citations to the relevant sections of the 

party's proposed findings of fact and conclusions of law. See 62 FR 

6560 (February 12, 1997).

    The Settling Parties point out that Evelyn had encountered the rule 

in the previous proceeding to determine the distribution of the 1992-

1994 DART royalty fees and argue that her ``apparent willful disregard 

for the requirements imposed by Rule 251.55 warrants dismissal of the 

Petition.'' Settling Parties' Reply at 12.

    While it is clear that Evelyn does not provide all relevant 

references to her proposed findings of fact and conclusions of law, she 

did make a good faith effort to comply with the regulation and supplied 

citations to the Settling Parties' Direct Case, the CARP Report and her 

own proposed findings of fact and conclusions of law. See e.g., Evelyn 

Petition at pp. 2, 5, 7. Moreover, the Library will accept a less than 

perfectly executed petition without amendment where the record is 

small, and it is reasonably easy to locate the cited information in the 

record. See 62 FR 6561 (February 12, 1997). Thus, Evelyn's petition has 

received full consideration.

c. The Register's Review and Recommendation

    The statutory criteria to be considered when deciding how to 

distribute the DART royalties are set forth in section 1006(c)(2) of 

the Copyright Act, title 17 of the United States Code. It states that a 

CARP may only consider ``the extent to which, during the relevant 

period * * * each musical work was

[[Page 9364]]

distributed in the form of digital musical recordings * * * or 

disseminated to the public in transmissions.'' In the first proceeding 

to determine the distribution of DART royalties, the Panel found, and 

the Library agreed, that the statute does not require the application 

of both criteria when evidence as to only one of the criteria has been 

presented by the parties to the proceeding. 62 FR 6561 (February 12, 

1997). This determination established a precedent for the presentation 

of and reliance on sales data alone for the purpose of determining each 

claimant's share of the royalty fees.

    Evelyn argues in her petition to modify that the first proceeding 

did not establish a binding precedent for all future distribution 

proceedings, but fails to offer an alternative approach or explain why 

the Panel should deviate from the methodology used in the first 

proceeding when the record evidence parallels the prior record in its 

approach. Every Petition at 7. Her assertion about the precedential 

effect of the first proceeding is not correct. Section 802(c) requires 

the Panel to ``act on the basis of a fully documented written record, 

prior decisions of the Copyright Royalty Tribunal, prior copyright 

arbitration Panel determinations, and rulings by the Librarian of 

Congress under section 801(c).''

    Had Evelyn offered evidence of public performances or evidence for 

ascertaining the scope of record sales in a different manner, the CARP 

could have adopted a different methodology for making the 

determinations. However, an assertion that she is entitled to 1% of the 

royalty fees in the funds to which she filed a claim is not evidence. 

See Proposed Distribution Order, Evelyn Proposed Findings of Fact and 

Conclusions of Law. It is merely a statement of opinion.

    Evelyn party has an opportunity to present evidence to the Panel 

when it files the direct case. The written direct case is the very 

foundation of a party's case and as such must include testimony and 

exhibits which, when taken together, support and prove a party's claim. 

See Order in Docket No. 95-1 CARP DD 92-94 (dated May 9, 1996). In 

Evelyn's case, she supplied only a list of her works. See Evelyn Direct 

Case, exhibit 1a-1d; CARP Report para.69. Evidently, she had thought 

the CARP would request additional information and evidence from her at 

a later date. Evelyn Petition at 8; Settling Parties' Reply at 8. While 

a CARP member may, in accordance with the regulations, request 

additional information from a party, he or she does so at his or her 

own discretion. See 37 CFR 251.46(d). It is not the function of the 

Panel to search for new evidence that favors a party's case. This is 

and remains each party's prime responsibility throughout the 


    In the current proceeding, the arbitrators chose not to request any 

additional information, evidently finding the evidence in the record 

sufficient upon which to make an informed decision. Because the 

Settling Parties offered the same type of evidence as that adopted in 

the prior DART distribution proceeding and neither Evelyn or Curry made 

a showing of changed circumstances or presented material evidence \2\ 

that would justify a rejection of the Settling Parties' evidence, the 

Panel's decision to follow the precedent is neither arbitrary nor 

contrary to law.


    \2\ Evelyn claims that an increase in the number of songs for 

which she is making a claim constitutes changed circumstances and 

should alter the outcome of the CARP's decision. Evelyn Petition at 

8. However, there is no evidence in the record documenting sales of 

these works during the relevant period. CARP Report para.69.


    Evelyn also asserts, as a threshold matter, that the performing 

rights organizations had no authority to file a claim on behalf of 

their members. The Panel discussed this issue fully in its report and 

found that each of the organizations and associations that comprise the 

Settling Parties meet the definition of ``interested copyright party'' 

and are entitled to file a claim on behalf of its members and 

represents their interests in a CARP proceeding. See, supra, discussion 

in Determination of the Panel. This reasoning fully complies with the 

Copyright Act, and therefore, the participation of the members of the 

Settling Parties, including the performing rights organizations, is not 


    Evelyn also asserts that Gospel Music Coalition (``GMC'') failed to 

file a claim and therefore, cannot be represented by the Settling 

Parties. This assertion is clearly erroneous. A review of the Copyright 

Office records shows that GMC filed claims to the 1995, 1996, 1997 and 

1998 Musical Works Funds and did so in both subfunds. See, claim no. 7, 

1995 Publishers Subfund and claim no. 8, 1995 Writers Subfund; claim 

no. 9, 1996 Publishers Subfund and claim no. 7, 1996 Writers Subfund; 

claim no. 8, 1997 Publishers Subfund and claim no. 9, 1997 Writers 

Subfund; claim no. 8, 1998 Publishers Subfund and claim no. 8, 1998 

Writers Subfund.

    Based upon the proper filing of these claims, GMC was then free to 

negotiate a settlement agreement with the other parties who filed a 

claim to the same funds. 17 U.S.C. 1007(a)(2). This it did. On July 2, 

1999, the Copyright Office received official notification that Gospel 

Music Coalition had reached an agreement to settle its claims to the 

1995, 1996, 1997, and 1998 Musical Works Funds with respect to the 

Writers and Publishers Subfunds. See, Comments on the existence of 

controversies and notice of intent to participate of Broadcast Music, 

Inc., the American Society of Composers, Authors & Publishers, SESAC, 

Inc., The Harry Fox Agency, Inc., The Songwriters Guild of America and 

Copyright Management, Inc. as Settling Parties, Docket No. 99-3 CARP DD 

95-98, at 3. Consequently, Evelyn's suggestion that GMC improperly 

reached an agreement with the Settling Parties is incorrect.

    Another point Evelyn makes in her petition is that she received 

disparate treatment in this proceeding because of procedural 

irregularities. First, she argues that the Settling parties failed to 

submit their direct case in accordance with the CARP regulations. 

Section 251.45(b)(1)(i) of the rules requires that ``each party to the 

proceeding must effect actual delivery of a complete copy of its 

written direct case on each of the other parties to the proceeding no 

later than the first day of the 45-day period.'' In this proceeding, 

parties were directed to deliver copies of their direct cases to all 

parties on November 15, 1999. Evelyn, however, received her copy of the 

Settling Parties' direct case by special messenger at 3:30 a.m. on 

November 16, 1999, along with three additional motions.\3\ Evelyn 

Petition at 5.


    \3\ Meanwhile, the Settling Parties had filed its direct case 

with the Copyright Office on November 15, 1999, in accordance with 

the Office's scheduling order.


    The Panel's response to this issue was incorrect as a matter of 

law. It stated that the CARP rules do not require that each party 

receive pleadings simultaneously, citing Sec. 251.44(f). See CARP 

Report para. 19 n.5. The Panel failed to recognize that Sec. 251.45(b) 

of the CARP rules governs the filing of a direct case and specifically 

requires filing of direct cases to all parties on the same day. This 

misinterpretation, however, does not require that the Librarian set 

aside the entire decision or strike the Settling Parties' case because 

Evelyn never requested relief from the Copyright Office. Had Evelyn 

wished to contest the filing of the Settling Parties' direct case, she 

had only to file a motion with the Office seeking dismissal of the

[[Page 9365]]

Settling Parties' case or requesting an adjustment to the discovery 

schedule to make up for the lost time. She chose not to file such a 

motion, however, because she believed that ``the Copyright Office would 

(not) strike the case of the Settling Parties and leave only the two 

individual claimants in the case.'' Evelyn's Proposed Findings of Fact 

and Conclusions of Law at 3. Consequently, the Office had no reason to 

address the issue because Evelyn did not request any relief from the 

Office at the appropriate time. Furthermore, her continued involvement 

in the proceeding supports the Panel's conclusion that she did not 

suffer any undue harm because of the delay in the delivery of the 

direct case.

    Another procedural irregularity raised by Evelyn concerns the 

return of her rebuttal case. She filed it with the Copyright Office on 

November 24,1999, during the 45-day precontroversy discovery period. By 

Order, dated November 24, 1999, the Office rejected the pleading except 

for a single sentence which addressed a motion for a partial 

distribution then under consideration. The Order stated that ``[n]o 

provision is made in the rules or the Library's scheduling order for 

the filing of rebuttal cases at this stage of the proceeding. Rebuttal 

cases, if required at all, are filed with the CARP after consideration 

of the written direct cases.'' Evelyn refiled her rebuttal case on July 

28, 2000, and it was considered by the CARP at that time. Consequently, 

Evelyn suffered no prejudice from the Office's decision to strike her 

rebuttal case when it was first filed prematurely.

    Evelyn makes one additional procedural challenge in her petition. 

She contends that the Settling parties did not provide sworn testimony 

to establish a universe of sales. Evelyn Petition at 8. Specifically, 

she objects to the inclusion of Michael Fine's prior testimony from the 

1992-1994 DART distribution proceedings on the SoundScan data. This 

testimony established the basis for determining total record sales and 

record sales for Curry and Evelyn. CARP Report para. 32. She states 

that there were problems with his testimony in the 1992-1994 DART 

distribution proceedings but does not discuss what these problems were 

or why they have a bearing on the current proceeding. In any event, no 

problem was identified in the last proceeding concerning this 

testimony; thus, under the CARP rules, the Settling Parties were free 

to designate a portion of past records to be included in their direct 

case. 37 CFR 251.43. Had the Panel not allowed the incorporation of 

Fine's past testimony, it would have acted contrary to the law, unless 

it had reason to strike the testimony for good cause shown.

    Evelyn's final challenge focuses on the Settling Parties' 

methodology. She, like Curry before her in the 1992-1994 DART 

distribution proceeding, objects to the use of a methodology that only 

requires a showing of the number of record sales for the individual 

claimants. She contends that no claim can be termed a ``de minimus 

claim'' until it is measured against the entitlement of others. Evelyn 

Petition at 3. In response, the Panel noted that the courts have 

repudiated as wasteful a requirement that all claimants in a given 

distribution proceeding prove their entitlement through the 

presentation of detailed data for every individual work. CARP Report 

para. 76. In National Association of Broadcaster v. Copyright Royalty 

Tribunal, 772 F.2d 922, 939 (D.C. Cir. 1985), the case cited by the 

Panel in its report, the court wisely noted that to do otherwise would 

effectively eliminate the likelihood of settlements because a single 

claimant--no matter how modest that claimant's likely share under even 

the most sanguine review--could choose not to settle with the other 

claimants and require a full hearing on all claims, even those not in 


    For all the reasons set forth in the prior discussion, the Register 

concludes that the Panel did not act arbitrarily or contrary to the 

provisions of the Copyright Act in determining the value of Curry's and 

Evelyn's DART claims and recommends that the Librarian adopt without 

amendment the Panel's Report and recommendation for the allocation of 

the 1995, 1997 and 1998 Musical Works Funds.

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 concerning the distribution of the 1995, 1997 and 1998 Musical 

Works Funds, the Librarian of Congress fully endorses and adopts her 

recommendation to accept the Panel's decision. 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 announcing the 

allocation of the royalty fees in the 1995, 1997 and 1998 Musical Works 


    Wherefore, it is ordered that the royalty fees in the 1995, 1997 

and 1998 Musical Works Funds shall be distributed according to the 

following percentages:





                                               Writers (%)       (%)


Curry.......................................      0.001966      0.001966

Evelyn......................................      0.000614           N/A

Settling parties............................     99.997420     99.998034

    n,sTotal...............................        100.00        100.00






                                               Writers (%)       (%)


Curry.......................................      0.001027      0.001027

Evelyn......................................      0.000130           N/A

Settling parties............................     99.998843     99.998973

    n,sTotal...............................        100.00        100.00






                                               Writers (%)       (%)


Curry.......................................           N/A           N/A

Evelyn......................................      0.000144           N/A

Settling parties............................     99.999856        100.00

    n,sTotal...............................        100.00        100.00


    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 thirty (30) days from the effective date of this Order.

    Dated: January 30, 2001.

Marybeth Peters,

Register of Copyrights.

    Approved by:

James H. Billington,

The Librarian of Congress.

[FR Doc. 01-3142 Filed 2-6-01; 8:45 am]