Universal City Studios Lllp v. Peters, 04-5138.

Decision Date08 April 2005
Docket NumberNo. 04-5138.,No. 04-5142.,04-5138.,04-5142.
Citation402 F.3d 1238
PartiesUNIVERSAL CITY STUDIOS LLLP and Universal City Studios Productions LLLP, Appellants v. Marybeth PETERS, in her official capacity as Register of Copyrights, and Copyright Office, Appellees Metro-Goldwyn-Mayer Studios, Inc., Appellant v. Marybeth Peters, the Register of Copyrights of the United States of America, Appellee.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (No. 03cv01082) (No. 03cv00179).

Randolph D. Moss argued the cause for appellants Universal City Studios, et al. With him on the briefs were Thomas P. Olson, Edward N. Siskel, and Brian M. Boynton.

David E. Kendall argued the cause for appellant Metro-Goldwyn-Mayer Studios, Inc. With him on the briefs was Vidya S. Atre.

James J. Gilligan, Attorney, U.S. Department of Justice, argued the cause for appellees Marybeth Peters, et al. With him on the brief were Peter D. Keisler, Assistant Attorney General, Kenneth L. Wainstein, U.S. Attorney, Gregory G. Katsas, Deputy Assistant Attorney General, and Mark B. Stern, Attorney.

Before: SENTELLE and ROBERTS, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge ROBERTS.

ROBERTS, Circuit Judge.

Cable and satellite companies are required to pay royalties into a common fund when they retransmit certain copyrighted television broadcasts. To collect from the fund, copyright owners must file claims with the Copyright Office annually during the month of July. In 2001, Metro-Goldwyn-Mayer Studios (MGM) and Universal City Studios had their claims rejected as untimely because they could not produce a stamped postal receipt showing that the claims, which were received at the Copyright Office in August, had been mailed in July. The studios challenged the rejections in the district court and now appeal a grant of summary judgment for the Copyright Office. We affirm.


Congress has established a compulsory licensing scheme for broadcast copyrighted material that is retransmitted by cable and satellite companies. See 17 U.S.C. §§ 111, 119 (2000); Nat'l Ass'n of Broadcasters v. Librarian of Congress, 146 F.3d 907, 910-13 (D.C.Cir.1998) (summarizing statutory framework). Under this arrangement, cable and satellite companies are permitted to retransmit broadcasts of over-the-air television programming, provided that they deposit royalty fees with the Copyright Office for eventual distribution to copyright owners. Copyright owners, in turn, must file their claims for royalties "[d]uring the month of July in each year" and "in accordance with requirements that the Librarian of Congress shall prescribe by regulation." Id. §§ 111(d)(4)(A), 119(b)(4)(A). Royalties are distributed proportionally by means of settlement agreements among the various claimants or arbitration. See Distribution of 1998 and 1999 Cable Royalty Fund, 68 Fed.Reg. 17,838 (Apr. 11, 2003).

Copyright Office regulations specify that a claim will be considered timely if the claim (1) was actually received by the Office during July, or (2) bears a July U.S. postmark and was sent via the United States Postal Service. 37 C.F.R. § 252.4(a) (2001). The regulations also expressly state that "[c]laims dated only with a business meter that are received after July 31, will not be accepted as having been timely filed." Id. § 252.4(c). There is an exception to that provision, however, specifying that if a claim was sent using certified mail return receipt requested and the claimant can produce a mailing receipt bearing a July U.S. Postal Service date stamp, the claim will be accepted as being timely filed. Id. § 252.4(e). The regulations provide that "[n]o affidavit of an officer or employee of the claimant, or of a U.S. postal worker will be accepted in lieu of the receipt." Id.

The facts at issue are straightforward. MGM and Universal are film and television production studios based in southern California. MGM's royalty claims for the year 2000 arrived at the Copyright Office on August 2, 2001. The envelope was sent by certified mail and bore only a stamp from a Pitney Bowes business postage meter. Universal's claims arrived the next day, also by certified mail and bearing only a Pitney Bowes postage meter stamp. Both studios estimate the value of their claims in the millions of dollars.

The studios heard nothing from the Copyright Office until November 2001, when each received word that their claims would not be accepted unless they could produce a receipt with a July U.S. Postal Service date stamp. Even at this remove, we can sense the intensity of the searches that these letters must have precipitated, but neither studio was able to locate a receipt. Lacking a receipt, the studios mobilized their lawyers. They separately responded with letters arguing that their claims were timely filed because they had been mailed during July, which was all the studios understood the Office's rules to require. They submitted sworn statements from the employees responsible for mailing the claims, stating that the letters were mailed on July 30, 2001. In addition, they presented declarations from Postal Service employees about the normal delivery time for a letter sent from southern California to Washington, D.C. (three to five days) and statements from Pitney Bowes employees attesting that the machines used by the studios are tamper-proof. Universal later supplemented its initial submission with the results of an in-house experiment showing that none of one hundred letters sent to Washington from Van Nuys, California arrived in fewer than three days — suggesting that its own claim, which arrived on August 3, must have been sent during July. In the event the Office interpreted its rule to require a postal receipt, each studio also requested a waiver.

The Copyright Office reached a final decision rejecting the studios' claims on December 2, 2002. It interpreted its rules to require a stamped USPS receipt for all claims received after the end of July that do not bear a U.S. postmark. The Office dismissed the evidence submitted by the studios, pointing to the regulations' express bar on considering affidavits from claimant or Postal Service employees "in lieu of the receipt." See 37 C.F.R. § 252.4(e). Moreover, it rejected the studios' waiver requests on the ground that they presented no "special or unique circumstance . . . that would warrant a waiver." Letter to Olson & Moss, Dec. 2, 2002, at 6; Letter to Tunberg, Dec. 2, 2002, at 5.

The studios filed complaints in the district court alleging that the Office had acted in violation of the Copyright Act, the Administrative Procedure Act, and the Due Process Clause of the Fifth Amendment. The court found no merit to these contentions and, in two separate opinions, granted summary judgment for the Office. Metro-Goldwyn-Mayer Studios, Inc. v. Peters, 309 F.Supp.2d 48 (D.D.C.2004); Universal Studios LLLP v. Peters, 308 F.Supp.2d 1 (D.D.C.2004). The studios appeal.


The studios present several challenges to the Office's rejection of their claims. First, MGM, but not Universal, argues that the Office has incorrectly interpreted its regulations regarding timely submission of claims. Second, both studios argue that the denial of their waiver requests was arbitrary and capricious because the Office has not consistently enforced its regulations regarding timely filing. Third, the studios argue that the Office violated due process by refusing to accept any evidence, other than a stamped postal receipt, that their claims were mailed in July. We review de novo the district court's grant of summary judgment. Williams v. United States, 396 F.3d 412, 413 (D.C.Cir.2005).

A. MGM argues that the Office's insistence on a postal receipt, and exclusion of all other evidence of a July filing, is "incompatible" with the Copyright Act and the implementing regulations. The regulations do not, it argues, categorically bar consideration of other evidence. MGM Br. at 25. On the contrary, it maintains, the regulations' specific exclusion of affidavits from claimant employees and postal workers implies that other evidence will be considered. In addition, MGM relies on the language of section 252.4(e), which states that a claimant "may" prove proper filing by means of a stamped receipt, to argue that the requirement is only permissive and that claimants may prove proper filing by other means as well. See 37 C.F.R. § 252.4(e).

This is quite a stretch. The rules make clear that claims arriving after July that do not bear a U.S. postmark will not be accepted unless the claimant can produce a stamped receipt. Section (c) states the general rule very clearly: "Claims dated only with a business meter that are received after July 31, will not be accepted as having been timely filed." Id. § 252.4(c). Section (e) provides for the one and only exception to this rule for claims without a U.S. postmark: "[i]n the event that a properly addressed and mailed claim is not timely received by the Copyright Office," claimants "may nonetheless prove" proper filing using a receipt. Id. § 252.4(e). In other words, the rule is only "permissive" in that it allows claimants their one means of escaping the consequences of section (c).

Similarly, the provision excluding certain affidavits cannot fairly be understood to imply that the Copyright Office is required to consider other evidence. The regulations' evident purpose is to exclude precisely the kind of factual inquiry MGM seeks. See Copyright Arbitration Royalty Panels; Rules and Regulations, 61 Fed.Reg. 63,715, 63,716 (Dec. 2, 1996) ("The only acceptable proof of a timely filing . . . is the certified mail return receipt bearing a U.S. Postal Service mark demonstrating that the mailing occurred during the relevant time period to the appropriate address."); Copyright Arbitration...

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