[00:00:01] Speaker 00: Case number 15 of 1084 at L. Settling devotional claimant appellant versus Copyright Royalty Board and Librarian of Congress. [00:00:10] Speaker 00: Ms. [00:00:10] Speaker 00: McLean for settling devotional claimants, Mr. Boydson for Independent Producers Group, and Ms. [00:00:16] Speaker 00: Selfin for Copyright Royalty Board. [00:00:52] Speaker 03: May it please the Court, I'm Matthew McClay and I represent the Settling Devotional Claimants, a coalition of religious ministries that produce devotional television programs for broadcast. [00:01:03] Speaker 03: I'd like to reserve two minutes for rebuttal. [00:01:06] Speaker 03: In distributing the cable royalty funds for the year 1999, the Copyright Royalty Board aired in two important respects, both to the detriment of the settling devotional claimants of the SDC, and both of which involved a failure to give the SDC notice and an opportunity to be heard. [00:01:26] Speaker 03: First, there was a surprise sanction against the SDC that allowed our opponents, IPG, to [00:01:36] Speaker 03: claim the disputed value of the program, Kenneth Copeland programming, which was the most valuable programming claimed by IPG in these proceedings. [00:01:49] Speaker 03: That sanction was based on nothing raised by any of the parties, and we were given no notice or opportunity to challenge that sanction. [00:01:58] Speaker 03: The second error was in applying, was the board's application of a distribution methodology of the board's own invention, ignoring the value of the SDC's Oral Roberts programming, which was the most widely retransmitted program, devotional program in 1999. [00:02:16] Speaker 03: The board offered no reason to exclude this programming. [00:02:19] Speaker 03: The SDC never had, because it was first presented in the board's final distribution decision, the SDC had no opportunity to address this error. [00:02:29] Speaker 03: So I'd like to first address the error of the surprise sanction. [00:02:34] Speaker 03: This was the sanction based upon our alleged mislabeling of requests for witness testimony as requests rather than as the board apparently intended but did not clearly say, requests and not subpoenas. [00:02:51] Speaker 03: The board referred to this mislabeling by the SDC as egregious misconduct for the purpose of trying to deceive a witness, and admitted that but for what it termed as egregious misconduct, the board would have sustained our objection to the admission of the deposition transcript. [00:03:13] Speaker 03: Now, I personally prepared those requests for witness testimony. [00:03:18] Speaker 03: There was absolutely no intent to deceive, and nobody was deceived. [00:03:25] Speaker 03: The first thing I did when I received that written order authorizing us to send those requests was to call my opponent, Brian Boydston, IPG's counsel, and talk about what to do. [00:03:37] Speaker 03: And we agreed on that phone call, and it's memorialized by email, that the witness would be produced voluntarily, that she would appear for the deposition, that Mr. Boydston would accept service of the request on the witness's behalf, and he was authorized to do so. [00:03:53] Speaker 03: I went back to my computer. [00:03:54] Speaker 03: I followed the written order as I understood it. [00:03:58] Speaker 03: I prepared the requests in the form of a subpoena. [00:04:02] Speaker 03: I clearly labeled them as requests and not as subpoenas. [00:04:09] Speaker 03: And we served those requests on Mr. Boydson as we had agreed. [00:04:13] Speaker 03: Along with the requests, we served a copy of the written order that explained that these were voluntary requests. [00:04:20] Speaker 03: And obviously, Mr. Boydston, as IPG's counsel, was aware of that. [00:04:24] Speaker 03: I had no contact directly with the witness, had no contact with the witness except through counsel, counsel who was clearly aware of the order, of the voluntary nature of the request. [00:04:37] Speaker 03: I then coordinated logistically with Eagle Mountain's counsel, who was also present, along with IPG's counsel, at the deposition. [00:04:49] Speaker 03: All counsel were aware that these were voluntary requests. [00:04:52] Speaker 03: The witness was aware, too, because she refused to produce documents in accordance with the request, as was her right to do. [00:04:58] Speaker 03: And we didn't raise an issue of it, because everybody understood it was voluntary. [00:05:02] Speaker 03: At the deposition, I said, and Eagle Mountain's counsel also said multiple times on the record, your appearance here is voluntary. [00:05:13] Speaker 03: This is a voluntary deposition. [00:05:14] Speaker 03: You're not required to be here. [00:05:17] Speaker 03: And in fact, Eagle Mountain's counsel used her voluntary appearance as a basis to instruct her not to answer my questions. [00:05:25] Speaker 03: And that's what happened. [00:05:27] Speaker 03: I questioned her, including about the Senate report, which was our evidence that Eagle Mountain did not own the copyright to the Kenneth Copeland programming, and the witness refused to answer any questions about it. [00:05:42] Speaker 03: However, and I terminated the deposition, ultimately, because of her refusal to ask questions. [00:05:47] Speaker 03: which I believe was the proper course of action. [00:05:51] Speaker 03: Over my objection, IPG's counsel recommenced that closed deposition, questioned her about it. [00:05:56] Speaker 03: She answered his questions, but not mine. [00:05:58] Speaker 03: And then we objected at the hearing to the admission of that deposition testimony that I objected to. [00:06:09] Speaker 03: Nobody, neither Eagle Mountain, nor Ms. [00:06:15] Speaker 03: Harbor, the witness, nor IPG, ever before, during, or after that hearing, ever raised an issue about the mislabeling, the alleged mislabeling of the request. [00:06:26] Speaker 03: It simply wasn't an issue. [00:06:27] Speaker 05: And Mr. McLean, how does that prejudice you? [00:06:32] Speaker 05: Given that if you had not had an opportunity to depose Ms. [00:06:38] Speaker 05: Harbour, they would have presented a declaration of her testimony presumably along the same lines as what they elicited in the deposition, and that would have been competent evidence before the royalty. [00:06:48] Speaker 03: Well, Your Honor, the IPG speculates that that declaration would have come into evidence. [00:06:52] Speaker 05: Well, wouldn't that be ordinarily? [00:06:54] Speaker 05: I mean, isn't that how, if you don't depose people, you [00:06:58] Speaker 03: The board has discretion. [00:07:03] Speaker 03: as to whether to admit hearsay. [00:07:06] Speaker 03: And so that would have been hearsay. [00:07:08] Speaker 03: We objected as hearsay. [00:07:09] Speaker 03: We made arguments as to why it wasn't reliable. [00:07:12] Speaker 03: Ultimately, the board rejected it, in part on the basis that it would have been duplicative of her deposition testimony. [00:07:20] Speaker 03: But it would be speculative to say whether that evidence would have come in, had the deposition testimony not come in. [00:07:27] Speaker 03: It would also be speculative as to what weight the board would give that declaration. [00:07:34] Speaker 03: as opposed to her oral testimony. [00:07:35] Speaker 03: We just don't know. [00:07:36] Speaker 03: And this is why we hope to find out on remand. [00:07:48] Speaker 06: You have a good argument that your mislabeling was not egregious. [00:07:54] Speaker 06: But to follow up on the question of how are you prejudiced, if [00:07:59] Speaker 06: Even if that you don't have a deposition and you can't get that in as a declaration, isn't the copyright board going to presume the answer to this question? [00:08:12] Speaker 06: So how does it prejudice you? [00:08:14] Speaker 03: The board applies a presumption in favor of copyright ownership. [00:08:21] Speaker 03: But in this 1999 decision, you'll see the board has not fully articulated the contours of that presumption, whether, for example, the presumption is defeated simply by offering evidence and rebutting it, or whether the burden of proof is on the party seeking to rebut it. [00:08:37] Speaker 03: This is a question the board has left open, expressly leads open in their decision here. [00:08:44] Speaker 03: The board did not say that our evidence, the Senate report, was insufficient to overcome the presumption. [00:08:50] Speaker 03: They said it was insufficient to overcome IPG's evidence. [00:08:53] Speaker 03: The only evidence IPG offered on this subject was the deposition testimony, which was admitted only as a result of what the board termed egregious misconduct. [00:09:05] Speaker 03: I want to very briefly in my short remaining time address our second point of error, which was again based on a failure to give notice and opportunity to respond. [00:09:19] Speaker 03: The board adopted a distribution methodology of its own making, excluding the value of Oral Roberts Program. [00:09:26] Speaker 03: We don't take issue with the fact that the board rejected our methodology and IPG's methodology, or that it applied a ratings methodology, a local ratings-based methodology. [00:09:39] Speaker 03: We do take issue with their failure to inform us and give us an opportunity. [00:09:45] Speaker 03: What the board could have done is exactly what any other agency does in the context of the Administrative Procedures Act, which is to let us know [00:09:55] Speaker 03: what they are planning to do and to give us a reasonable opportunity to respond. [00:10:01] Speaker 03: And this is exactly what this court said, and I believe it was then Chief Judge Edwards in the RIA versus Library of Congress decision. [00:10:09] Speaker 03: This was involving a predecessor tribunal to what is now the Copyright Royalty Board. [00:10:13] Speaker 03: A matter in dispute must be properly raised before the arbitration panel so that the parties have a fair opportunity to address it. [00:10:22] Speaker 05: But this issue was raised on both sides. [00:10:25] Speaker 05: presented their positions and the royalty board made its judgment, you know, taking the greens and blues from this side and the reds and the pinks from that side and mixing it up. [00:10:36] Speaker 05: And it wasn't the color either of you had proposed, but it derived from them, no? [00:10:41] Speaker 05: This is not rulemaking. [00:10:43] Speaker 05: This is a measure of adjudication. [00:10:45] Speaker 03: Your Honor, at the end of the day, what the Board did in this case is exactly what the Board did in the last time we were here before this Court, Settling Devotional Claimants versus Copyright Royalty Board, which this Court decided in 2015. [00:10:59] Speaker 03: That decision came shortly after the board's decision in this 1999 case. [00:11:04] Speaker 03: So unfortunately, the board did not have the benefit of the court's reasoning when it came up with this decision. [00:11:11] Speaker 03: But they took elements, they took pieces of data, plucked them out of context, used them for purposes other than what the data was presented for in order to reach a result driven [00:11:27] Speaker 03: decision approximately in the middle. [00:11:30] Speaker 03: They did it with respect to our data by applying a data set that was meant for a computational purpose other than what it was applied. [00:11:38] Speaker 03: And that's why they left out Oral Roberts programming. [00:11:42] Speaker 03: There's no rational basis to leave out Oral Roberts programming. [00:11:46] Speaker 03: It was purely a result of the fact that they took this data set that was intended for a different purpose and they didn't give us an opportunity to say, wait, that's leaving out one of our most valuable programs. [00:11:59] Speaker 03: A program that under a distant viewing standard outweighed, had received more distant viewing than all of IPG's programs put together. [00:12:09] Speaker 03: And that's why we're prejudiced when the board goes about it this way. [00:12:13] Speaker 05: And you didn't object to the Royalty Board's determination that they lack authority to issue subpoenas? [00:12:19] Speaker 05: That's not before us, is it? [00:12:22] Speaker 03: No, Your Honor. [00:12:22] Speaker 03: We asked for a subpoena. [00:12:23] Speaker 03: Right. [00:12:24] Speaker 03: The board ruled that it doesn't have that authority. [00:12:26] Speaker 03: Right. [00:12:26] Speaker 03: And that's not something that's before us. [00:12:27] Speaker 03: That's not on appeal. [00:12:28] Speaker 03: We haven't challenged. [00:12:29] Speaker 03: We don't necessarily agree, but it's not on appeal. [00:12:33] Speaker 03: You know, as to the assignments of error that IBG has raised, we're willing to stand on our briefs. [00:12:42] Speaker 03: We would ask this Court to reverse the sanction, to remand for further consideration as to the ownership of Kenneth Copeland programming, and to give us an opportunity for the first time to challenge the Board's exclusion of Oral Roberts from its distribution award. [00:12:57] Speaker 06: All right. [00:12:58] Speaker 06: Thank you. [00:13:06] Speaker 01: Morning. [00:13:06] Speaker 01: May it please the Court, Brian Boyce on behalf of Worldwide Substitute Group Doing Business as Independent Producers Group, also referred to as IPG. [00:13:14] Speaker 01: I'd like to start right where we left off. [00:13:16] Speaker 01: It just seems to make sense with regard to the issue about the CRB's ultimate decision. [00:13:22] Speaker 01: I think, Judge Pillard, you hit the nail on the head. [00:13:25] Speaker 01: This was not a rulemaking endeavor. [00:13:28] Speaker 01: This was adjudication. [00:13:30] Speaker 01: what the code requires is that the judges, the CRB judges, have hearings, listen to evidence, listen to different methodologies, and then make a decision and craft a distribution methodology themselves. [00:13:44] Speaker 01: That's what they did here. [00:13:46] Speaker 01: As you put it, they took some of this and they took some of that, and this is what they gave us. [00:13:50] Speaker 01: Therefore, there's no need for them to give [00:13:53] Speaker 01: the SDC or anyone further notice and say, well, let's continue this and have more brief writing and more hearings, everything else. [00:14:01] Speaker 01: They already had done that. [00:14:02] Speaker 01: They said, OK, we've got a record before us. [00:14:04] Speaker 01: We are going to use what we like from that record to come up to craft an adjudicatory result. [00:14:09] Speaker 01: And that's what they did. [00:14:10] Speaker 01: There's no reason for them to have issued notice saying, hey, let's re-litigate this over and over again. [00:14:16] Speaker 01: It would be tantamount to a trial court after the jury returns a verdict saying, you know what, let's bring the jury back in and let's have some more testimony. [00:14:27] Speaker 01: I mean, it's simply not procedurally what's required. [00:14:32] Speaker 01: The other issue that the SDC, of course, raises is with regard to this whole Kenneth Copeland issue. [00:14:39] Speaker 01: I submit to Your Honors. [00:14:42] Speaker 01: It's harmless error if it is error at all. [00:14:45] Speaker 01: Because the fact of the matter is that the judges did say in their decision that they found the Senate hearings completely unreliable, full of hearsay. [00:14:55] Speaker 01: And in fact, I'll remind you, as we pointed out in our briefs, [00:14:58] Speaker 01: The CDC originally ellipsed out important parts of that Senate testimony when they presented their argument in writing to the CRB. [00:15:08] Speaker 01: We saw that and explained the entire context of those comments and the entire context of those comments, which we repeat in our papers that we presented to you. [00:15:18] Speaker 01: Make it very clear that even at that Senate hearing, for whatever it's worth, there was no indication and no evidence of any sort that said that Kenneth Copeland Ministries did not own [00:15:30] Speaker 01: the TV programs in question. [00:15:32] Speaker 01: In fact, there was even a specific section where they said, well, we have books and we have this and the other, and then we have media stuff which Kenneth Copeland Industries owns. [00:15:44] Speaker 01: Mr. Copeland and Mrs. Copeland don't own that. [00:15:47] Speaker 01: Kenneth [00:15:49] Speaker 01: Copeland Ministries Inc. [00:15:50] Speaker 01: owns that. [00:15:51] Speaker 01: So even if you want to get into the quality of the Senate report, there's no evidence there that questions the ownership. [00:15:59] Speaker 01: And in fact, it is consistent with the fact that Kenneth Copeland Ministries does own Kenneth Copeland Ministries programming, which should seem obvious. [00:16:07] Speaker 01: Then we have the matter of this quasi-deposition or whatever you want to call it. [00:16:11] Speaker 01: Now the fact of the matter is that the CRV said, I mean this is a very unusual animal, this doesn't fall within the rules of civil procedure, it doesn't fall within actually any of the regulations really, this was sort of made out of whole cloth. [00:16:25] Speaker 01: But what they did do, [00:16:26] Speaker 01: is they said, we are issuing a specific edict that you can ask questions of this witness if they appear voluntarily on these subjects and enumerated the subjects, which were the ownership of these programs. [00:16:39] Speaker 01: So then we get the deposition, and Mr. McLean doesn't want to talk about any of that off the bat. [00:16:43] Speaker 01: He wants to ask about personal contracts for the coins individually, the components individually. [00:16:50] Speaker 01: And counsel for Kenneth Copeland Ministries, not me, as was said in the decision by the CRB, I said nothing on this. [00:16:58] Speaker 01: They weren't my client. [00:17:00] Speaker 01: Counsel for the deponent said, rock me, answer that stuff, because it's not within the edict that was issued by the CRB allowing this whole deposition-like process to go forward. [00:17:11] Speaker 01: And so then Mr. McClain said, well, let's end this right now. [00:17:13] Speaker 01: And I said, well, I'm not ending it right now. [00:17:15] Speaker 01: I'm not required to stay within the scope of what you asked. [00:17:18] Speaker 01: There's nothing that says that. [00:17:20] Speaker 01: I'm going to ask the questions that the CRB said could be asked. [00:17:23] Speaker 01: And they were very simply, who owns these programs? [00:17:26] Speaker 01: And they gave a simple, straightforward answer. [00:17:28] Speaker 01: And that was then presented to the CRB. [00:17:30] Speaker 01: And the CRB said, well, this is all clear in here. [00:17:32] Speaker 01: We'll accept this. [00:17:35] Speaker 01: And the only reason they didn't accept the declarations by the Copeland's and their staff that we presented was essentially because they said it's not necessary because we have the deposition transcript. [00:17:47] Speaker 01: So this is a tempest in a teapot. [00:17:49] Speaker 01: If that was error to sanction the SDC and allowing the deposition, it was harmless error. [00:17:56] Speaker 01: Because number one, there's no evidence that Kenneth Copeland Industries doesn't own its own programming. [00:18:00] Speaker 01: It's just a pipe dream. [00:18:02] Speaker 01: And on top of that, the evidence that there was admitted was a sworn deposition-like testimony confirming that fact. [00:18:10] Speaker 01: And there were these declarations which would have been accepted had that not been there. [00:18:15] Speaker 01: I'd like now to turn to the issues that we raised on appeal. [00:18:19] Speaker 01: The first one is with regard to Adventist media. [00:18:23] Speaker 01: Now here, getting back into the same subject matter to a degree, and Judge Pollard, you asked a question in this regard about isn't this kind of how you do these things? [00:18:31] Speaker 01: You present declarations to prove your points. [00:18:33] Speaker 01: Sometimes, by and large, yes, we present declarations because the CRB is allowed to accept hearsay evidence. [00:18:41] Speaker 01: That flies, normally. [00:18:43] Speaker 01: And I would point out, in the case of the Warren Judd Declaration, which made it very clear that the Adventist was the distributor of the TV shows in question and had control of them and was authorized to collect these royalties, [00:18:58] Speaker 01: The CRB admitted it and then excluded certain paragraphs, all the important paragraphs. [00:19:04] Speaker 01: Notably, in the subsequent proceeding for the years 1999 to 2009, the same declaration was submitted to the CRB and they accepted it. [00:19:15] Speaker 01: There is no rhyme, reason, or logic why there is that inconsistency. [00:19:20] Speaker 01: I submit to you that it was just a mistake they made to say we're not going to consider a sworn declaration by Warren Judd making very clear who has the authority to get this program. [00:19:32] Speaker 01: It was just an arbitrary and capricious knee-jerk reaction that I don't know why it happened or what the [00:19:41] Speaker 01: But it falls very clearly within the scope of something that's arbitrary and capricious. [00:19:46] Speaker 01: As is illustrated over the top, in fact, they allowed it in a subsequent proceeding. [00:19:54] Speaker 01: With regard to the SDC methodology, the SDC methodology should never have been admitted. [00:19:59] Speaker 01: It should have been excluded. [00:20:00] Speaker 01: That's why we brought the original motion to knock it out. [00:20:04] Speaker 01: That's why, according to the CRB's direction, we brought it then again as a motion to eliminate. [00:20:09] Speaker 01: Clearly, the SDC admittedly did not have access to all the intermediate files that were in support of its methodology and said they couldn't produce it. [00:20:19] Speaker 01: They also said that it was also clear that, and this is very important, that they, when it came down to it, they could never explain how it was they derived [00:20:28] Speaker 01: the set of stations they were using for their study. [00:20:32] Speaker 01: Out of 700 possible stations, they had chosen 72 without any rhyme or reason. [00:20:38] Speaker 01: And they couldn't even tell us who came up with that list. [00:20:41] Speaker 01: They thought it was Marcia Kessler, a person at the MPAA. [00:20:45] Speaker 01: But then it turned out that that was not the case, because the list that Ms. [00:20:48] Speaker 01: Kessler had come up 10 years prior didn't match the list that the SDC were using. [00:20:53] Speaker 01: From a statistical standpoint, this is very important. [00:20:56] Speaker 01: One of the bedrock things you've always got to know is if you're taking a sample of a whole, you have to explain how it is you chose that sample and why it's representative or not. [00:21:08] Speaker 01: And that was just never, ever, ever done. [00:21:10] Speaker 01: And yet the CRB decided to just gloss over that despite an obvious problem. [00:21:15] Speaker 05: Well, you're arguing against the MPAA data, but the royalty board decides not to use the MPAA data. [00:21:21] Speaker 05: They decide to use the Nielsen data instead. [00:21:23] Speaker 01: Well, the Nielsen data was data relied upon by the MPA study. [00:21:27] Speaker 01: That is the MPA. [00:21:28] Speaker 05: Among the data, but itself, it doesn't have that same flaw that you were just identifying, does it? [00:21:32] Speaker 01: I have a bigger one. [00:21:33] Speaker 05: It doesn't have the same flaw that you were just identifying, does it? [00:21:36] Speaker 01: Yes, it does. [00:21:37] Speaker 01: The Nielsen data? [00:21:37] Speaker 01: Yes, I mean, that was the whole thing that was... [00:21:40] Speaker 01: See, what happened here is the SDC didn't really do their own methodology, per se. [00:21:45] Speaker 01: They took a bunch of data, and they took Mr. Witt, who had worked for the NPA before, and they tried to bootstrap that into their own methodology. [00:21:53] Speaker 01: That might work. [00:21:54] Speaker 01: That might be fine. [00:21:55] Speaker 01: As it turned out, it wasn't. [00:21:57] Speaker 01: Amongst other things, when they looked at their station sample of 72 that they thought had been chosen by a person at the NPA, it wasn't. [00:22:05] Speaker 01: I don't know and it's never been explained how one got to the other, but it was not the same 72 stations. [00:22:13] Speaker 01: And in addition to that, they couldn't even make a foundational presentation as to their data because they didn't collect it. [00:22:23] Speaker 01: The MPA did and the MPA got it from Nielsen. [00:22:26] Speaker 01: So there's several levels. [00:22:27] Speaker 05: So your objection is not to Nielsen data per se, it's to the choice of which [00:22:34] Speaker 05: Which areas to include? [00:22:36] Speaker 01: Well, there's the stations that were chosen, that's one issue. [00:22:39] Speaker 01: With regard to the Nielsen data, our point is that there's no foundation for it. [00:22:44] Speaker 01: There are two levels of other parties preparing this stuff, and therefore there's no basis for it. [00:22:51] Speaker 01: The other thing too, quickly, is that this was a viewership-based study. [00:22:55] Speaker 01: And the president is there for the CRT and the CARB saying a viewership-based study measures the wrong thing. [00:23:03] Speaker 01: Because what we're looking at here is not people sitting in their homes watching TV, but cable system operators, which we call CSOs, deciding whether or not to purchase a particular station's broadcasting or not. [00:23:18] Speaker 01: That is what this is supposed to reflect. [00:23:20] Speaker 05: I thought the reduction of viewership models was for phase one, not for phase two. [00:23:24] Speaker 01: There's no rational distinction as to why it would be any different between phase one and phase two. [00:23:30] Speaker 01: In phase one, you're dividing the pie into categories like sports, religious, et cetera. [00:23:36] Speaker 01: In phase two, you're dividing those individual categories amongst individual people, claimants, if you will. [00:23:43] Speaker 01: There is no logical reason why [00:23:46] Speaker 05: The viewer-based study flaw is any different at phase one or at phase two, and no one has ever... Does our IPG decision in 2015 say that it does make sense to make a distinction in our IPG decision in 2015? [00:24:00] Speaker 05: I thought we said that it does make sense, different considerations. [00:24:02] Speaker 01: Well, there's no rational reason to explain why that is. [00:24:05] Speaker 01: I mean, it's like saying, [00:24:06] Speaker 01: that the first three innings of a baseball game are fundamentally different than the second three innings of a baseball game. [00:24:10] Speaker 01: You can say that, but no, it's the same players. [00:24:12] Speaker 01: No, there just simply is no difference. [00:24:15] Speaker 01: And to understand, you have to go back. [00:24:17] Speaker 01: What is the meaning of viewer-based study? [00:24:20] Speaker 01: What is all this about? [00:24:21] Speaker 01: It's about what is important. [00:24:23] Speaker 01: to the person who spends the money to pay this license in the first place. [00:24:28] Speaker 01: Well, the person who spends the money to pay this license in the first place are not viewers sitting at home choosing which show to watch. [00:24:35] Speaker 01: They are cable systems operators who are concerned about a panoply of programming that they want to present to their subscribers. [00:24:42] Speaker 01: And so you have to focus on what that CSO is thinking. [00:24:46] Speaker 01: He has no, he doesn't care at all what the viewership is. [00:24:49] Speaker 01: What he cares about are what will my subscribers want? [00:24:53] Speaker 01: What will attract them? [00:24:54] Speaker 01: And that's why we, in different testimony and different proceedings along these lines, we've had people testify that sometimes a particular CSO may pay a premium for a broadcast station because it includes Korean broadcasting. [00:25:06] Speaker 01: And he has a Korean community in his community. [00:25:08] Speaker 01: Even though those ratings are terrible, that's what he will do, because that's what he's looking at. [00:25:13] Speaker 01: That's why the IPG study looks at things like subscribership, et cetera, et cetera, et cetera, and not viewership, because we didn't make this up. [00:25:21] Speaker 01: As the CRT and the CARP said years ago, after going through extensive hearings, [00:25:27] Speaker 01: In 2004, issued a decision saying, looking at viewer-based studies measures the wrong thing. [00:25:34] Speaker 01: It measures how many people sitting at home are watching something, not what the CSO is doing. [00:25:38] Speaker 05: Isn't that what matters when you're assessing copyright violation? [00:25:40] Speaker 05: When you're saying, to what extent has the copyright holder's right been impaired? [00:25:46] Speaker 05: It's impaired by someone watching. [00:25:50] Speaker 01: But that's not what we're looking at here. [00:25:51] Speaker 01: This is not about copyright violation. [00:25:53] Speaker 05: This is about... Isn't it about the valuation of the scope of it? [00:25:57] Speaker 01: Yeah, it's about, okay, when these CSOs pay this license to the government, the question is, for all those people who own TV shows, what share should they get of that? [00:26:07] Speaker 01: There's nothing about a copyright violation in that scenario. [00:26:10] Speaker 01: The question is, is that, okay, I own Monday Night Football. [00:26:13] Speaker 01: I had to get a big share of that. [00:26:14] Speaker 01: OK, I own Joe's Fishing. [00:26:17] Speaker 01: I should get some share. [00:26:18] Speaker 01: OK, it's not going to be as big. [00:26:19] Speaker 01: The question is, how valuable are those programs to the CSO? [00:26:24] Speaker 01: Not who's watching it at home, because it's the CSO that pays. [00:26:27] Speaker 01: It's not the people at home that pay. [00:26:30] Speaker 05: No, but it's the people at home who have effectuated the violation. [00:26:33] Speaker 01: No, there's no violations here, Your Honor. [00:26:35] Speaker 05: Well, there is. [00:26:35] Speaker 05: That's why there's forced licensing to cover. [00:26:38] Speaker 05: There would be a violation in the absence of forced licensing. [00:26:40] Speaker 05: And then the allocation of the money that comes out of the forced licensing is to the programs, I thought, according to some measure of harm to them. [00:26:48] Speaker 05: And if you've been harmed, then you're going to get us. [00:26:51] Speaker 05: I mean, there is a mismatch, which is between [00:26:56] Speaker 05: the sort of standardized valuation of the force licensing up front and then the allocation, it does seem to me there's a mismatch there. [00:27:03] Speaker 01: That's what we're trying to do here, which is extremely difficult and as everyone almost... [00:27:08] Speaker 01: involved in this, as you admitted, is rough justice at best. [00:27:11] Speaker 01: But it is not a question of violation. [00:27:13] Speaker 01: It's a question of, again, it's not about the individual at home, because they have no control over this. [00:27:17] Speaker 01: They don't pay this. [00:27:18] Speaker 01: It's the cable guy who does it. [00:27:21] Speaker 01: It's the cable guy who says, well, I could get ABC from Los Angeles, or I could get CBS from San Diego. [00:27:26] Speaker 01: What do I want to do? [00:27:27] Speaker 01: Well, CBS has got this programming for Korean programming, and I got a bunch of Koreans in my community, so I'll pay a premium for that. [00:27:34] Speaker 01: That's the thing we have to try to replicate here. [00:27:36] Speaker 01: not the person sitting at home saying, I like watching Monday Night Football more than I like watching Tuesday. [00:27:41] Speaker 05: But they're not completely divorced because the viewership is going to drive programming decisions presumably in the future. [00:27:47] Speaker 01: The testimony by the people who do this say it does not. [00:27:49] Speaker 01: And the reason why is because when the CSO makes that purchase, he has no idea in the future how much viewership there is going to be, number one. [00:27:57] Speaker 01: And number two, viewership is secondary to him [00:28:01] Speaker 01: to what his overall cornucopia of programming looks like, and is he addressing the people in his community? [00:28:08] Speaker 05: I would hope that the cable providers care about viewership because they try to provide a popular product, and so it's iterative, but it certainly has to be relevant. [00:28:17] Speaker 01: That's not their testimony. [00:28:18] Speaker 01: That's all I can tell you. [00:28:20] Speaker 01: I know I've gone over answering some of the questions. [00:28:23] Speaker 01: If I may have some time, I would appreciate it. [00:28:26] Speaker 01: Thank you. [00:28:35] Speaker 04: Morning. [00:28:35] Speaker 04: May it please the court, Molly Silfin for the Copyright Morality Board. [00:28:39] Speaker 04: I am happy to rest on our briefs or answer any questions the court has for us. [00:28:51] Speaker 05: OK. [00:28:55] Speaker 05: I found it the sanction or the ire [00:29:05] Speaker 05: at the labeling of the subpoena is a little bit odd. [00:29:08] Speaker 05: Can you explain to us why that was seen as so out of line? [00:29:12] Speaker 04: Sure. [00:29:12] Speaker 04: I'm happy to talk about that. [00:29:13] Speaker 04: So as far as the Harbor testimony went, the judges looked at this [00:29:21] Speaker 04: issue and found that both sides had sort of behaved badly with respect to this deposition. [00:29:27] Speaker 04: And they were faced with a binary choice. [00:29:31] Speaker 04: They could admit the testimony or exclude it. [00:29:35] Speaker 04: And so they chose to admit it based on the fact that SDC had [00:29:43] Speaker 04: twice asked for a subpoena and been refused based on the statutory language. [00:29:49] Speaker 04: And so the judges found it very important that it be very clear and issued an order specifically to this effect that this was not a subpoena. [00:30:01] Speaker 04: And the SDC failed to remove subpoena from the requests and issued not just one, but four of these requests. [00:30:10] Speaker 04: And the judges [00:30:13] Speaker 04: legitimately need to be able to enforce compliance with their orders. [00:30:17] Speaker 04: They have these very contentious proceedings in which there are lots of parties and they all want [00:30:25] Speaker 04: a bigger share of this pot, and the judges need to know that when they issue an order that it will be followed precisely. [00:30:33] Speaker 04: And in this case, they in the moment thought that SDC had not precisely followed the order and weighed that against the sort of bad behavior on the other side and [00:30:46] Speaker 04: chose to admit it. [00:30:47] Speaker 02: In retrospect, isn't this much ado about nothing? [00:30:50] Speaker 04: It is. [00:30:51] Speaker 02: It is. [00:30:51] Speaker 02: I mean, you still have to overcome the presumption, and the record indicates that they want to overcome the presumption. [00:30:57] Speaker 04: That's exactly right. [00:30:58] Speaker 02: It seems like a silly thing that they did. [00:31:01] Speaker 02: You vote bad, let's see who will sanction. [00:31:05] Speaker 02: That's what we're seeing. [00:31:06] Speaker 02: It looks pretty silly. [00:31:08] Speaker 02: But if you wipe that away, I don't know what difference it makes. [00:31:11] Speaker 04: I agree. [00:31:12] Speaker 04: It does not make a difference if you wipe it away. [00:31:15] Speaker 04: I disagree with calling it a sanction, but certainly it makes no difference. [00:31:19] Speaker 02: Well, whatever it was. [00:31:20] Speaker 02: It looked like you were smacking someone, and I wasn't sure why. [00:31:23] Speaker 02: But in any event, they're offended by it. [00:31:27] Speaker 02: But still, at bottom line is, I don't know what difference it makes. [00:31:31] Speaker 04: That's exactly right, Your Honor. [00:31:32] Speaker 04: In the end, it doesn't make any difference, given the presumption. [00:31:35] Speaker 05: And SEC doesn't contest the fact [00:31:40] Speaker 05: board's decision that it doesn't have support power, but I'm just curious, how is a party supposed to get evidence if they can't have a witness who's reluctant appear and be cross-examined? [00:31:56] Speaker 04: Well, I guess this is the way. [00:31:58] Speaker 04: So third party evidence, let me back up and say the statute specifically says that there [00:32:07] Speaker 04: that subpoenas are available only in rate-making proceedings, or in rate-making proceedings. [00:32:11] Speaker 05: Exactly, not only, right? [00:32:13] Speaker 05: That would make it easier. [00:32:14] Speaker 04: That is true. [00:32:15] Speaker 04: But the sort of statutory construction principle of expressio unius sort of leads to the conclusion that they do not have the subpoena power in these distribution proceedings. [00:32:32] Speaker 05: It's very strange. [00:32:33] Speaker 05: I mean, just thinking if there's a lot of money riding on it and people are, as you said, they're very contentious. [00:32:39] Speaker 05: It's just everyone's going to come in with self-serving information. [00:32:41] Speaker 05: It's hard to see how that serves your fact-finding. [00:32:45] Speaker 04: Well, there are still opposing parties here, and they still do have full discovery from other parties. [00:32:55] Speaker 06: Thank you. [00:32:56] Speaker 06: All right. [00:32:56] Speaker 06: Thank you. [00:33:01] Speaker 06: Okay, you had no time remaining, but we will give you two minutes for rebuttal. [00:33:08] Speaker 03: Thank you, Your Honor. [00:33:10] Speaker 03: We weren't twice refused in our request for subpoenas. [00:33:12] Speaker 03: We made a request, we withdrew it due to timing issues, and then we made it again, and we lost that motion. [00:33:18] Speaker 03: We don't think we should have lost, but we did. [00:33:21] Speaker 03: We then went at the Board's own suggestion and asked for a request. [00:33:24] Speaker 03: With regard to the argument that it wouldn't have made a difference, even if this [00:33:31] Speaker 03: testimony had been excluded, this deposition had been excluded. [00:33:35] Speaker 03: We think that that's speculation. [00:33:37] Speaker 03: The board's opinion says that we failed to rebut IPG's evidence. [00:33:43] Speaker 03: The evidence, the only evidence that the board was referring to there was the deposition testimony. [00:33:50] Speaker 03: We did have evidence that the board admitted, the Senate report that the board admitted for the purpose of everybody, the presumption the board found that it didn't need to determine whether [00:34:04] Speaker 03: merely offering evidence to rebut the presumption would be sufficient to – the bursting bubble theory would be sufficient to overcome the presumption. [00:34:12] Speaker 03: Moreover, in a subsequent proceeding, we now – I've always said, certainly the Senate report is not the best evidence of what the agreements are. [00:34:21] Speaker 03: The best evidence would be the agreements, which Kenneth Copeland [00:34:24] Speaker 03: which Eagle Mountain refused to produce. [00:34:28] Speaker 03: In a subsequent proceeding, we now have pursuant to a motion to compel the actual agreements. [00:34:33] Speaker 03: That's pending before the board right now. [00:34:35] Speaker 03: We will find out, eventually, how the board is going to rule on this question. [00:34:40] Speaker 03: But as to the 1999 case, we don't know yet. [00:34:43] Speaker 03: It could be on remand. [00:34:46] Speaker 03: The board could have discretion to allow us to present the actual agreements. [00:34:51] Speaker 03: But at any rate, this record is silent as to whether our evidence was sufficient to overcome the presumption. [00:34:57] Speaker 03: These are the Coppola and Eagle Mountain agreements? [00:35:00] Speaker 03: Yes, we have them now. [00:35:03] Speaker 03: And what do they say? [00:35:04] Speaker 03: I'm a little bit reluctant to answer because they are subject to a confidentiality order. [00:35:11] Speaker 03: Then you shouldn't say. [00:35:14] Speaker 03: But the parties dispute their meaning. [00:35:18] Speaker 03: They say, consistent with the Senate report, that [00:35:25] Speaker 03: Eagle Mountain, that Kenneth Copeland and Gloria Copeland, they're two different agreements, but they're basically identical, own their works of authorship. [00:35:37] Speaker 03: And then those works of authorship are defined by reference to a non-exclusive list. [00:35:43] Speaker 03: We argue that television programs, as is consistent with the Copyright Act, as is consistent with case law on the subject, [00:35:53] Speaker 03: Television programs are, in fact, works of authorship, not excluded by these agreements. [00:35:58] Speaker 03: Therefore, because these were not works for hire, Kenneth Copeland and Gloria Copeland are the copyright owners, and IPG argues the opposite. [00:36:08] Speaker 03: And we're having our day in court on that question before the Copyright Royalty Board. [00:36:12] Speaker 03: We did not get our day in court on that question in the 1999 proceedings, and that's what we're asking for. [00:36:18] Speaker 03: Beyond that is speculation. [00:36:20] Speaker 03: We would like our opportunity to present the best available evidence and argue the case on the ownership of Kenneth Copeland Programming and we would like the opportunity to challenge the board's failure to give us the value of Oral Roberts Programming. [00:36:43] Speaker 05: Just putting this in common sense terms, they represent Eagle Mountain, they don't represent Kenneth Copeland, therefore it counts if it's Eagle Mountain, it doesn't count if it's Kenneth Copeland, but if Eagle Mountain is Kenneth Copeland's agent, does it make a difference? [00:36:58] Speaker 03: So while Eagle Mountain would be Kenneth Copeland's employer, Kenneth Copeland proclaims publicly that he receives no salary for his ministry. [00:37:07] Speaker 03: Yeah, I got it. [00:37:08] Speaker 03: But he receives royalties maybe. [00:37:09] Speaker 05: So it's putting him, that's sort of why this is being resisted on the other side. [00:37:15] Speaker 05: And you're trying to make something out of that. [00:37:16] Speaker 03: And here I don't want to speculate. [00:37:18] Speaker 03: However, there certainly is evidence to suggest that [00:37:27] Speaker 03: Eagle Mountain is not the owner of the programming. [00:37:29] Speaker 03: Kenneth Copeland and Gloria Copeland personally are not claimants in the proceeding, therefore are not personally entitled to recover. [00:37:35] Speaker 03: As far as an agency relationship, the case law on this subject, I don't think that there's any evidence of an agency. [00:37:41] Speaker 03: It's an employer relationship. [00:37:44] Speaker 03: That is to say, Eagle Mountain is the employer of Kenneth and Gloria Copeland. [00:37:48] Speaker 03: that doesn't make Eagle Mountain entitled to make a claim on their behalf, the case law would suggest that the owner of an exclusive license to distribute programming would be entitled to make a claim. [00:38:03] Speaker 03: However, the evidence is not and does not show that Eagle Mountain is an exclusive licensee of the works, the works of authorship that are owned by Kenneth and Gloria Copeland. [00:38:18] Speaker 06: Okay. [00:38:19] Speaker 06: Thank you, Mr. McLean. [00:38:23] Speaker 06: Mr. Boycen, I think you were also out of town. [00:38:26] Speaker 06: We'll give you two minutes. [00:38:27] Speaker 01: Thank you. [00:38:28] Speaker 01: I'll be very brief. [00:38:29] Speaker 01: I think Judge Edwards summed up this issue entirely correctly. [00:38:32] Speaker 01: It's silly. [00:38:33] Speaker 01: With regard to the evidence that they, only evidence they do have, which is the Senate report, I want to read you the part of the Senate report that makes reference to the TV programs as opposed to reports of authorship, books, things like that. [00:38:46] Speaker 01: Kenneth Copeland Ministries subsequently stated in its response to the committee that, quote, the church records, the church, mind you, not Mr. and Mrs. Copeland, the church, records, produces, and distributes a large portion of its own media and internet products. [00:39:01] Speaker 01: In this regard, the church has full-time paid personnel devoted to the production of the church's television programming. [00:39:09] Speaker 01: That is consistent with what is in those contracts, and that is consistent. [00:39:12] Speaker 05: And the church is Eagle Monitor, or the church is Kenneth Copeland Ministries? [00:39:15] Speaker 01: It's Kenneth Copeland Industries Eagle Mountain. [00:39:19] Speaker 01: The church is the entity that IPG represents in these proceedings. [00:39:25] Speaker 01: And that is consistent with the deposition transcript. [00:39:29] Speaker 01: That is consistent with the declarations that were submitted that were not taken because of the existence of deposition transcripts. [00:39:34] Speaker 01: So there simply is nothing to this. [00:39:38] Speaker 01: And as I say, the agreements are consistent with that. [00:39:40] Speaker 01: The agreements do not have anything in it saying that Kenneth Copeland individually [00:39:44] Speaker 01: Mainline the profits from his TV this TV show or these royalties or anything like that This is all a gigantic fishing expedition that has ended up in your laps and let's her further questions. [00:39:55] Speaker 06: Thank you Thank you Miss Ilfan, I'm assuming you do not need rebuttal time or you do Okay All right, thank you the case will be submitted I