Argument analysis: Quiescent bench dubious about broad fee awards in copyright cases

The week’s second argument, Rimini Street v. Oracle USA, has the justices considering the scope of fees available to a prevailing party in litigation under the federal Copyright Act. Sitting for the second week without Justice Ruth Bader Ginsburg, the bench was remarkably quiescent. To the extent the justices evinced any strong interest in the case, they seemed skeptical about allowing broad fee awards.

The case calls for a reading of Section 505 of the Copyright Act, which defines the recovery of a prevailing party under the act. That provision states: “In any civil action under [the Copyright Act], the court in its discretion may allow the recovery of full costs by or against any party…. [T]he court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.” The problems in understanding that language arise from a general provision in 28 U.S.C. § 1920, which defines a relatively narrow set of “taxable costs” customarily awarded to the prevailing party in federal court. The question for the court here is whether the “costs” described in Section 505 are the narrow set of costs that are taxable under Section 1920 or instead a broader set of costs that would come closer to compensating a party for all of its litigation costs. In this case, for example, the lower court relied on Section 505 to award more than $12 million of nontaxable costs.

The backdrop of the case also involves the so-called “American rule,” under which even a prevailing party ordinarily bears the bulk of its litigation costs, including attorney’s fees. The universal practice in federal courts is to limit any broader recovery, beyond the narrow costs taxable under Section 1920, to cases in which Congress explicitly has authorized a broader award. The issue in this case is whether the language in Section 505 authorizing an award of “full” costs is enough to justify courts in going beyond that standard to award nontaxable costs.

The questioning was remarkably desultory, particularly during the presentation of Mark Perry, who appeared on behalf of the defendant, Rimini, to seek reversal of the broad award of costs. For the most part, the justices blandly asked counsel to respond to the arguments of the other side. Only two of the justices spoke with sufficient incisiveness to suggest a strong perspective on the case.

On the textual question, Justice Elena Kagan was particularly unreceptive to the argument of Paul Clement, representing Oracle and thus seeking to defend the broad award of costs. After Clement agreed with Kagan that the sole basis for the argument was the insertion of the word “full” as a modifier of costs, she retorted, “So we decided a case earlier this year on the basis of the legal proposition that adjectives modify nouns.” Presumably she was referring to the opinion of Chief Justice John Roberts for a unanimous Court in Weyerhauser Co. v US Fish & Wildlife Service. Interpreting a reference to “critical habitat” in that case, Roberts explained:

According to the ordinary understanding of how adjectives work, “critical habitat” must also be “habitat.” Adjectives modify nouns—they pick out a subset of a category that possesses a certain quality. It follows that “critical habitat” is the subset of “habitat” that is “critical” to the conservation of an endangered species.

Applied here, Kagan suggested, that analysis should “kill you…. In other words, ‘full’ can only modify costs as defined in 1920.” Continuing to press the point, she explained:

You said, if [the statute] just said costs, we would all understand that it was the term of art [referring to costs taxable under Section 1920]. And then you say that by adding the word “full,” … you want to use the word “full” to suggest that it’s not the 1920 costs we’re talking about at all. It’s some different kind of costs.

Justice Sonia Sotomayor was similarly unreceptive, though for more practical reasons. For her, the problem with Clement’s reading of Section 505 was that it was “so open-ended that I don’t have a way for judges to exercise their discretion in a reasonable manner.” Ridiculing the likely consequences, she suggested that courts commonly would authorize awards to cover the costs of “the babysitter for the witness who has to come to court” or even “experts like a body language reader.”

Although it probably sheds little light on the likely outcome, I should mention what strikes me as the most interesting part of the argument, an interchange between Perry and Sotomayor early in the argument. Perry was trying to make the point that Clement’s argument would fly in the face of traditional practice in copyright cases, which until this recent dispute arose had not involved an award of nontaxable costs. At one point, he asserted that “[f]rom 1831 to 1976, there are 858 copyright cases awarding costs. Not one case has ever awarded any cost not on a statutory schedule under either state law or federal law.” Sotomayor called him on the assertion, apparently not set out in Perry’s brief: “Could you point me to where in your brief or an amici accounted for those 800 cases?” Perry, clearly armed for the point, explained that “[w]e [had] pointed out in the reply brief that my friends on the other side and all of their amici had not cited a single case on their point. And to confirm that we were right, I went through and had my team read every single one of them.”

I have little reason to think the justices will regard Rimini Street as one of their weightier matters. My strong impression from the argument is that we should expect a consensus limiting the permissible costs to the traditional “taxed” costs set out in Section 1920, and that we should expect an early opinion explaining that result.

Editor’s Note: Analysis based on transcript of oral argument.