RESPONDENT: John Wiley & Sons, Inc.
LOCATION: United States District Court for the Southern District of New York
DOCKET NO.: 15-375
DECIDED BY: Roberts Court (2016- )
LOWER COURT: United States Court of Appeals for the Second Circuit
CITATION: 579 US (2016)
GRANTED: Jan 15, 2016
ARGUED: Apr 25, 2016
DECIDED: Jun 16, 2016
Elaine J. Goldenberg - Assistant to the Solicitor General, for the United States as amicus curiae, for the respondent
E. Joshua Rosenkranz - for the petitioner
Paul M. Smith - for the respondent
Facts of the case
Academic textbook publisher John Wiley & Sons, Inc. (Wiley) owns the American copyright for textbooks and often assigns its rights to its foreign subsidiaries to publish, print, and sell its textbooks abroad. Supap Kirtsaeng is a Thai citizen who came to the United States in 1997 to study mathematics. While he was in the United States, Kirtsaeng asked friends and family in Thailand to buy the English-language versions of his textbooks there, where they were cheaper, and mail them to him. Kirtsaeng would then sell the textbooks in America, where they were worth more, reimburse his friends and family, and make a profit.
In 2008, Wiley sued Kirtsaeng for copyright infringement. The case went to the U.S. Supreme Court on the question of whether Kirtsaeng was barred from asserting an affirmative defense because the copyrighted works in question were manufactured abroad. The Court held that the affirmative defense was available to Kirtsaeng and remanded the case. Kirtsaeng won the case on remand and sought an award of attorneys' fees and reimbursement of litigation expenses pursuant to Section 505 of the Copyright Act. The district court held that Section 505 provides that the court may “in its discretion” award attorney’s fees but is not bound to do so. Because Wiley’s suit was not “frivolous” or “objectively unreasonable,” the district court held that awarding Kirtsaeng attorney’s fees would “not promote the purposes of the Copyright Act.” The U.S. Court of Appeals for the Second Circuit affirmed.
What constitutes the appropriate standard for awarding attorneys’ fees to a prevailing party under Section 505 of the Copyright Act?
Media for Kirtsaeng v. John Wiley & SonsAudio Transcription for Oral Argument - April 25, 2016 in Kirtsaeng v. John Wiley & Sons
Audio Transcription for Opinion Announcement - June 16, 2016 in Kirtsaeng v. John Wiley & Sons
John G. Roberts, Jr.:
Justice Kagan has our opinion this morning in case 15-375, Kirtsaeng versus John Wiley &Sons.
Well experienced Court watchers may be feeling some déjà vu because the lawsuit between Supap Kirtsaeng and publisher John Wiley &Sons has been to this Court before.
But if you don't spend your morning meeting SCOTUSblog, here's the one sentence recap the last round.
Wiley sued Kirtsaeng for copyright infringement but this Court agreed with Kirtsaeng that the copyright act protected his behavior.
This year the parties are back with the follow-on question.
Should Wiley have to pay the lawyers fees that Kirtsaeng incurred in defending the suit?
The District Court said no and the Court of Appeals for the Second Circuit affirmed.
We decided to hear the case because the lower courts have disagreed about how to evaluate the prevailing party's application for attorneys’ fees and copyright litigation.
The relevant statute doesn't give much guidance.
§505 of the Copyright Act says only that a District Court may award a reasonable attorney's fee to the prevailing party.
Of course, that means courts have a lot of discretion in deciding whether to order a losing party to pay a prevailing party's fees.
But discretion can't be entirely unlimited that would allow for mere whim or caprice.
In the past when we've dealt with open-ended fee shifting statutes like this one, we've provided some broad standards and guideposts derived from the purposes of the underlying law.
Here, we think that means a District Court should give substantial weight to whether the losing party's position was objectively reasonable.
That approach increases the chance that both creators and users of works meaning both plaintiffs and defendants in copyright litigation will enjoy the substantive rights that the Copyright Act provides.
The parties with a strong legal position will be able to stand on their rights in court, confident that they'll eventually recover all the money they spend on litigation and parties with a weak or unreasonable position will be deterred from litigating by the prospect that they'll have to pay their opponents’ fees in addition to their own.
Those results are generally the ones we should want.
But the reasonableness of a party's position can't be dispositive.
It's a quite important consideration but not the only one.
A Court has to think about all of the circumstances in a case before deciding whether to grant a fee application.
Just to give one example, a court might award fees against a party even though he has a reasonable position because he engaged in litigation misconduct.
So the court, while giving substantial weight to the reasonableness of a party's litigating position, must also give due consideration to other relevant factors.
The standard that the Second Circuit has used comes pretty close to this, but sometimes the court signaled that there was a kind of formal presumption against fee shifting when a party had a reasonable litigating position.
And we worry that because of language like that district courts haven't understood the full scope of their discretion, haven't understood that they can and should consider additional factors in a case not just the important one of reasonableness.
For that reason, we are vacating the decision below to give the district judge another opportunity to look at Kirtsaeng's fee application.
The opinion of the Court is unanimous.