Rimini Street v. Oracle USA: Kavanaugh Frowns on Broad Interpretation of ‘Full Costs’ Under Copyright Act

On Monday, March 4, Justice Brett Kavanaugh issued the decision for a unanimous Supreme Court in Rimini Street, Inc. v. Oracle USA, Inc., which asked whether the meaning of “full costs” under 17 U.S.C. § 505 of the U.S. Copyright Act extends to damages outside of the six categories of costs that U.S. district courts can award against a losing party as outlined in 28 U.S.C. § 1821 and 28 U.S.C. § 1920. In siding with petitioner Rimini Street, the Supreme Court held that “full costs” in the copyright litigation context are limited to Sections 1821 and 1920, reversing the Court of Appeals for the Ninth Circuit’s decision to award $12.8 million to Oracle covering litigation expenses outside of the statutory schedule of costs.

The case began in the District Court of Nevada, where Oracle first alleged that Rimini Street had infringed its copyright by copying Oracle’s software in the course of Rimini’s regular business of providing third-party software maintenance services to Oracle customers. The jury found infringement and the district judge awarded various damages, including a $12.8 million award to Oracle for litigation expenses including expert witnesses, e-discovery and jury consulting. On appeal, the Ninth Circuit upheld the $12.8 million award, though it acknowledged that the award included costs that fell outside of Sections 1821 and 1920. It cited circuit precedent to show that these costs were appropriate.

A Clear Baseline

In his opinion, Justice Kavanaugh noted that the Copyright Act is just one of more than 200 subject-specific federal statutes that authorizes the award of costs to a prevailing party in litigation. Sections 1821 and 1920 “establish a clear baseline against which Congress may legislate,” Justice Kavanaugh wrote. Congress may proceed with enacting federal statutes that authorize the award of costs outside of the categories discussed in those sections, collectively referred to as the “general costs statute.” For example, attorney’s fees and expert witness fees are available to prevailing parties in copyright litigation outside of the general costs statute. “But absent such express authority, courts may not award litigation expenses that are not specified in [Sections] 1821 and 1920,” Justice Kavanaugh wrote.

The Court pointed to three cases illustrating SCOTUS precedence on the inability of district courts to award costs outside of the general costs statute. In Crawford Fitting Co. v. J.T. Gibbons, Inc. (1987), the Supreme Court found that expert witness fees weren’t expressly referred to in Federal Rule of Civil Procedure 54(d), and thus couldn’t be awarded as part of costs. In 1991’s West Virginia University Hospitals, Inc. v. Casey, SCOTUS cited to Crawford Fitting to find that the federal statute authorizing an award of costs in civil rights litigation supplied no explicit statutory authority for an award of expert witness fees. 2006’s Arlington Central School District Board of Education v. Murphy, which asked the Supreme Court to consider whether expert witness fees could be awarded as costs under the Individuals with Disabilities Education Act, was decided along those lines as well. Similarly, the Copyright Act doesn’t include an explicit authorization of an award of costs including expert witness fees, e-discovery fees and jury consultant fees being sought by Oracle.

The Meaning of “Full”

Justice Kavanaugh then went on to describe why the Supreme Court rejected Oracle’s arguments in the case. First, Oracle had contended that the use of the word “full” in “full costs” authorizes an expansion of costs to be awarded beyond those in the general costs statute. The Supreme Court, however, found that the adjective “full” wasn’t a modifier of “costs” that changed the meaning of that word.

“The word ‘full’ operates in the phrase ‘full costs’ just as it operates in other common phrases: A ‘full moon’ means the moon, not Mars. A ‘full breakfast’ means breakfast, not lunch. A ‘full season ticket plan’ means tickets, not hot dogs. So too, the term ‘full costs’ means costs, not other expenses.” – Justice Brett Kavanaugh

Oracle also argued that the historical context of the term “full costs” in the copyright context encompassed more costs than those outlined in the general costs statute. The Court, however, noted that from 1789 to 1853, federal courts awarded costs according to the relevant laws of the state in which the case was being decided. The Fee Act of 1853, which has been carried forward into today’s general costs statute, provided a federal schedule for the award of costs. While Oracle argued that English copyright statutes, which formed the basis of the Copyright Act of 1831, allowed for the transfer of all expenses incurred during litigation, the Supreme Court found that its decision in Crawford Fitting led to the conclusion “that courts should not undertake extensive historical excavation to determine the meaning of costs statutes.” Further, the Court wasn’t persuaded that Oracle had established that, as of 1831, the term “full costs” had gained any meaning in either English or American law that covered more than the costs listed in the applicable statute. Justice Kavanaugh also pointed to Rimini’s argument that none of the more than 800 available copyright decisions between 1831 and 1976 awarded expenses other than those specified by state or federal law. Oracle had cited to zero cases involving Section 505 of U.S. copyright code where U.S. courts had awarded the kind of expenses Oracle was seeking as costs.

Finally, Oracle had argued that the word “full” in “full costs” would be unnecessary surplusage under Rimini Street’s interpretation. Oracle contended that, even if Rimini’s interpretation of “full costs” was applicable prior to 1976, that year’s Copyright Act changed the meaning of the term by making the award of costs discretionary instead of mandatory. The Supreme Court listed several reasons why this argument failed, including the finding that the Copyright Act of 1976 didn’t by itself change the meaning of the word “costs.” Further, Oracle’s interpretation of “full costs” in the first sentence of Section 505 would create its own redundancy problem with the second sentence of that statute, which authorizes the award of reasonable attorney’s fees to the prevailing party. Those fees would presumably be covered within Oracle’s interpretation of “full costs” in the preceding sentence. Justice Kavanaugh also wrote that Oracle was overstating the significance of the potential redundancy in the statute:

“If one possible interpretation of a statute would cause some redundancy and another interpretation would avoid redundancy, that difference in the two interpretations can supply a clue as to the better interpretation of a statute. But only a clue. Sometimes the better overall reading of the statute contains some redundancy.” – Justice Brett Kavanaugh.