Why it matters: On January 15, 2016, the U.S. Supreme Court granted certiorari in the case of Supap Kirtsaeng DBA Bluechristine99 v. John Wiley & Sons, Inc., agreeing to review the issue of what constitutes the appropriate standard for awarding attorneys' fees to prevailing parties under Section 505 of the Copyright Act. The Court took the case due to, among other things, what appears to be a bona fide circuit split in the interpretation and application of Section 505. If the case sounds familiar, it is. In 2013, the Court ruled that the actions of Supap Kirtsaeng, a Thai national who had purchased foreign editions of textbooks overseas at low prices and sold them in the United States for a profit, were protected by the "first-sale" doctrine under the Copyright Act and that Kirtsaeng was therefore not liable for copyright infringement in a suit brought by academic textbook publisher John Wiley & Sons. Now Kirtsaeng—the prevailing party in the dispute—is before the Court again, seeking his "reasonable" attorneys' fees from that litigation.
Detailed discussion: On January 15, 2016, the U.S. Supreme Court granted certiorari in the case of Supap Kirtsaeng DBA Bluechristine99 v. John Wiley & Sons, Inc., agreeing to review the single question presented of "[w]hat is the appropriate standard for awarding attorneys' fees to a prevailing party under § 505 of the Copyright Act?" This constitutes the second time that the Court has granted certiorari in connection with this case. In 2013, the Court reversed the decisions of the district court and the Second Circuit and held that the actions of Supap Kirtsaeng (Petitioner), a citizen of Thailand who purchased foreign editions of textbooks overseas at a low price and then resold them in the United States for a profit, were protected by the "first-sale" doctrine so as not to constitute copyright infringement under the Copyright Act of 1976 (Copyright Act). Since that decision, Petitioner—as the prevailing party—has been unsuccessfully attempting to collect his Section 505 "reasonable" attorneys' fees incurred in connection with the litigation. Both the district court and the Second Circuit declined to award him his fees, and the Supreme Court agreed to take the case due to, among other considerations, a split among the circuits on the issue.
Section 505 of the Copyright Act provides that a "court may ... award a reasonable attorney's fee to the prevailing party." In his Petition for Writ of Certiorari (Writ), the Petitioner pointed to a split in the circuits regarding the interpretation of Section 505 and argued that the split adversely affected the outcome of his fee award based solely on where he was originally sued: "Had Kirtsaeng prevailed in the Ninth or Eleventh Circuit, he would have obtained his reasonable attorneys' fees. Had he prevailed in the Fifth or Seventh Circuits, he would have had a rebuttable presumption in favor of obtaining his attorneys' fees. Had he prevailed in the Third, Fourth, or Sixth Circuits, Kirtsaeng very likely would have obtained his attorneys' fees. Unluckily for Kirtsaeng, Wiley sued him in the Southern District of New York, and so when Kirtsaeng prevailed, he prevailed in the Second Circuit, where Second Circuit precedent meant Kirtsaeng could not obtain his attorneys' fees."
The Petitioner argued in the Writ that the circuits are "in utter disarray" and "hopelessly split" on the appropriate standard for awarding attorneys' fees under Section 505 ("Eight courts of appeals have split at least four ways in considering … fee requests under § 505"). For example, the Petitioner argued that the Second Circuit, unlike the other circuits, looks to case law precedent and places "substantial weight" on whether the losing party's claim or defense was "objectively unreasonable," i.e., whether it was "clearly without merit or devoid of legal or factual basis." In the Petitioner's case, the Second Circuit upheld the district court's denial of attorneys' fees—even though many factors weighed in favor of awarding them—because " 'th[o]se factors did not outweigh the "substantial weight" afforded to John Wiley and Sons' objective reasonableness.' " Petitioner argued in the Writ that "[b]y definition, a claim or defense that is 'unreasonable' is one that is outside the norm of a usual claim, so, by applying a rule that attorneys' fees are generally not awarded except when the losing party's claim or defense was unreasonable, the Second Circuit has created a presumption againstawarding fees."
By contrast, the Petitioner cited applicable circuit case law precedent to demonstrate that, in determining Section 505 awards (a) the Ninth and Eleventh Circuits ask only whether "the prevailing party's claim or defense furthered the interests of the Copyright Act, with no presumptions one way or the other"; (b) the Fifth and Seventh Circuits "apply a presumption in favor of a fee award for prevailing parties"; and (c) the Third, Fourth, and Sixth Circuits have "forged yet another path" and rely on the four "non-exclusive factors" listed in the Supreme Court's 1994 decision in Fogerty v. Fantasy, Inc.: " 'frivolousness, motivation, objective unreasonableness ...[,] and ... considerations of compensation and deterrence.' "
For these and other reasons, the Petitioner urged the Supreme Court to agree to hear the case, arguing that "[b]ecause the Second Circuit's decision splits with the approaches of the other courts of appeals and is inconsistent with this Court's precedent, this Court should grant cert to address the proper standard for awarding fees under the Copyright Act." The Supreme Court agreed. As always, we will be watching and report back.
Click here to read the Petition for Writ of Certiorari in Supap Kirtsaeng DBA Bluechristine99 v. John Wiley & Sons, Inc.