Rimini Street Inc. v. Oracle USA Inc.

STATUTORY INTERPRETATION OF “FULL COSTS”

Rimini and Ravin (“Rimini”) argue that the United States Court of Appeals for the Ninth Circuit erroneously broadened the statutory text beyond its traditional scope. They contend that the plain text of the Copyright Act is unambiguous and only requires an interpretation of the terms “full” and “costs.” “Full,” according to Rimini, means either “having all that can be contained” or “complete,” and only refers to an amount. Rimini claims that the word “costs” is a term of art modified by “full,” and is the word at issue here. Rimini contends that “costs” only encompasses taxable costs normally attributed to it in federal cost- and fee-shifting statutes enumerated in 28 U.S.C. §§ 1920 and 1821.

Rimini further argues that broadening the definition of “costs” renders superfluous the second sentence of 17 U.S.C. § 505, which states that courts may award reasonable attorney’s fees to the winning party. Rimini claims that the word “full,” interpreted this way, is not meaningless because it is still given effect by allowing the district court to award the full rates established in 28 U.S.C. § 1821, versus some lesser extent. Rimini also suggests that “cost,” “fees,” and “expenses” all denote different variants of litigation expenses such as “fees” covering attorney’s fees and “expenses” covering any expenditures not included in “costs” or “fees.” Rimini also claims that Congress adheres to this taxonomy in numerous listed statutes and will specifically indicate “costs,” “fees,” or “expenses” when they seek to denote a specific litigation expense.

Oracle USA, Inc., et al. (“Oracle”) counters that the definition of the word “full” is “containing as much or as many as is possible.” Further, Oracle claims that the Cambridge English Dictionary defines “cost” as the “amount spent for something.” Oracle suggests that, with all things considered, the meaning of “full costs” is “all expenses borne”—including those beyond taxable costs. Oracle argues that the Copyright Act does not reference 28 U.S.C. § 1920 or § 1821 and that those statutes only represent a fraction of “full costs” associated with litigation expenses. Such a reading of “costs” by Rimini would, according to Oracle, render the word “full” meaningless.

Oracle further contends that the second sentence of 17 U.S.C. § 505 concerning attorney’s fees is not superfluous by the Ninth Circuit’s interpretation; rather, it is a verification that attorney’s fees are included within the costs. Oracle counters that attorney’s fees were originally included within the common-law cost adjustments until the American Rule became commonplace, which states that each party bears its own attorney’s fees. As a result, Oracle argues, Congress amended the Copyright Act’s cost-shifting provision to reiterate that full costs could be awarded, including reasonable attorney’s fees, to the prevailing party. Oracle claims that limiting “costs” to those Section 1920 expenditures would render phrases such as “taxable costs” redundant and “nontaxable costs” oxymoronic. They also contend that 28 U.S.C. § 1920 itself references “fees” in five of the six enumerated “costs,” which shows that Congress did not give “fees” and “costs” distinct meanings.

PRECEDENTIAL TREATMENT OF “FULL COSTS”

Rimini argues that three precedential decisions articulate a clear rule that no statute will authorize the taxation of litigation expenses beyond 28 U.S.C. §§ 1920 and 1821 unless explicitly articulated in the statute. Rimini attests that in Crawford Fitting v. J.T. Gibbons, the Supreme Court held that a court may not assess non-taxable costs against a defeated party unless there is evidence to suggest congressional intent to award costs beyond Sections 1920 and 1821. Rimini then argues that the Crawford Fitting rule was reinforced in West Virginia Univ. Hospitals v. Casey, where the Supreme Court denied shifting expert witness fees as attorney’s fees or costs and stated that Sections 1920 and 1821 defined the full extent of the federal courts’ power to shift costs. Rimini notes that the Court in Casey observed that Congress provided the ability to shift such expenses in other federal statutory provisions. Rimini lastly asserts that in Arlington Central School Dist. v. Murphy, the Supreme Court likewise rejected the inclusion of expert witness fees under the Individuals with Disabilities Education Act because the law did not explicitly include the awarding of expert witness fees, and such fees were not included in attorney’s fees per Crawford Fitting.

Oracle counters by suggesting that none of Rimini’s cited cases include the term “full costs.” Oracle argues that the Court in Crawford Fitting instead was giving effect to a statutory provision that would control in a case that involves Federal Rule of Civil Procedure 54(d) and that if there were another federally enacted statute then that would control instead of §§ 1920 and 1821. Oracle also claims that the Casey ruling only addressed “attorney’s fees” and, because experts are not considered attorneys, the associated expenditures were not included in the cost-shifting provision of 42 U.S.C. § 1988 as attorney’s fees. Oracle specifies that 17 U.S.C. § 505’s attorney’s fee-clarification clause, if alone, would limit the awarding of expert fees associated with litigation, but the first sentence’s inclusion of “full costs” broadens this to allow any or all litigation expenses. Finally, Oracle argues that the Murphy decision is similar in respects to Casey in that its holding concerned whether attorney’s fees include expert fees. Oracle contends that Murphy is less relevant to the current issue because it involved State spending power, in which case a clear statement rule is needed to give States “clear notice.”

HISTORICAL CONTEXT OF “FULL COSTS”

Rimini asserts that the phrase “full costs” has reappeared in English statutes over centuries, including the first copyright statute—the Statute of Anne. Rimini suggests that the term “full cost,” which was carried forward to the English Copyright Act of 1842, was to be narrower in scope than statutes that provided “full cost and expenses.” Rimini maintains that such a construction of “full costs” was carried into subsequent legislation, including only “ordinary costs” or those between parties, as opposed to between attorneys and clients. Rimini also argues that, following the nation’s founding, courts interpreted statutes awarding “full costs” as awarding those taxable costs between parties to their full extent as opposed to awarding one-third, double, or treble costs.

Rimini posits that after the passing of the Fee Act in 1853, courts recognized that successful parties under copyright claims would be awarded all taxable disbursements or those ordinary costs but not extraordinary costs of attorney’s fees. Rimini also claims that when 17 U.S.C. § 505 was enacted in 1831, “full costs” came with the meaning “ordinary costs” or “between party and party costs” under state statutory schedules, as set in the common law and state law precedent. Also, Rimini maintains that when Congress reenacted the Copyright Act in 1909, the House Report identified the threshold limitation of $500 rewards (which was previously a bar to cost-shifting in copyright cases) as a reason for the inclusion of “full costs” language to nullify the limitation.

Oracle counters by suggesting that “full costs” were not established as expenses “between party and party” until long after both the Copyright Act of 1842 and the Statute of Anne. Oracle argues that the Statute of Gloucester, issued in 1278, allowed recovery of full costs of litigation. This included, according to Oracle, any litigation expenses to make a party whole. Oracle additionally asserts that copyright cases followed this precedent well into the late 1800s, until 1891 when Avery v. Wood & Sons confirmed “full costs” as those “costs between party and party.” Thus, Oracle reasons, Congress did not have in mind the “party and party” framework when the Copyright Act in 1831 was drafted but, instead, included recovery of attorney’s fees as represented in the Statute of Gloucester. Oracle also argues that Congress’s traditional way of limiting costs to its listed extent (as opposed to “double” or “treble” costs), in drafting a statute, was by using the phrase “single costs” and not “full costs.”

Oracle posits that Congress did not intend to adopt states’ statutory schedules at the time of the Copyright Act’s enactment in 1831 because Congress knew how to encompass state-law cost provisions but failed to do so. Oracle contends that the fee-shifting state schedules that Rimini claims Congress sought to follow are not bound by “party and party” costs but frequently include the awarding of attorney’s fees depending on jurisdiction. Oracle also claims that the inclusion of “full costs” to displace barriers set by the First Judiciary Act would seem superfluous because the act made cost awards mandatory in all recoveries.