Full Moon, Full Breakfast, and Full Costs

Photo Credit: Mark Theoharis, How Much Are Legal Fees? – Costs of Hiring Different Types of Lawyers, Money Crashers, https://www.moneycrashers.com/legal-fees-hiring-lawyer-costs (last visited Mar. 20, 2019).

By: Gray Gilmore
Associate Editor, American Journal of Trial Advocacy

Because of the high cost of litigation, Congress allows for a party to recover costs as awards. Specifically, there are six categories of litigation expenses that qualify as costs, and parties are limited to these categories unless another federal statute provides otherwise.[1] Nowhere in the general costs statute allows for a cost award to include litigation expenses, such as jury consulting, expert witnesses, and e-discovery.[2]

However, in a recent Supreme Court case, Rimini Street, Inc. v. Oracle USA, Inc.,  Oracle argues that these litigation expenses should be included in their award because it falls under the Copyright Act’s phrase “full costs.”[3] In litigation surrounding a copyright, the Copyright Act gives federal courts discretion to allow recovery of “full costs.”[4] The issue in the case becomes whether this language of “full costs” allows a court to award litigation expenses above and beyond Congress’s  general “costs” in sections 1821 and 1920.[5] Justice Kavanaugh clarifies this issue through the comparison of “full costs” to a “full moon.”[6]

In Rimini Street, Inc., Oracle sued Rimini Street for copying software belonging to Oracle without properly licensing it.[7] After a jury found Rimini guilty of copyright infringement and in violation of several computer access statutes, the federal district court awarded Oracle $50 million in damages, $28.5 million in attorneys’ fees, $4.95 million in costs, and “$12.8 million for litigation expenses such as expert witnesses, e-discovery, and jury consulting.”[8] On appeal, the Ninth Circuit affirmed the $12.8 million award, even though it is not included in one of Congress’s six categories, because section 505 allows a federal district court to award “full costs” at their discretion.[9]

In writing on behalf of the Supreme Court, Justice Kavanaugh points to three precedent Supreme Court cases that establish the rule that courts cannot award litigation expenses beyond those specified in sections 1821 and 1920.[10] The first, Crawford Fitting Co. v. J. T. Gibbons, Inc.,[11]addressed whether expert witness fees could be included as “costs” under Rule 54(d) of the Federal Rules of Civil Procedure.[12] The Supreme Court held that “a federal court is bound by the limit of §1821(b), absent contract or explicit statutory authority to the contrary.”[13]

In accordance with Crawford, the second case, West Virginia University Hospitals, Inc. v. Casey,[14] and the third case, Arlington Central School District Board of Education v. Murphy,[15] help establish the clear rule that “a statute awarding ‘costs’ will not be construed as authorizing an award of litigation expenses beyond the six categories listed in §§1821 and 1920, absent an explicit statutory instruction to that effect.”[16] Consequently, Oracle could not be awarded the $12.8 million in litigation expenses because the Copyright Act does not expressly authorize awards beyond the six specific categories in the general costs statute.[17]

Moreover, it does not matter that the language of the Copyright Act is “full costs” rather than just “costs.” According to the Court, “full” is a term of quantity or amount and does not alter the meaning of the word “costs.”[18] Rather, “full” is “an adjective that means the complete measure of the noun it modifies.”[19] Justice Kavanaugh then drives the point home with the comparison to other phrases that include the word “full” as an adjective:

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. The dispute here, therefore, turns on the meaning of the word “costs.” And as we have explained, the term “costs” refers to the costs generally available under the federal costs statute—§§1821 and 1920. “Full costs” are all the costs generally available under that statute.[20]

            Secondly, the phrase “full costs,” whatever the historical significance, is to be interpreted by reference to the general costs statute based upon the decision in Crawford Fitting.[21] Oracle argued that in 1831, Congress adopted “full costs” from the copyright statute in England and that Congress intended the phrase to override any costs statute adopted at a later date.[22] Kavanaugh emphasized the importance of case law—pointing to the Crawford Fitting decision to show that there should not be “extensive historical excavation.”[23] Moreover, there had been no federal court decisions awarding litigation expenses beyond the costs specified in applicable state or federal statutes between the years of 1831 and 1976.[24]

Finally, the Court emphasized that “full costs” would be redundant if it was interpreted how Oracle desired it to be interpreted.[25] The Copyright Act provides, “[e]xcept as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”[26] If “full costs” was meant to cover all expenses, not just the six, then the second sentence of section 505 would just repeat what the first sentence already covers.[27] As a result, the Supreme Court reversed and remanded this case.[28]

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[1] 28 U.S.C.S. §§ 1821, 1920 (LexisNexis 2019); Rimini St., Inc. v. Oracle USA, Inc., No. 17-1625, 2019 U.S. LEXIS 1733, at *8 (Mar. 4, 2019).

[2] See 28 U.S.C.S. § 1920 (LexisNexis 2019) (limiting fees and costs).

[3] Rimini St., Inc., 2019 U.S. LEXIS 1733, at *4; 17 U.S.C.S. § 505 (LexisNexis 2019).

[4] Rimini St., Inc., 2019 U.S. LEXIS 1733, at *4.

[5] Id.

[6] Id. at *11.

[7] Id. at *5.

[8] Id. at *6.

[9] Id. at *6; 17 U.S.C.S. § 505 (LexisNexis 2019).

[10] Rimini St., Inc., 2019 U.S. LEXIS 1733, at *8.

[11] 482 U.S. 437 (1987).

[12] Rimini St., Inc. v. Oracle USA, Inc., No. 17-1625, 2019 U.S. LEXIS 1733, at *8 (Mar. 4, 2019).

[13] Id. (quoting Crawford Fitting, 482 U.S. at 439) (internal quotation marks omitted).

[14] 499 U.S. 83 (1991).

[15] 548 U.S. 291 (2006).

[16] Rimini St., Inc., 2019 U.S. LEXIS 1733, at *10.

[17] Id.

[18] Id. at *11.

[19] Id.

[20] Id. (emphasis omitted).

[21] Id. at *13.

[22] Rimini St., Inc. v. Oracle USA, Inc., No. 17-1625, 2019 U.S. LEXIS 1733, at *12-13 (Mar. 4, 2019).

[23] Id. at *13.

[24] Id. at *15. There were over 800 copyright decisions from the time the Copyright Act was adopted to the year the Copyright Act was last significantly amended. Id. No federal court decision awarded expert witness fees until the Ninth Circuit in 2005. Id.

[25] Id. at *16-17.

[26] 17 U.S.C.S. § 505 (LexisNexis 2019).

[27] Rimini St., Inc., 2019 U.S. LEXIS 1733, at *17.

[28] Id. at *18.