Kirtsaeng v. John Wiley & Sons, Inc.

Decision Date16 June 2016
Docket NumberNo. 15–375.,15–375.
Citation118 U.S.P.Q.2d 1770,195 L.Ed.2d 368,136 S.Ct. 1979
CourtU.S. Supreme Court
Parties Supap KIRTSAENG, dba Bluechristine99, Petitioner v. JOHN WILEY & SONS, INC.

E. Joshua Rosenkranz, New York, NY, for Petitioner.

Paul M. Smith, Washington, DC, for Respondent.

Elaine J. Goldenberg for the United States as amicus curiae, by special leave of the Court, supporting the respondent.

Sam P. Israel, Eleonora Zlotnikova, Sam P. Israel, P.C., New York, NY, E. Joshua Rosenkranz, Annette L. Hurst, Lisa T. Simpson, Thomas M. Bondy, Andrew D. Silverman, Christopher J. Cariello, Orrick, Herrington & Sutcliffe LLP, New York, NY, for Petitioner.

Paul M. Smith, Matthew S. Hellman, Ishan K. Bhabha, Jenner & Block LLP, Washington, DC, for Respondent.

Justice KAGAN

delivered the opinion of the Court.

Section 505 of the Copyright Act provides that a district court "may ... award a reasonable attorney's fee to the prevailing party." 17 U.S.C. § 505

. The question presented here is whether a court, in exercising that authority, should give substantial weight to the objective reasonableness of the losing party's position. The answer, as both decisions below held, is yes—the court should. But the court must also give due consideration to all other circumstances relevant to granting fees; and it retains discretion, in light of those factors, to make an award even when the losing party advanced a reasonable claim or defense. Because we are not certain that the lower courts here understood the full scope of that discretion, we return the case for further consideration of the prevailing party's fee application.


Petitioner Supap Kirtsaeng, a citizen of Thailand, came to the United States 20 years ago to study math at Cornell University. He quickly figured out that respondent John Wiley & Sons, an academic publishing company, sold virtually identical English-language textbooks in the two countries—but for far less in Thailand than in the United States. Seeing a ripe opportunity for arbitrage, Kirtsaeng asked family and friends to buy the foreign editions in Thai bookstores and ship them to him in New York. He then resold the textbooks to American students, reimbursed his Thai suppliers, and pocketed a tidy profit.

Wiley sued Kirtsaeng for copyright infringement, claiming that his activities violated its exclusive right to distribute the textbooks. See 17 U.S.C. §§ 106(3)

, 602(a)(1). Kirtsaeng invoked the "first-sale doctrine" as a defense. That doctrine typically enables the lawful owner of a book (or other work) to resell or otherwise dispose of it as he wishes. See § 109(a). But Wiley contended that the first-sale doctrine did not apply when a book (like those Kirtsaeng sold) was manufactured abroad.

At the time, courts were in conflict on that issue. Some thought, as Kirtsaeng did, that the first-sale doctrine permitted the resale of foreign-made books; others maintained, along with Wiley, that it did not. And this Court, in its first pass at the issue, divided 4 to 4. See Costco Wholesale Corp. v. Omega, S.A., 562 U.S. 40, 131 S.Ct. 565, 178 L.Ed.2d 470 (2010)

(per curiam ). In this case, the District Court sided with Wiley; so too did a divided panel of the Court of Appeals for the Second Circuit. See 654 F.3d 210, 214, 222 (2011). To settle the continuing conflict, this Court granted Kirtsaeng's petition for certiorari and reversed the Second Circuit in a 6–to–3 decision, thus establishing that the first-sale doctrine allows the resale of foreign-made books, just as it does domestic ones. See Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. ––––, ––––, 133 S.Ct. 1351, 1355–1356, 185 L.Ed.2d 392 (2013).

Returning victorious to the District Court, Kirtsaeng invoked § 505

to seek more than $2 million in attorney's fees from Wiley. The court denied his motion. Relying on Second Circuit precedent, the court gave "substantial weight" to the "objective reasonableness" of Wiley's infringement claim. See No. 08–cv–07834 (S.D.N.Y., Dec. 20, 2013), App. to Pet. for Cert. 18a, 2013 WL 6722887, *4. In explanation of that approach, the court stated that "the imposition of a fee award against a copyright holder with an objectively reasonable"—although unsuccessful—"litigation position will generally not promote the purposes of the Copyright Act." Id., at 11a (quoting Matthew Bender & Co. v. West Publishing Co., 240 F.3d 116, 122 (C.A.2 2001) (emphasis deleted)). Here, Wiley's position was reasonable: After all, several Courts of Appeals and three Justices of the Supreme Court had agreed with it. See App. to Pet. for Cert. 12a. And according to the District Court, no other circumstance "overr[o]de" that objective reasonableness, so as to warrant fee-shifting. Id., at 22a. The Court of Appeals affirmed, concluding in a brief summary order that "the district court properly placed ‘substantial weight’ on the reasonableness of [Wiley's] position" and committed no abuse of discretion in deciding that other "factors did not outweigh" the reasonableness finding. 605 Fed.Appx. 48, 49, 50 (C.A.2 2015).

We granted certiorari, 577 U.S. ––––, 136 S.Ct. 890, 193 L.Ed.2d 783 (2016)

, to resolve disagreement in the lower courts about how to address an application for attorney's fees in a copyright case.1

IISection 505

states that a district court "may ... award a reasonable attorney's fee to the prevailing party." It thus authorizes fee-shifting, but without specifying standards that courts should adopt, or guideposts they should use, in determining when such awards are appropriate.

In Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)

, this Court recognized the broad leeway § 505 gives to district courts—but also established several principles and criteria to guide their decisions. See id., at 519, 114 S.Ct. 1023 (asking "what standards should inform" the exercise of the trial court's authority). The statutory language, we stated, "clearly connotes discretion," and eschews any "precise rule or formula" for awarding fees. Id., at 533, 534, 114 S.Ct. 1023. Still, we established a pair of restrictions. First, a district court may not "award[ ] attorney's fees as a matter of course"; rather, a court must make a more particularized, case-by-case assessment. Id., at 533, 114 S.Ct. 1023. Second, a court may not treat prevailing plaintiffs and prevailing defendants any differently; defendants should be "encouraged to litigate [meritorious copyright defenses] to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement." Id., at 527, 114 S.Ct. 1023. In addition, we noted with approval "several nonexclusive factors" to inform a court's fee-shifting decisions: "frivolousness, motivation, objective unreasonableness[,] and the need in particular circumstances to advance considerations of compensation and deterrence." Id., at 534, n. 19, 114 S.Ct. 1023. And we left open the possibility of providing further guidance in the future, in response to (and grounded on) lower courts' evolving experience. See id., at 534–535, 114 S.Ct. 1023 ; Martin v. Franklin Capital Corp., 546 U.S. 132, 140, n., 126 S.Ct. 704, 163 L.Ed.2d 547 (2005) (noting that Fogerty was not intended to be the end of the matter).

The parties here, though sharing some common ground, now dispute what else we should say to district courts. Both Kirtsaeng and Wiley agree—as they must—that § 505

grants courts wide latitude to award attorney's fees based on the totality of circumstances in a case. See Brief for Petitioner 17; Brief for Respondent 35. Yet both reject the position, taken by some Courts of Appeals, see supra, at 1984, n. 1, that Fogerty spelled out the only appropriate limits on judicial discretion—in other words, that each district court should otherwise proceed as it sees fit, assigning whatever weight to whatever factors it chooses. Rather, Kirtsaeng and Wiley both call, in almost identical language, for "[c]hanneling district court discretion towards the purposes of the Copyright Act." Brief for Petitioner 16; see Brief for Respondent 21 ("[A]n appellate court [should] channel a district court's discretion so that it ... further[s] the goals of the Copyright Act"). (And indeed, as discussed later, both describe those purposes identically. See infra, at 1986.) But at that point, the two part ways. Wiley argues that giving substantial weight to the reasonableness of a losing party's position will best serve the Act's objectives. See Brief for Respondent 24–35. By contrast, Kirtsaeng favors giving special consideration to whether a lawsuit resolved an important and close legal issue and thus "meaningfully clarifie[d]" copyright law. Brief for Petitioner 36; see id., at 41–44.

We join both parties in seeing a need for some additional guidance respecting the application of § 505

. In addressing other open-ended fee-shifting statutes, this Court has emphasized that "in a system of laws discretion is rarely without limits." Flight Attendants v. Zipes, 491 U.S. 754, 758, 109 S.Ct. 2732, 105 L.Ed.2d 639 (1989) ; see Halo Electronics, Inc. v. Pulse Electronics, Inc., ––– U.S. ––––, ––––, 136 S.Ct. 1923, 1931, ––– L.Ed.2d ––––, 2016 WL 3221515 (2016)

ante, at 8. Without governing standards or principles, such provisions threaten to condone judicial "whim" or predilection. Martin, 546 U.S., at 139, 126 S.Ct. 704 ; see also ibid. ("[A] motion to [a court's] discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles" (quoting United States v. Burr, 25 F.Cas. 30, 35 (No. 14,692d) (C.C.Va.1807) (Marshall, C. J.))). At the least, utterly freewheeling inquiries often deprive litigants of "the basic principle of justice that like cases should be decided alike," Martin, 546 U.S., at 139, 126 S.Ct. 704 —as when, for example, one judge thinks the parties' "motivation [s]" determinative and another believes the need for "compensation" trumps all else, Foge...

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