The U.S. Supreme Court will hear oral argument next month in a dispute over more than $2 million in unpaid legal fees stemming from seven years of litigation.
According to court filings, lawyers from Orrick, Herrington & Sutcliffe say they’re entitled to $1.9 million for their representation of Thai bookseller Supap Kirtsaeng against copyright claims by publisher John Wiley & Sons, which included a prior trip to the Supreme Court in 2013.
Because the firm agreed to take Kirtsaeng’s case pro bono, Orrick will go unpaid if the Supreme Court appeal isn’t successful, according to Joshua Rosenkranz, the Orrick partner representing Kirtsaeng. Kirtsaeng also owes over $100,000 to his trial attorney, according to court briefs filed in the case.
Like any attorneys’ fee case, there’s a backstory. In 2006, Kirtsaeng was a graduate student in mathematics at the University of Southern California, when he spied a business opportunity: New copies of textbooks were considerably cheaper than identical copies sold in the U.S., so Kirtsaeng asked friends and relatives to purchase textbooks in Bangkok and mail them to him in California, according to court documents.
Kirtsaeng then sold the books online at a discount, bringing in around $1 million in revenue over two years, according to an earlier Second Circuit Opinion.
In 2008, Wiley sued Kirstaeng for copyright infringement. Kirtsaeng’s lawyers claimed his business model was legal under the “first sale” doctrine, which provides that a person who legally purchases a copyrighted work also receives the right to sell that particular work.
Wiley argued the rule didn’t apply to works manufactured abroad. The book publisher won at trial, and won again on appeal at the Second Circuit Court of Appeals.
But in 2013, by a vote of 6-3, the Supreme Court ruled in Kirtsaeng’s favor, holding that the first sale rule applied to U.S. works manufactured abroad. At the Court, Wiley was represented by Gibson Dunn’s Theodore Olson.
Kirtsaeng was represented by Rosenkranz: “We were the odds-on loser by all prognostications going in,” he said in an interview. “Every court of appeal that had decided the issue had gone against us. Every major copyright treatise was against us.”
The victory was a landmark change for publishers. The case also had wider copyright implications. The Court’s opinion, authored by Justice Stephen Breyer , noted that $2.3 trillion worth of goods were imported in 2011, and likely more than $220 billion worth of copyrighted goods.
After the decision, Kirtsaeng asked the trial court for attorneys’ fees. Relying on a rule that copyright defendants aren’t entitled to fees as long as the claims are "objectively reasonable,” the court rejected Kirtsaeng’s request, and the Second Circuit affirmed.
Kirtsaeng and Rosenkranz are now back at the Supreme Court to challenge that rule.
In a brief filed on Thursday, Wiley, represented by Jenner & Block partner Paul Smith, argued that because Orrick agreed to take the case pro bono, Kirtsaeng wasn’t the one bearing the risk. Moreover, Wiley contends, Orrick overcharged.
Of the $1.9 million Orrick is seeking, Wiley’s lawyers wrote: “That figure was more than six times the $300,000 charged by Wiley’s Supreme Court counsel inKirtsaeng I, and included, for example, $531,085.25 for time spent soliciting and coordinating amici support from sympathetic business groups, as well as 330.6 hours of argument preparation time for counsel other than the arguing counsel.”
On Friday, Wiley declined to comment on the case. Smith couldn’t be reached.
“We were bearing our own costs, knowing there was virtually no prospect of a fee recovery under the Second Circuit’s impossible standard,” Rosenkranz wrote in an email, explaining the size of Orrick’s bill. “But we were in it to win it. It takes an extraordinary effort to win a case that everyone thinks you are going to lose.”
If Kirtsaeng is successful, Rosenkranz said, the case will once again go back to the trial court to determine whether the $1.9 million bill and the bills from Rosenkranz’s other attorneys are appropriate.
Rosenkranz said he doesn’t expect the case will break cleanly along ideological lines.
“I don’t think of this as a deeply ideological issue,” he said. “Justices tend to decide attorneys’ fee issues based upon the language of the statute and the policies that Congress was trying to advance.”
According to his Facebook page, Kirtsaeng graduated with a PhD in mathematics from USC in 2010 , and is now back in Thailand. Asked whether he would return to the U.S. for oral argument next month, Rosenkranz said Kirtsaeng’s teaching obligations have him tied down.
The case is Kirtsaeng v. John Wiley & Sons, Inc., No. 15-375. It’s scheduled for oral argument on April 25.