Friday, April 9, 2021

Some Thoughts on the Google v. Oracle Decision and the Standard of Review for Civil Jury Verdicts

This week’s Supreme Court decision in Google LLC v. Oracle America, Inc. is mostly about copyright law. But there was a very interesting procedural question in the case regarding what standard of review the Court should use in connection with the jury’s verdict in favor of Google on its fair use defense. The answer is: it’s complicated. Justice Breyer’s majority opinion does say that “the ultimate ‘fair use’ question” is subject to de novo review. But he also states that “subsidiary factual questions” must be reviewed deferentially—and that deference ends up playing a very important role in the Court’s decision.

In this post I want to make two quick points about how the Court handles the standard of review issue. First, as I’ve argued in a recent article, I don’t think that Rule 50 of the Federal Rules of Civil Procedure, which provides that a court may displace a jury’s verdict only when “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue,” allows a court to declare that a certain issue (like fair use) is categorically subject to de novo review. But second, Justice Breyer’s deference to the jury on implicitly-found “subsidiary” facts leads to an analysis of fair use that—at the end of the day—isn’t so different from the sort of deferential review Rule 50 would require.

In identifying the standard of review, the Google Court uses the framework articulated in the 2018 U.S. Bank case, which involves how to select the standard of appellate review for rulings by lower court judges. U.S. Bank recognized three components of any given lower court ruling. One category—the “legal test” or the “standard” that governs a particular issue—is always reviewed de novo. Another category includes the “basic or historical facts”—the “who did what, when or where, how or why”—which are always reviewed deferentially. In the final category are “mixed questions” of law and fact—that is, “whether the historical facts found satisfy the legal test chosen.” For mixed questions, the standard of review varies. As Justice Breyer explains in Google (quoting U.S. Bank), the standard of review for a mixed question hinges on “whether answering it entails primarily legal or factual work.” Justice Breyer reasons that fair use is “a mixed question of law and fact,” and that “[i]n this case, the ultimate ‘fair use’ question primarily involves legal work.” Therefore, a court should review “the ultimate question, a legal question, de novo.”

Whatever the merits of the U.S. Bank framework in connection with a judge’s fair use finding, it does not translate well to reviewing a civil jury verdict. There is no general rule or statute that requires a particular standard of appellate review for a trial judge’s ultimate answer to a mixed question of law and fact. There is only Rule 52’s command that findings of fact must be reviewed deferentially, which is already baked into the U.S. Bank approach. For jury verdicts, however, Rule 50’s deferential “reasonable jury” standard governs—and it makes no distinction between historical facts, mixed questions, or mixed questions whose answer in a particular case entails primarily legal work. Rule 50’s deferential standard is not insurmountable. The court may, for example, identify substantive principles that confirm either the reasonableness or unreasonableness of the jury’s verdict. But the reviewing court can’t merely say “if I were hearing this case in the first instance, I would have found that this was—or was not—fair use.”

Indeed, Justice Breyer seems to recognize this. Notwithstanding the Court’s endorsement of de novo review as to the “ultimate question” of fair use, he writes that the fair use inquiry “may, of course, involve determination of subsidiary factual questions, such as ‘whether there was harm to the actual or potential markets for the copyrighted work’ or ‘how much of the copyrighted work was copied.’” And such factual issues should be reviewed deferentially. This deference becomes very important as Justice Breyer dives into the substantive factors governing fair use.

Consider how Justice Breyer states the majority’s ultimate conclusion: “We reach the conclusion that in this case, where Google reimplemented a user interface, taking only what was needed to allow users to put their accrued talents to work in a new and transformative program, Google’s copying of the Sun Java API was a fair use of that material as a matter of law.” One of the key premises in this statement—that Google had taken “only what was needed to allow users to put their accrued talents to work” stems from the Court’s deference to a factual finding that it found to be implicit in the jury’s verdict. As Justice Breyer explains:

Google’s basic objective was not simply to make the Java programming language usable on its Android systems. It was to permit programmers to make use of their knowledge and experience using the Sun Java API when they wrote new programs for smartphones with the Android platform. In principle, Google might have created its own, different system of declaring code. But the jury could have found that its doing so would not have achieved that basic objective.

So it was deference to the jury’s verdict—not de novo review—that established one of the basic premises leading to the Court’s ultimate conclusion regarding fair use. Put another way, Justice Breyer would have had to write a very different opinion on the substance of Google’s fair use defense if the jury’s verdict had gone against Google. In that scenario, he would have had to deem it unreasonable for a jury to have found that Google could have achieved this objective by creating its own system of declaring code. Or he would have had to formulate a different principle to explain why Google’s use was fair—one that didn’t hinge on Google having taken “only what was needed to allow users to put their accrued talents to work.” This is not how de novo review usually operates. The crux of de novo review is that it shouldn’t matter what conclusion was reached below. But the Court’s deference to implicitly-found subsidiary facts shows that the jury’s verdict matters quite a lot.

Looking forward, then, the Google decision may force courts to wrestle with what sort of inferred “subsidiary facts” must be given deference when reviewing a civil jury verdict. I’m skeptical that venturing into that thicket is likely to be productive, as compared to simply following Rule 50’s “reasonable jury” standard.


Federal Rules of Civil Procedure, Recent Decisions, Supreme Court Cases, Web/Tech | Permalink


The Federal Circuit is used to the mode analysis it did here, which the Supreme Court blessed. When reviewing a black-box jury verdict on an ultimate issue of law based upon underlying issues of fact, the Federal Circuit presumes that the jury resolved all of those issues in favor of the verdict winner and then reviews those presumed factual determinations for substantial evidence. See WBIP, LLC v. Kohler Co., 829 F. 3d 1317, 1326 (Fed. Cir. 2016). Fair use only comes up infrequently at the Federal Circuit, as the Federal Circuit does not have exclusive jurisdiction over copyright appeals. But the issue of whether a patent claim is obvious, which comes up very often at the Federal Circuit, is also a question of law that is based upon underlying questions of fact. District courts routinely send the ultimate question of obviousness to juries.

Posted by: Guest | Apr 18, 2021 11:31:19 AM

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