Supreme Court Confirms That Merits Decisions Are Final and Appealable Even When Contractual Fees Remain Unresolved

The U.S. Supreme Court has provided much-needed clarity and uniformity on the issue of whether contractual attorney’s fees are a part of a merits decision for the purposes of determining timeliness of a federal appeal. Ray Haluch Gravel Co. v. Central Pension Fund of International Union of Operating Engineers and Participating Employers, No. 12-992 (Jan. 15, 2014). The Court reaffirmed its earlier holding in Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988), that an unresolved application for attorney’s fees does not prevent a judgment on the merits from being considered final for purposes of the 30-day deadline to file a notice of appeal under Rule 4 of the Federal Rules of Appellate Procedure. Moreover, the Haluch Gravel decision makes clear that neither the source of a fee claim nor the fact that other fees (such as expert fees) are included in a fee request alters the time for filing an appeal from a decision on the merits.

As we noted in a previous Alert about this case, the Court held in Budinich that as a general matter, a claim for attorney’s fees is not part of the merits of the underlying action, but is generally a separate element of costs. While the Court intended in Budinich to provide a “bright line rule” that a decision on the merits disposing of all claims is final for appeal purposes even when a fee dispute remains unresolved, some circuit courts had held that contractual fee claims are not collateral to the merits. This led to significant and sometimes costly confusion, as parties often wasted time and money on potentially premature appeals to avoid waiver, or worse, had appellate rights waived because of confusion about when to file a notice of appeal.

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