Ray Haluch Gravel Co. v. Cent. Pension Fund of the Int'l Union of Operating Eng'rs & Participating Emp'rs
Ray Haluch Gravel Co. v. Cent. Pension Fund of the Int'l Union of Operating Eng'rs & Participating Emp'rs
Opinion
*179
Federal courts of appeals have jurisdiction of appeals from " final decisions" of United States district courts.
I
Petitioner Ray Haluch Gravel Co. (Haluch) is a landscape supply company. Under a collective-bargaining agreement (CBA) with the International Union of Operating Engineers, Local 98, Haluch was required to pay contributions to union-affiliated benefit funds. Various of those funds are respondents here.
*180 In 2007, respondents (Funds) commissioned an audit to determine whether Haluch was meeting its obligations under the CBA. Based on the audit, the Funds demanded additional contributions. Haluch refused to pay, and the Funds filed a lawsuit in the United States District Court for the District of Massachusetts.
The Funds alleged that Haluch's failure to make the required contributions was a violation of the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act, 1947. The Funds also sought attorney's and auditor's fees and costs, under § 502(g)(2)(D) of ERISA,
At the conclusion of a bench trial, the District Court asked the parties to submit proposed findings of fact and conclusions of law to allow the court "to consider both the possibility of enforcing [a] settlement and a decision on the merits at the same time." Tr. 50 (Feb. 28, 2011). These submissions were due on March 14, 2011. The District Court went on to observe that "[u]nder our rules ... if there is a judgment for the plaintiffs, typically a motion for attorney's fees can be filed" shortly thereafter.
The Funds initially chose to submit their fee petition at the same time as their proposed findings of fact and conclusions
*778
of law, but they later changed course. They requested an extension of time to file their "request for reimbursement of attorneys' fees and costs in the above matter." Motion
*181
to Extend Time to Submit Request for Attorneys' Fees in No. 09-cv-11607-MAP (D Mass.), p. 1. The District Court agreed; and on April 4, the Funds moved "for an [o]rder awarding the total attorneys' fees and costs incurred ... in attempting to collect this delinquency, in obtaining the audit, in protecting Plaintiffs' interests, and in protecting the interests of the participants and beneficiaries." App. 72. The motion alleged that "[t]hose fees and costs ... amount to $143,600.44," and stated that "[d]efendants are liable for these monies pursuant to" ERISA, "and for the reasons detailed in the accompanying" affidavit.
As to the merits of the claim that Haluch had underpaid, on June 17, 2011, the District Court issued a memorandum and order ruling that the Funds were entitled to certain unpaid contributions, though less than had been requested.
International Union of Operating Engineers, Local 98 Health and Welfare, Pension and Annuity Funds v. Ray Haluch Gravel Co.,
In the Court of Appeals Haluch argued that there had been no timely appeal from the June 17 decision on the merits. In its view, the June 17 decision was a final decision under § 1291, so that notice of appeal had to be filed within 30 days thereafter, see Fed. Rule App. Proc. 4(a)(1)(A). The Funds disagreed. They argued that there was no final decision until July 25, when the District Court rendered a decision
*182
on their request for attorney's fees and costs. In their view the appeal was timely as to all issues in the case. See
Digital Equipment Corp. v. Desktop Direct, Inc.,
The Court of Appeals agreed with the Funds.
Haluch sought review here, and certiorari was granted to resolve a conflict in the Courts of Appeals over whether and when an unresolved issue of attorney's fees based on a contract prevents a judgment
*779
on the merits from being final. 570 U.S. ----,
II
Title
In the ordinary course a "final decision" is one that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.
Catlin v. United States,
The Court in
Budinich
began by observing that "[a]s a general matter, at least, ... a claim for attorney's fees is not
*184
part of the merits of the action to which the fees pertain."
III
A
The Funds' principal argument for the nonfinality of the June 17 decision is that a district court decision that does not resolve a fee claim authorized by contract is not final for purposes of § 1291, because it leaves open a claim for contract *185 damages. They argue that contractual provisions for attorney's fees or costs of collection, in contrast to statutory attorney's fees provisions, are liquidated-damages provisions intended to remedy the injury giving rise to the action.
The premise that contractual attorney's fees provisions are always a measure of damages is unpersuasive, for contractual fee provisions often provide attorney's fees to prevailing defendants. See 1 R. Rossi, Attorneys' Fees § 9:25, p. 9-64 (3d ed. 2012); cf.
Gleason,
The decision in
Budinich
made it clear that the uniform rule there announced did not depend on whether the statutory or decisional law authorizing a particular fee claim treated the fees as part of the merits.
Were the jurisdictional effect of an unresolved issue of attorney's fees to depend on whether the entitlement to fees is asserted under a statute, as distinct from a contract, the *186 operational consistency and predictability stressed in Budinich would be compromised in many instances. Operational consistency is not promoted by providing for different jurisdictional effect to district court decisions that leave unresolved otherwise identical fee claims based solely on whether the asserted right to fees is based on a contract or a statute. *781 The Funds' proposed distinction also does not promote predictability. Although sometimes it may be clear whether and to what extent a fee claim is contractual rather than statutory in nature, that is not always so. This case provides an apt illustration. The Funds' notice of motion itself cited just ERISA; only by consulting the accompanying affidavit, which included an oblique reference to the CBA, could it be discerned that a contractual fee claim was being asserted in that filing. This may explain why the District Court's July 25 decision cited just ERISA, without mention or analysis of the CBA provision or any other contractual provision. 792 F.Supp.2d, at 140.
The Funds urge the importance of avoiding piecemeal litigation. The basic point is well taken, yet, in the context of distinguishing between different sources for awards of attorney's fees, quite inapplicable. The Court was aware of piecemeal litigation concerns in Budinich, but it still adopted a uniform rule that an unresolved issue of attorney's fees for the litigation does not prevent judgment on the merits from being final. Here it suffices to say that the Funds' concern over piecemeal litigation, though starting from a legitimate principle, is counterbalanced by the interest in determining with promptness and clarity whether the ruling on the merits will be appealed. This is especially so because claims for attorney's fees may be complex and require a considerable amount of time to resolve. Indeed, in this rather simple case, the fee-related submissions take up well over 100 pages in the joint appendix. App. 64-198.
The Federal Rules of Civil Procedure, furthermore, provide a means to avoid a piecemeal approach in the ordinary *187 run of cases where circumstances warrant delaying the time to appeal. Rule 54(d)(2) provides for motions claiming attorney's fees and related nontaxable expenses. Rule 58(e), in turn, provides that the entry of judgment ordinarily may not be delayed, nor may the time for appeal be extended, in order to tax costs or award fees. This accords with Budinich and confirms the general practice of treating fees and costs as collateral for finality purposes. Having recognized this premise, Rule 58(e) further provides that if a timely motion for attorney's fees is made under Rule 54(d)(2), the court may act before a notice of appeal has been filed and become effective to order that the motion have the same effect as a timely motion under Rule 59 for purposes of Federal Rule of Appellate Procedure 4(a)(4). This delays the running of the time to file an appeal until the entry of the order disposing of the fee motion. Rule 4(a)(4)(A)(iii).
In their brief in opposition to the petition for certiorari, the Funds argued that in their case this procedure would not have been applicable. Brief in Opposition 34. Rule 54(d)(2) provides that "[a] claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages." The Advisory Committee Notes to Rule 54(d)(2) state that the procedure outlined in that Rule "does not ... apply to fees recoverable as an element of damages, as when sought under the terms of a contract; such damages typically are to be claimed in a pleading and may involve issues to be resolved by a jury." Advisory Committee's 1993 Note on subd. (d), par. (2) of Fed. Rule Civ. Proc. 54, 28 U.S.C.App., pp. 240-241.
The Funds no longer rely on their reading of Rule 54 and the Advisory Committee Notes as a basis for their argument that the June 17 decision was not final under § 1291. And this is not a case in which the parties attempted to invoke Rule *782 58(e) to delay the time to appeal. Regardless of how the Funds' fee claims could or should have been litigated, *188 however, the Rules eliminate concerns over undue piecemeal appeals in the vast range of cases where a claim for attorney's fees is made by motion under Rule 54(d) (2). That includes some cases in which the fees are authorized by contract. See 2 M. Derfner & A. Wolf, Court Awarded Attorney Fees ¶ 18.01[1][c], pp. 18-7 to 18-8 (2013) (remarking that Rule 54(d)(2) applies "regardless of the statutory, contractual, or equitable basis of the request for fees," though noting inapplicability where attorney's fees are an element of damages under the substantive law governing the action).
The complex variations in statutory and contractual fee-shifting provisions also counsel against making the distinction the Funds suggest for purposes of finality. Some fee-shifting provisions treat the fees as part of the merits; some do not. Some are bilateral, authorizing fees either to plaintiffs or defendants; some are unilateral. Some depend on prevailing party status; some do not. Some may be unclear on these points. The rule adopted in Budinich ignores these distinctions in favor of an approach that looks solely to the character of the issue that remains open after the court has otherwise ruled on the merits of the case.
In support of their argument against treating contractual and statutory fee claims alike the Funds suggest, nevertheless, that it is unclear whether
Budinich
still applies where, as here, auditor's fees (or other nonattorney professional fees) are included as an incidental part of a motion for attorney's fees and costs. (In this case, auditor's fees accounted for $6,537 of the $143,600.44 requested in total.) To the extent the Funds suggest that similar fees will be claimed alongside attorney's fees only where a contractual fee claim is involved, they are incorrect. Statutory fee claims are not always limited to attorney's fees
per se
. Many fee-shifting statutes authorize courts to award additional litigation expenses, such as expert fees. See
West Virginia Univ. Hospitals, Inc. v. Casey,
B
The Funds separately contend that the June 17 decision was not final because their motion claimed some $8,561.75 in auditor's and attorney's fees (plus some modest additional expenses) incurred prior to the commencement of litigation. These included fees for the initial audit to determine whether Haluch was complying with the CBA, as well as attorney's fees incurred in attempting to obtain records from Haluch, researching fund auditing rights, drafting a letter demanding payment, and working on the initial complaint. Brief for Respondents 4-5; App. 64-67, 81-88. The Funds argue that these fees do not fall within the scope of
Budinich,
because the Court in
Budinich
referred only to fees "for the litigation in question,"
The fact that some of the claimed fees accrued before the complaint was filed is inconsequential. As this Court has observed, "some of the services performed before a lawsuit is formally commenced by
*783
the filing of a complaint are performed 'on the litigation.' "
Webb v. Dyer County Bd. of Ed.,
The fees in this case fit that description. Investigation, preliminary legal research, drafting of demand letters, and working on the initial complaint are standard preliminary
*190
steps toward litigation. See
* * *
There was no timely appeal of the District Court's June 17 order. The judgment of the Court of Appeals is reversed. The case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Reference
- Full Case Name
- RAY HALUCH GRAVEL COMPANY, Et Al., Petitioners v. CENTRAL PENSION FUND OF the INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS Et Al.
- Cited By
- 248 cases
- Status
- Published