Supreme Court's Decision in ERISA Case Overturns 4th and 11th Circuit Rule Governing Finality of Judgment.

When a United States District Court judge enters judgment in a case, but postpones for a later date determination of a party's motion for attorneys’ fees, when is the Court’s decision “final” under 28 U.S.C. § 1291, particularly when counting the 30 days by which to appeal under the Federal Rules of Appellate Procedure?  Until last week, the answer in the Fourth and Eleventh Circuit was: “It depends.”      

Over twenty-five years ago, the United States Supreme Court held that a District Court’s decision was “final” as of the date of the decision on the merits, even if a party’s motion for attorneys’ fees remained unresolved and pending for a later determination.  Budinichv. Becton Dickinson & Co., 486 U.S. 196, 108 S. Ct. 1717 (1988).   However, in both the Fourth Circuit and the Eleventh Circuit, the Courts of Appeals interpreted the Budinich decision to apply only in those situations in which attorneys’ fees were recoverable pursuant to a statute; if attorneys’ fees were sought pursuant to a contractual provision, the District Court’s decision did not become “final” until all pieces of the litigation, including any attorneys’ fees request, were decided.  CP&L Co. v. Dynergy Marketing and Trade,415 F. 3d 354 (4th Cir. 2005); Brandon, Jones, Sandall,Ziede, Kohn, Chalal & Musso, PA, 312 F. 3d 1349 (11th Circ.2002).  The Fourth and the Eleventh Circuits, along with the First, Third and Eighth Circuits, were on one side of a Circuit split. The other side, comprised of the Second, Fifth, Seventh and Ninth Circuits, considered the Budinich rule to apply regardless of whether a contract or a statute was the basis of a request for an attorneys’ fee award.  

 

Last week, the United States Supreme Court resolved the split, unanimously holding that a District Court’s decision on the merits was “final” and started the clock running for the appeal deadline, even if an attorneys’ fees award had not yet been determined, regardless of whether attorneys’ fees were sought pursuant to statute or by contract.  Ray Haluch Gravel Co. v. Central Pension Fund of the Int’l Union ofOperating Engineers, 2014 WL 127952 (Jan. 15, 2014).   Even though the case that was before the Supreme Court involved an ERISA cause of action, the holding will affect any type of civil action, ERISA–based or otherwise, on the issue of the finality of judgment and the running of the deadline for an appeal from the District Court to the Circuit Court of Appeals.