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Wednesday, January 29, 2014

In a decision issued on January 15, the Supreme Court clarified that a pending motion for attorney’s fees does not prevent a judgment on the merits from becoming final for appellate purposes under 28 U.S.C. §1291, even when those fees are contractually provided for.

Ray Haluch Gravel Co. v. Central Pension Fund of the International Union of Operating Engineers & Participating Employers involved the timeliness of an appeal of a judgment against an employer in an ERISA case. The employer was sued by a union for failing to make contributions, required under a collective bargaining agreement, to various benefit funds. The agreement included a provision requiring the employer to pay any attorney’s fees incurred by the union in collecting payments owed to the benefit funds.

The district court entered judgment on the merits, awarding the union far less than it had requested, and more than a month later issued another order awarding attorney’s fees pursuant to the agreement. The union appealed the judgment on the merits, but waited until after the district court entered its fee award to do so.

On appeal to the First Circuit, the employer contended that the union’s appeal was untimely, as it had not filed its notice of appeal until almost two months after the entry of the merits judgment. Although the Supreme Court had held in Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988), that outstanding petitions for attorney’s fees do not prevent judgments from becoming final for §1291 purposes, the union argued that this rule was inapplicable as the fees claimed were contractual and not statutory. The First Circuit adopted the union’s position, 695 F.3d 1 (1st Cir. 2012), in line with precedent from the Third, Fourth, Eighth, and Eleventh Circuits, but thereby deepening a circuit split with the Second, Fifth, Seventh, and Ninth Circuits.

The Supreme Court granted certiorari and in a unanimous opinion reversed the First Circuit, conclusively establishing that pending fee petitions—whether derived from statutory or contractual rights—do not prevent a merits judgment from becoming final for §1291 purposes.

Because the circuit courts have no jurisdiction to consider untimely appeals, Ray Haluch Gravel Co. has immediate practical consequences in the circuits that had previously adopted the position rejected by the Court.

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