The U.S. Supreme Court ruled in a unanimous opinion that an unresolved claim for attorney’s fees does not prevent a decision on the merits of an ERISA suit from becoming final for purposes of the deadline to file a notice of appeal to a federal appellate court. Ray Haluch Gravel Co. v. Cent. Pension Fund of Operating Eng’rs, No. 12-992, 2014 U.S. LEXIS 646. In so ruling, the Court resolved a split among the circuit courts as to whether an appeal of a decision on the merits should proceed before there has been a final ruling on a corollary application for attorneys’ fees, and whether the resolution of that issue should depend on whether the claim for attorneys’ fees was based on contract or statute.
In the case before the Court, several multiemployer employee benefits funds affiliated with the International Union of Operating Engineers, Local 98 (the “Funds”) commenced a suit under ERISA seeking payment of delinquent contributions from Ray Haluch Gravel Co. (the “Company”). The Funds also sought attorney’s fees and costs pursuant to the applicable collective bargaining agreement and ERISA. On the merits, the district court ruled that the Funds were entitled to some, but not all, of the unpaid contributions. About one month later, the district court awarded attorney’s fees (also in an amount less than that sought by the Funds). The Funds appealed from both decisions within thirty days of the district court’s ruling on attorney’s fees, thereby calling into question whether the appeal was still timely as to the ruling on the underlying merits.
The First Circuit determined that the appeal was timely. While acknowledging the general rule that an unresolved issue of fees does not prevent a decision on the merits from being final, the First Circuit found that the matter before it constituted an exception—here, the issue of attorney’s fees was part of the merits, because the CBA provided for the payment of such fees “as an element of damages in the event of a breach.”
The Supreme Court reversed and found the appeal was untimely. It concluded that considerations of consistency and predictability required that the general rule apply regardless of whether the entitlement to fees is asserted under a statute or contract. It also was of the view that the Funds’ attempt to carve-out an exception to the general rule for “fee claims authorized by contract” was an attempt to relitigate an issue that it had already decided nearly thirty years ago in Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988). There, the Court held that a decision on the merits is final for the purposes of appeal notwithstanding that fact that the issue of attorney’s fees remains to be determined.
Although the underlying claims in the case arose under ERISA, litigants across all disciplines ought to take comfort from the Supreme Court’s decision to create a clear rule concerning the time to appeal a decision on the merits.