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SUPREME COURT OF THE UNITED STATES
_________________
No. 12–992
_________________
RAY HALUCH GRAVEL COMPANY, et al.,
PETI-TIONERS v. CENTRAL PENSION FUND OFTHE INTERNATIONAL UNION OF
OPER-ATING ENGINEERS AND PARTICI-PATING EMPLOYERS et al.
on writ of certiorari to the united states
court of appeals for the first circuit
[January 15, 2014]
Justice Kennedy
delivered the opinion of the Court.
Federal courts of
appeals have jurisdiction of appeals from “final
decisions” of United States district courts. 28
U. S. C. §1291. In Budinich v. Becton Dickinson
& Co., 486 U. S. 196 (1988) , this Court held that a
decision on the merits is a “final decision” under
§1291 even if the award or amount of attorney’s fees for
the litigation remains to be determined. The issue in this case is
whether a different result obtains if the unresolved claim for
attorney’s fees is based on a contract rather than, or in
addition to, a statute. The answer here, for purposes of §1291
and the Federal Rules of Civil Procedure, is that the result is not
different. Whether the claim for attorney’s fees is based on
a statute, a contract, or both, the pendency of a ruling on an
award for fees and costs does not prevent, as a general rule, the
merits judgment from becoming final for purposes of appeal.
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.
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, 94Stat. 1295, 29
U. S. C. §1132(g)(2)(D) (providing for
“reasonable attorney’s fees and costs of the action, to
be paid by the defendant”), and the CBA itself, App. to Pet.
for Cert. 52a (providing that “[a]ny costs, including legal
fees, of collecting payments due these Funds shall be borne by the
defaulting Employer”).
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. Id., at 51. It also noted that, “[o]n the
other hand, attorney’s fees is part of the damages
potentially here.” Ibid. It gave the plaintiffs the option to
offer a submission with regard to fees along with their proposed
findings of fact and conclusions of law, or to “wait to see
if I find in your favor and submit the fee petition later
on.” Ibid.
The Funds initially
chose to submit their fee petitionat the same time as their
proposed findings of fact and conclusions 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 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. Ibid. The accompanying
“affidavit in support of [the] application for
attorneys’ fees and costs,” in turn, cited the
parties’ agreements (including the CBA, as well as related
trust agreements) and §502(g)(2)(D) of ERISA. Id., at 74.
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., 792 F. Supp. 2d 129 (Mass.). A judgment in favor of the
Funds in the amount of $26,897.41 was issued the same day. App. to
Pet. for Cert. 39a–40a. The District Court did not rule on
the Funds’ motion for attorney’s fees and costs until
July 25, 2011. On that date it awarded $18,000 in attorney’s
fees, plus costs of $16,688.15, for a total award of $34,688.15.
792 F. Supp. 2d 139, 143. On August 15, 2011, the Funds
ap-pealed from both decisions. Haluch filed a cross-appeal a week
later.
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 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., 511 U. S.
863, 868 (1994) .
The Court of Appeals
agreed with the Funds. 695 F. 3d 1, 7 (CA1 2012). It
acknowledged this Court’s holding that an unresolved issue of
attorney’s fees generally does not prevent judgment on the
merits from being final. But it held that this rule does not
“mechanically . . . apply to all claims for
attorneys’ fees, whatever their genesis,” and that,
instead, “[w]here, as here, an entitlement to
attorneys’ fees derives from a contract . . . the
critical question is whether the claim for attorneys’ fees is
part of the merits.” Id., at 6. Interpreting the CBA in this
case as “provid[ing] for the payment of attorneys’ fees
as an element of damages in the event of a breach,” the Court
of Appeals held that the June 17 decision was not final. Ibid.
Concluding that the appeal was timely as to all issues, the Court
of Appeals addressed the merits of the dispute with respect to the
amount of unpaid remittances as well as the issue of fees and
costs, remanding both aspects of the case to the District Court.
Id., at 11.
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 on
the merits from being final. 570 U. S. ___ (2013). Compare O
& G Industries, Inc. v. National Railroad Passenger
Corporation, 537 F. 3d 153, 167, 168, and n. 11 (CA2
2008); United States ex rel. Familian Northwest, Inc. v. RG
& B Contractors, Inc., 21 F. 3d 952, 954–955 (CA9
1994); Continental Bank, N. A. v. Everett, 964 F. 2d 701,
702–703 (CA7 1992); and First Nationwide Bank v. Summer House
Joint Venture, 902 F. 2d 1197, 1199–1200 (CA5 1990),
with Carolina Power & Light Co. v. Dynegy Marketing &
Trade, 415 F. 3d 354, 356 (CA4 2005); Brandon, Jones, Sandall,
Zeide, Kohn, Chalal & Musso, P. A. v. MedPartners, Inc., 312
F. 3d 1349, 1355 (CA11 2002) (per curiam); Gleason v. Norwest
Mortgage, Inc., 243 F. 3d 130, 137–138 (CA3 2001); and
Justine Realty Co. v. American Nat. Can Co., 945 F. 2d 1044,
1047–1049 (CA8 1991). For the reasons set forth, the decision
of the Court of Appeals must be reversed.
II
Title 28
U. S. C. §1291 provides that “[t]he courts of
appeals . . . shall have jurisdiction of appeals from all
final decisions of the district courts of the United States
. . . .” “[T]he timely filing of a
notice of appeal in a civil case is a jurisdictional
requirement.” Bowles v. Russell, 551 U. S. 205, 214
(2007) . Rule 4 of the Federal Rules of Appellate Procedure
provides, as a general matter and subject to specific
qualifications set out in later parts of the Rule, that in a civil
case “the notice of appeal . . . must be filed
. . . within 30 days after entry of the judgment or order
appealed from.” Rule 4(a)(1)(A). The parties in this case
agree that notice of appeal was not given within 30 days of the
June 17 decision but that it was given within 30 days of the July
25 decision. The question is whether the June 17 order was a final
decision for purposes of §1291.
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, 324 U. S. 229, 233 (1945) .
In Budinich, this Court addressed the question whether an
unresolved issue of at-torney’s fees for the litigation
prevents a judgment from be-ing final. 486 U. S., at 202.
There, a District Court in a diversity case had entered a judgment
that left unresolved a motion for attorney’s fees based on a
Colorado statute providing attorney’s fees to prevailing
parties in certain cases. Id., at 197. The Court held that the
judgment was final for purposes of §1291 despite the
unresolved issue of attorney’s fees. Id., at 202.
The Court in Budinich
began by observing that “[a]s a general matter, at least,
. . . a claim for attorney’s fees is not part of
the merits of the action to which the fees pertain.” Id., at
200. The Court noted that awards of at-torney’s fees do not
remedy the injury giving rise to the action, are often available to
the party defending the action, and were regarded at common law as
an element of “costs” awarded to a prevailing party,
which are generally not treated as part of the merits judgment.
Ibid. Though the Court acknowledged that the statutory or
decisional law authorizing the fees might sometimes treat the fees
as part of the merits, it held that considerations of
“operational consistency and predictability in the overall
application of §1291” favored a “uniform rule that
an unresolved issue of attorney’s fees for the litigation in
question does not prevent judgment on the merits from being
final.” Id., at 202.
The facts of this case
have instructive similarities to Budinich. In both cases, a
plaintiff sought to recover employment-related payments. In both
cases, the District Court entered a judgment resolving the claim
for unpaid amounts but left outstanding a request for
attorney’s fees incurred in the course of litigating the
case. Despite these similarities, the Funds offer two arguments to
distinguish Budinich. First, they contend that unresolved claims
for attorney’s fees authorized by contract, unlike those
authorized by statute, are not collateral for finality purposes.
Second, they argue that the claim left unresolved as of June 17
included fees incurred prior to the commencement of formal
litigation and that those fees, at least, fall beyond the scope of
the rule announced in Budinich. For the reasons given below, the
Court rejects these arguments.
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 damages. They argue
that contractual provi-sions for attorney’s fees or costs of
collection, in contrastto 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, supra, at 137, n. 3. The Funds’
argument fails, however, for a more basic reason, which is that the
Court in Budinich rejected the very distinction the Funds now
attempt to draw.
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. 486
U. S., at 201. The Court acknowledged that not all statutory
or decisional law authorizing attorney’s fees treats those
fees as part of “costs” or otherwise not part of the
merits; and the Court even accepted for purposes of argument that
the Colorado statute in that case “ma[de] plain” that
the fees it authorized “are to be part of the merits
judgment.” Ibid. But this did not matter. As the Court
explained, the issue of attorney’s fees was still collateral
for finality purposes under §1291. The Court was not then, nor
is it now,“inclined to adopt a disposition that requires the
meritsor nonmerits status of each attorney’s fee provision to
be clearly established before the time to appeal can be clearly
known.” Id., at 202. There is no reason to depart here from
this sound reasoning. By arguing that a different rule should apply
to fee claims authorized by contract because they are more often a
matter of damages and thus part of the merits, the Funds seek in
substance to relitigate an issue already decided in Budinich.
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 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.
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 citedjust ERISA, without mention or analysis of the CBA
provi-sion 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. Thisis 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 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 58(e) to delay the time to appeal.
Regardless of how the Funds’ fee claims could or should have
been litigated, 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 “regardlessof 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
eitherto plaintiffs or defendants; some are unilateral. Some
de-pend 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
requestedin 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, 499 U. S. 83 ,
n. 4 (1991) (listing statutes); cf. Fed. Rule Civ. Proc.
54(d)(2)(A) (providing mechanism for claims by motion for
“attorney’s fees and related nontaxable
expenses”). Where, as here, those types of fees are claimed
and awarded incidental to attorney’s fees, there is no
apparent reason why parties or courts would find it difficult to
tell that Budinich remains applicable.
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,”
486 U. S., at 202, or, equivalently, “attributable to
the case,” id., at 203.
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 the
filing of a complaint are performed ‘on the
litigation.’ ” Webb v. Dyer County Bd. of Ed., 471
U. S. 234, 243 (1985) . “Most obvious examples”
include “the drafting of the initial pleadings and the work
associated with the development of the theory of the case.”
Ibid. More generally, pre-filing tasks may be for the litigation if
they are “both useful and of a type ordinarily necessary to
advance the . . . litigation” in question.
Ibid.
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 steps toward litigation. See id., at 250
(Brennan, J., concurring in part and dissenting in part)
(“[I]t is settled that a prevailing party may recover fees
for the time spent before the formal commencement of the litigation
on such matters as . . . investigation of the facts of
the case, research on the viability of potential legal claims,
[and] drafting of the complaint and accompanying documents
. . . .”); 2 Derfner, supra,
¶16.02[2][b], at 16–15 (“[H]ours . . .
spent investigating facts specific to the client’s case
should be included in the lodestar, whether [or not] that time is
spent prior to the filing of a complaint”). To be sure, the
situation would differ if a party brought a freestanding contract
action asserting an entitlement to fees incurred in an effort to
collect payments that were not themselves the subject of the
litigation. But that is not this case. Here the unresolved issue
left open by the June 17 order was a claim for fees for the case
being resolved on the merits.
* * *
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.
