Appealability—Finality Of Decision Leaving Request For Contractual Attorney’s Fees Unresolved

In Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1998), the Supreme Court held that a district-court decision that fully resolves the merits of the litigation, but without addressing attorney's fees under a statutory fee-shifting provision, is a "final decision" under 28 U.S.C. § 1291 that must be appealed within 30 days. Today, the Supreme Court granted certiorari in Ray Haluch Gravel Co. v. Central Pension Fund, No. 12-992, to address whether the same rule applies when attorney's fees are authorized by a contractual fee provision rather than by statute. Mayer Brown represents the petitioners in this case.

In the decision below, the district court issued an initial decision on the merits of the parties' contract dispute and then, more than a month later, issued a separate order awarding attorney's fees. Respondents filed a notice of appeal within 30 days after the order granting attorney's fees, but not within 30 days of the earlier decision resolving the merits. Eschewing Budinich's "bright-line rule" (486 U.S. at 202), the First Circuit held that the notice of appeal was timely as to both decisions. The court reasoned that, unlike the statutory attorney's fees in Budinich, the contractual attorney's fees in this case "are part of the merits of" the contract claim. 695 F.3d 1, 7.

The courts of appeals have divided on whether contractual fee awards are collateral, like the statutory attorney's fees in Budinich, or are instead part of the merits that must be resolved before any appeal is taken. The Second, Fifth, Seventh, and Ninth Circuits have held that contractual fee awards are always collateral. The Eleventh Circuit has held that they are never collateral. And the First, Third, Fourth, and Eighth Circuits have held that they are sometimes collateral, depending on case-specific facts.

The Court's decision could have a significant impact on businesses because contacts containing attorney-fee provisions are commonplace in commercial transactions. This case will determine the procedures that must be followed by parties appealing a decision in a case involving a claim for contractual attorney's fees, with a failure to follow those procedures potentially resulting in a...