Concept
Fee Motions and Appeals
Attorney's fees claimed by motion
Fee Motions and Appeals
A fee motion usually reaches the court after the merits ruling, which leaves the loser deciding whether to appeal while the winner's fee request is still pending. Rule 54(d)(2) produces that sequence. Subparagraph (A) requires the claim to be made by motion unless the substantive law makes fees an element of damages to be proved at trial,1 and subparagraph (B)(i) sets the deadline for the motion at 14 days after judgment unless the court or a statute provides otherwise.2 On the day the court decides the merits, a request for fees is therefore often still open.
The question is whether that open request keeps the merits ruling from being a final decision. Section 1291 makes final decisions appealable, and the 30-day period for filing a notice of appeal runs from the final decision.3 The Supreme Court has answered no, and it has refused to carve out an exception for contractual fee claims.4 The Federal Rules then supply the means of postponing the appeal period when circumstances warrant, which the Court identified as Rules 54(d)(2) and 58(e).5 The first subsection below takes up the default rule and its leading application; the second takes up Rule 58(e) and the appeal from the fee order itself.
Fees Are Collateral
Budinich v. Becton Dickinson & Co. answered the question with a bright-line rule: “Courts and litigants are best served by the bright-line rule, which accords with traditional understanding, that a decision on the merits is ‘final decision’ for purposes of § 1291 whether or not there remains for adjudication a request for attorney's fees attributable to the case.”6 The rule looks at one thing: the character of the issue left open after the court has ruled on the merits.7 A request for fees tied to the case is collateral, a matter the court decides apart from the merits, and a pending collateral matter does not hold the merits decision open.
The rule cost the petitioner in Budinich his appeal. He did not file his notice of appeal until after the court decided the fee application, and because the merits decision had already become final, his notice came two and a half months too late.8 A loser who waits for the fee figure before deciding whether to challenge the merits takes the same risk. The default stays where Budinich put it: the merits judgment starts the clock, unless a court order under Rule 58(e), discussed below, provides otherwise.
Ray Haluch Gravel Co. v. Central Pension Fund tested the rule against a fee claim that looked much more like part of the merits. The district court decided the merits on June 17, 2011, and decided the Funds' request for attorney's fees and costs on July 25. On August 15 the Funds appealed from both decisions, and Haluch cross-appealed a week later. Haluch argued that the June 17 decision was a final decision under § 1291, so that the notice of appeal had been due within 30 days of it. The Funds answered that there was no final decision until the court ruled on fees on July 25, which would make their appeal timely on every issue.9 Their fee request rested on ERISA and also on a contract, the collective bargaining agreement (CBA).10 A unanimous Court held that Budinich controlled. What the June 17 order left open was a claim for fees for the case being resolved on the merits, and that claim did not keep the merits decision from being final.11
The Funds' principal argument was that a contractual fee claim belongs to the merits because contractual fee provisions are always a measure of damages. The Court found that argument unpersuasive, because such provisions often award fees to prevailing defendants.12 That observation tracks the distinction drawn earlier in this chapter between fees that compensate a loss and fees that reward winning. The Court then gave a more basic answer: Budinich's uniform rule never depended on whether the law authorizing a particular fee claim treated the fees as part of the merits. Treating contract and statute differently would not promote the operational consistency Budinich stressed, and it would not promote predictability, because it is not always clear whether and to what extent a fee claim is contractual rather than statutory.13 The Court was not, then or now, “inclined to adopt a disposition that requires the merits or nonmerits status of each attorney's fee provision to be clearly established before the time to appeal can be clearly known.”14
The Funds also invoked the interest in avoiding piecemeal litigation. The Budinich Court knew of that concern when it adopted a uniform rule, and it is counterbalanced by the interest in learning promptly and clearly whether the merits ruling will be appealed, particularly because fee claims can be complex and slow to resolve.15
The case itself shows why a rule sorted by the source of the fee would be hard to apply. The Funds' notice of motion cited only ERISA, and only the accompanying affidavit, through an oblique reference to the CBA, revealed that a contractual fee claim was being asserted. The district court's July 25 decision likewise cited only ERISA, without mentioning the CBA provision or any other contractual provision.16 A party trying to learn whether the appeal clock was running would have had to litigate the classification first. The variety of fee provisions compounds the problem. Some treat fees as part of the merits and some do not; some are bilateral and some unilateral; some depend on prevailing-party status and some do not; and some are unclear on these points.17 Budinich ignores those distinctions and looks only to the character of the issue that remains open.18 The classification exercise earlier in this chapter, which separates fees that are damages from fees that reward winning, therefore governs how a fee claim must be presented and has no role in deciding whether a merits judgment is final.
The rule also reaches the related expenses that travel with attorney's fees. Many fee-shifting statutes authorize additional litigation expenses such as expert fees, and Rule 54(d)(2)(A) itself provides for motions claiming “attorney's fees and related nontaxable expenses.”19 The Funds suggested that Budinich might not apply when nonattorney professional fees are included in a motion for attorney's fees and costs. The Court saw no apparent reason to doubt that Budinich remains applicable where such fees are claimed and awarded incidental to attorney's fees.20
The Court did mark the edge of the rule. The situation would differ, it said, 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 the Funds' case was not that case, because the open issue was a claim for fees for the case being resolved on the merits.21 The contrast turns on what the fee claim attaches to. In Ray Haluch the request was an add-on to a case already decided, while in the freestanding action the fees are themselves the thing being sued for. The Court did not say how such an action would come out.
Collateral treatment fits the nature of a fee motion. In Cox, the court reasoned that the attorney's fees there were by statute part of the costs and, because they may be awarded only to prevailing parties and in the court's discretion, ordinarily are sought only after litigation, so that a motion for fees is unlike a motion to alter or amend a judgment. It drew support from White v. New Hampshire Department of Employment Security, which held that a postjudgment request for fees under § 1988 was not a “motion to alter or amend the judgment” subject to the timeliness standard of Rule 59(e), and it extended that reasoning to fees under Title VII.22 Rule 58(e) points the same way. It provides that the entry of judgment ordinarily may not be delayed, nor the time for appeal extended, in order to tax costs or award fees, which the Supreme Court said accords with Budinich and confirms the general practice of treating fees and costs as collateral for finality purposes.23
An exam stem on this point usually supplies a merits judgment date, a later fee ruling date, and a notice of appeal filed after the first. It will add a fact meant to make the fees look like part of the merits, such as a contract clause or an expert's bill. None of those facts delays finality. The merits appeal period runs from the merits judgment unless a court order under Rule 58(e) says otherwise, and the pattern that calls for separate analysis is a freestanding action for fees incurred in collecting payments that were not themselves the subject of the litigation.
Rule 58(e) and Fee Orders
Because a pending fee request leaves the merits judgment final, the loser's appeal clock runs while the fee motion waits. Rule 58(e) starts from that premise: the entry of judgment ordinarily may not be delayed, nor the time for appeal extended, in order to tax costs or award fees. It then gives the court a way out. If a timely fee motion 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 under Federal Rule of Appellate Procedure 4(a)(4) as a timely Rule 59 motion. The time to file an appeal then runs from entry of the order disposing of the fee motion.25
The delay is the court's choice, and the pendency of the motion does not make it. A timely Rule 59 motion postpones the appeal period on its own, but a timely fee motion has that effect only if the district court enters an order informing the parties that postponement is its intent.26 The rule permits the court to delay finality until the fee dispute is decided, and it does not require that result. The fee motion must also itself be timely, since otherwise the district court is without authority to delay the appeal.27
The Supreme Court treated Rules 54(d)(2) and 58(e) together as the way the Federal Rules avoid piecemeal appeals in the ordinary run of cases where circumstances warrant delaying the time to appeal.28 In Ray Haluch no one had tried to use the tool. The Court noted that the parties had not attempted to invoke Rule 58(e) to delay the time to appeal, so the Funds had no order of that kind to rely on. However the Funds' fee claims could or should have been litigated, the Court said, 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).29
The hypothetical exposes the instinct that a pending fee motion works like a Rule 59 motion. It does not, unless the court says it does.
Once the court rules on the fee motion, the question becomes whether the fee order can itself be appealed. An order granting or denying attorney's fees is separately appealable. The right attaches to a completed ruling, however: an order that merely establishes a party's entitlement to fees, without reducing the award to a specific amount, is not sufficiently final to be appealed.30 As one court put it, “a decision to award unquantified attorneys fees . . . is not final.” The appealable fee order is the one that fixes the number.
Mullane v. Chambers shows what follows when a fee award is never entered as its own judgment. The Sheriff's Department won attorney's fees of $43,720.44 in litigation that ended on June 6, 2002, with a judgment on a separate document declaring the plaintiffs the owners of a yacht and awarding them $100,000 plus costs.31 That judgment made no mention of the fee award. The fee rulings were older and informal: a conditional order allowing fees, dated March 9, 2001, and a clerk's notation about the denial of a motion to modify.32
The district court reasoned that the closing judgment made the earlier interlocutory orders final, because the case was declared closed by a final judgment, and the court of appeals disagreed.33 Rule 54(b) supplies the backdrop, and the district court had dismissed the Sheriff's Department's Rule 54(b) motion as moot when it entered that judgment. In a case with more than one claim or party, an order that adjudicates fewer than all of them does not end the action and may be revised until a judgment adjudicates all the claims and all the parties' rights and liabilities, unless the court expressly determines there is no just reason for delay and directs entry of final judgment on fewer than all.34 The court of appeals nonetheless held that the earlier fee documents did not suffice for Rule 58 purposes, because a separate judgment must be separate and distinct from any opinion or memorandum and a docket entry is not enough. It also held that the June 6 judgment could not serve as the separate judgment on the fee award, because it failed to mention the award. The court acknowledged that courts have accepted judgments that incorporate the underlying opinion or order by reference, but this judgment made no mention of the award at all.35
Mullane arose from events in 2001 and 2002, so check the current text of Rule 58 before borrowing its discussion of separate judgments. What carries over is the structural point that a fee award needs a properly entered judgment of its own for Rule 58 purposes. A conditional order, a docket notation, or a later judgment silent about the fees does not do that work.
An exam stem on this subject usually supplies a judgment date, a fee motion date, a notice of appeal date, and sometimes a fee ruling. Three questions sort it: was the fee motion timely, did the court enter a Rule 58(e) order before the notice of appeal became effective, and, if the appeal is from the fee ruling, did that ruling fix an amount?