On January 15, 2014, the Supreme Court decided Ray Haluch Gravel Co. v. Central Pension Fund of the International Union of Operating Engineers and Participating Employers, No. 12-992, holding that an appeal was untimely because an unresolved issue of contractual attorneys' fees did not prevent judgment on the merits from being final for purposes of 28 U.S.C. §1291.
The case addressed whether Ray Haluch Gravel Co. was required to pay union-affiliated benefit funds to the International Union of Operating Engineers and other funds (the Funds). The Funds filed suit in federal district court in Massachusetts, demanding that Haluch pay required contributions under the parties' collective-bargaining agreement (CBA) and alleging that failure to do so violated the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947. The Funds also sought attorneys' fees, auditor's fees and costs under the CBA, ERISA and another federal statute.
The federal district court ruled that the Funds were entitled to collect some of the unpaid contributions from Haluch. It did not rule on the Funds' motion for attorneys' fees and costs until more than a month later. The Funds appealed both orders within 30 days of the ruling on fees and costs. Haluch filed a cross-appeal arguing that the Funds' appeal was untimely since it was not filed within 30 days of the district court's initial decision on the merits. The First Circuit disagreed, holding that the Funds' appeal was timely because the CBA provided for an award of attorneys' fees and therefore the Funds' contractual claim for attorneys' fees was part of the merits.
The Supreme Court reversed, holding that the Funds' appeal was untimely. The Court stated that an unresolved issue of attorneys' fees does not prevent judgment on the merits from being final. For purposes of operational consistency and predictability, the Court determined that the issue of attorneys' fees is collateral for finality purposes under 28 U.S.C. §1291, regardless of whether the claim for fees is based on statute, contract, or both. The Court was not swayed by the Funds' argument that contractual attorneys' fees provisions are a measure of damages that prevented the district court's initial decision from becoming final. The Court also concluded that application of the rule did not depend on whether the statute authorizing the attorneys' fees treated the fees as part of the merits and that the rule applies where the fees are contractual.
Justice Kennedy delivered the opinion for a unanimous Court.