Supreme Court to resolve circuit split on timing of appeals

June 18, 2013

Once upon a time, ordinary lawyers appeared at the U.S. Supreme Court. If, by some chance, their client’s case defied long odds and made it onto the justices’ docket, lawyers who’d been on the litigation from its start would make a once-in-a-lifetime argument to the highest court in the land. Those days are mostly gone. As my brilliant Reuters colleague Joan Biskupic discussed Tuesday in a story about the competition to represent a pro se plaintiff whose petition for certiorari was granted last year, arguments at the Supreme Court have come to be the near-exclusive province of lawyers who specialize in this high-prestige, high-profile practice.

A case that the justices agreed Monday to hear in their upcoming term shows that the elite Supreme Court bar actually seems to be on the lookout for issues that will attract the justices’ attention even before cert petitions are filed. The case, Ray Haluch Gravel v. Central Pension Fund, raises the question of whether a federal district court’s ruling on the merits that leaves unresolved a request for contractual attorneys’ fees is a final decision – and thus appealable – or whether the decision is not appealable until the court has ruled on contractual attorneys’ fees. That’s a matter of consequence for parties deciding when to file their appeals, but certainly not a huge constitutional battle. Nor are the sums of money at issue – at most, about $350,000 in supposedly unpaid union contributions and attorneys’ fees – particularly notable, except for the Massachusetts landscaping company and union fund involved in the case. Both the landscaper and the union were represented in federal district court in Boston and at the 1st Circuit Court of Appeals by regional firms with fewer than 50 lawyers.

Yet both had top-notch Supreme Court counsel for their cert filings: Mayer Brown for Ray Haluch and the University of Pennsylvania Supreme Court Clinic for the union. Dan Himmelfarb of Mayer Brown and Stephanos Bibas of Penn declined to comment, but it’s a good bet that when the 1st Circuit issued its decision last September, noting a deep split in the federal circuits on whether contractual attorneys’ fees are collateral to the merits of a case, the Supreme Court bar suddenly became interested in an otherwise modest dispute between a small business and the union representing a few of its employees.

The question presented to the court is closely related to one the justices decided in their 1988 ruling inBudinich v. Becton Dickinson. In that opinion, the court held that statutory attorneys’ fees are “collateral to and separate from” the merits of a case, so that when a trial court issues a damages ruling before a ruling on statutory attorneys’ fees, the clock for an appeal on the merits starts ticking when the first ruling is entered, not when the fee judgment is rendered. Rather surprisingly, even after the Budinich decision there has been enough uncertainty about whether the same reasoning applies to contractual attorneys’ fees to create deep divisions among the federal circuits. In the Ray Haluch case, the 1st Circuit agreed with the 3rd, 4th and 8th Circuits that contractual attorneys’ fees are sometimes collateral to the final decision – but said that in this case, the fee award was wrapped up in the merits decision, so that even though the union didn’t appeal until more than 30 days after the district court’s judgment on its underlying contribution claim, its appeal was timely because it came within 30 days of the trial judge’s ruling on fees.

But as Mayer Brown’s cert petition for the landscaper explains, five of the other circuits have reached different conclusions. The 11th Circuit has said that contractual fees are never collateral to the merits. The 2nd, 5th, 7th and 9th Circuits have held that they always are.

The cert petition called on the Supreme Court to “restore order (and) provide the clarity and consistency” the justices strived for in Budinich. In the union’s opposition to certiorari, Penn Supreme Court lawyers argued that the attorneys’ fees in this case were more appropriately defined as “collection expenses,” so that the 1st Circuit’s ruling wasn’t in conflict with those of other circuits.

For any Supreme Court litigator, losing at the cert stage is bittersweet because it means you get to argue in person before the justices. After all, you hear a lot more about how many oral arguments renowned Supreme Court litigators have made than about cert petitions they’ve successfully opposed (though one could make a case that the latter is at least as important as, and probably less expensive for clients than, the former). So sometime at the end of 2013 or the beginning of 2014, a pair of seasoned Supreme Court advocates will stand before the justices to argue the arcane civil procedure issue in the $350,000 case of the landscaper and the union fund. Business as usual.

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