Budinich v. Becton Dickinson and Company, No. 87-283

• Court: United States Supreme Court
• Writing for the Court: SCALIA
• Citation: 486 U.S. 196,108 S.Ct. 1717,100 L.Ed.2d 178
• Parties: Joseph G. BUDINICH, Petitioner, v. BECTON DICKINSON AND COMPANY, Respondent
• Docket Number: No. 87-283
• Decision Date: 23 May 1988

486 U.S. 196 108 S.Ct. 1717 100 L.Ed.2d 178 Joseph G. BUDINICH, Petitioner,

v.

BECTON DICKINSON AND COMPANY, Respondent.

No. 87-283. Argued March 21, 1988. Decided May 23, 1988. Syllabus

In petitioner's employment compensation action, which respondent removed from a Colorado state court to the Federal District Court on the basis of diversity of citizenship, judgment was entered on the jury's verdict for petitioner in an amount considerably less than he had sought. Petitioner timely filed new-trial motions and a motion for attorney's fees under Colorado law. On May 14, 1984, the court denied the new trial motions but found that petitioner was entitled to attorney's fees, and, on August 1, 1984, entered a final order determining the amount of the fees. On August 29, petitioner filed notice of appeal to the Court of Appeals, covering all of the District Court's post-trial orders. Although affirming the attorney's fees award, the court granted respondent's motion to dismiss as to all other issues on the grounds that the judgment was final and immediately appealable upon entry of the May 14 order denying the new-trial motions, and that the appeal notice was not filed within 30 days of that order as required by Rules of Appellate Procedure 4(a)(1) and (4).

Held:

1. The question whether the District Court's decision on the merits was appealable before the attorney's fees determination was made is governed by federal law—specifically 28 U.S.C. § 1291, which provides that all district court "final decisions" are appealable to the courts of appeals—and not by Colorado law. Although state law generally supplies the rules of decision in federal diversity cases, it does not control the resolution of issues governed by federal statute. The contention that the application of § 1291 to diversity cases would violate the Tenth Amendment to the Federal Constitution is without merit, since § 1291 is "rationally capable of classification" as a procedural rule, and is therefore necessary and proper for implementing Congress' Art. III, § 1, power to establish federal courts. Hanna v. Plumer, 380 U.S. 460, 472, 85 S.Ct. 1136, 1144, 14 L.Ed.2d 8. Pp. 198-199.

2. A decision on the merits is a "final decision" for purposes of § 1291, and is therefore immediately appealable, even though the recoverability or amount of attorney's fees for the litigation remains to be determined. The merits order ends the litigation on the merits, and the remaining fees question does not prevent finality, since it is collateral to, and sepa-

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rate from, the order, and resolution of it cannot alter or amend the order or moot any decisions that the order embodies. According different treatment to attorney's fees when they are deemed part of the merits recovery by statutory or decisional law (as petitioner claims is the case in Colorado) would not serve § 1291's purposes, and would disserve the interests of courts and litigants because, since the merits or nonmerits status of a fee provision is often unclear, the issue of finality and hence the jurisdictional time for appeal would be left in doubt. The argument that the Court of Appeals' decision constitutes a significant change in the law and therefore should be applied only prospectively cannot avail petitioner, since, regardless of whether such a change has occurred, the untimely filed notice of appeal did not give the court jurisdiction to review the merits decision. Pp. 199-203.

807 F.2d 155 (CA10 1986), affirmed.

SCALIA, J., delivered the opinion for a unanimous Court.

Thomas Frank, Evergreen, Colo., for petitioner.

Terre Lee Rushton, Denver, Colo., for respondent.

Justice SCALIA delivered the opinion of the Court.

Petitioner brought this action in Colorado state court to recover employment compensation allegedly due. Respondent removed the case to the United States District Court for the District of Colorado on the basis of diversity of citizenship. 28 U.S.C. §§ 1332, 1441. A jury awarded petitioner a verdict of $5,000 (considerably less than had been sought), and judgment was entered on March 26, 1984. Petitioner timely filed new-trial motions, challenging various rulings by the District Court, and a motion for attorney's fees. (Colorado law provides that in a suit to collect compensation due from employment "the judgment . . . shall include a reasonable attorney fee in favor of the winning party, to be taxed as part of the costs of the action." Colo.Rev.Stat. 8-4-114 (1986).) On May 14, 1984, the District Court denied the new-trial motions, found that petitioner was entitled to attorney's fees, and requested further briefing and documentation before de-

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termining their amount. The District Court issued its final order concerning the attorney's fees on August 1, 1984. On August 29, petitioner filed notice of appeal to the Court of Appeals for the Tenth Circuit, covering all the District Court's post-trial orders.

Respondent filed a motion to dismiss the appeal, arguing that the judgment was final and immediately appealable when the order denying the new-trial motions was entered May 14, 1984, and that the notice of appeal was not filed within 30 days of that order as required by Federal Rules of Appellate Procedure 4(a)(1) and (4). The Court of Appeals granted the motion to dismiss as to all issues except the award of attorney's fees, which it affirmed. We granted certiorari, 484 U.S. 895, 108 S.Ct. 226, 98 L.Ed.2d 185 (1987), to resolve a conflict in the Courts of Appeals. Compare, e.g., Holmes v. J. Ray McDermott & Co., 682 F.2d 1143, 1146 (CA5 1982), cert. denied, 459 U.S. 1107, 103 S.Ct. 732, 74 L.Ed.2d 956 (1983), with, e.g., International Assn. of Bridge, Structural, Ornamental, and Reinforcing Ironworkers' Local Union 75 v. Madison Industries, Inc., 733 F.2d 656, 658 (CA9 1984).

It is common ground in this case that if the District Court's decision on the merits was appealable before its determination of attorney's fees, then the merits appeal was untimely. See Fed. Rules App.Proc. 4(a)(1), (4), (6); Fed. Rules Civ.Proc. 54(a), 58. Petitioner contends that Colorado law governs this question and that "[u]nder Colorado law a claim is not final and appealable until attorneys fees are fully determined." Brief for Petitioner 13. We do not agree that Colorado law governs.

Although state law generally supplies the rules of decision in federal diversity cases, see 28 U.S.C. § 1652; Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938), it does not control the resolution of issues governed by federal statute, see U.S. Const., Art. VI, cl. 2 (Supremacy Clause); 28 U.S.C. § 1652; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404-405, 87 S.Ct. 1801, 1806, 18 L.Ed.2d 1270 (1967). Under 28 U.S.C. § 1291, "all final

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decisions of...