Attorney’s fees must be calculated before they are challenged

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Suppose some federal judge rules in favor of your opponent, and orders that your client reimburse his opponent’s attorney fees. There is no need to wait for the amount of fees to be set; you can appeal the ruling on the merits, and the issue of whether attorney fees were properly awarded, can’t you? You just invoke the court’s “pendent appellate jurisdiction,” right?

Not anymore.

Longstanding Seventh Circuit precedent has allowed a non-prevailing party to file a single notice of appeal from the final decision, and the order to award fees, even though they haven’t been calculated yet. Bittner v. Sadoff & Rudoy Industries, 728 F.2d 820 (7th Cir. 1984). Recent cases since then have continued to permit the practice. Lorillard Tobacco Co. v. A&E Oil, Inc., 503 F.3d 588 (7th Cir. 2007).

Unnoticed in the circuit over the years has been a U.S. Supreme Court opinion holding to the contrary. In Swint v. Chambers County Commission, 514 U.S. 335 (1995), the Court rejected the concept of pendent appellate jurisdiction, which the Seventh Circuit had employed to review a district court’s decision to award attorney fees to a prevailing party, when the fees haven’t yet been quantified.

Earlier this week, the Seventh Circuit discovered Swint, and accordingly overruled its opinion in Bittner. The court acknowledged, “although Swint pulled the rug out from under Bittner…, our circuit has proceeded as if nothing had happened.”

The court not only shelved Bittner, but it agreed it was the right thing to do. Judge Frank H. Easterbrook wrote for the court, “Swint supersedes Bittner, because there is nothing extraordinary about a losing party’s desire to be rid of a fee award before the obligation has been set. There is no urgent need for haste, and a substantial reason to wait – for most awards are likely to be affirmed, and then a second appeal will follow from the district judge’s order specifying the amount of fees. Judicial economy cannot be achieved by dividing one dispute across two appeals. All that results from multiple appeals is delay and expense. That’s precisely why appeal usually must await a final decision.”

Maybe … and maybe not. After all, multiple appeals are not really being avoided. The court in this case considered the merits of the underlying decision; and some point down the road, it will consider an appeal over both the propriety of the decision to award fees, and the reasonableness of the fees awarded. That’s two appeals – the same as if the court considered both the merits and the decision to award fees in one appeal, and the reasonableness of the fees in a second appeal.

Furthermore, the issues are more closely aligned. The question, whether fees should be awarded, is closely intertwined with the propriety of the underlying decision on the merits; it is a question that likely has nothing whatsoever to do with the reasonableness of the fees.

In any event, whether pendent appellate jurisdiction was a good idea or a bad one, it has now been relegated to the ash heap of history, even in its last bastion — the Seventh Circuit. So don’t waste time appealing an order awarding your opponent attorney fees until they’ve actually been calculated.

http://www.ca7.uscourts.gov/tmp/GG0OU5F8.pdf