Budinich v. Becton Dickinson, 486 U.S. 196 (1988)

Budinich v. Becton Dickinson

No. 87-283

Argued March 21, 1988
Decided May 23, 1988
486 U.S. 196

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

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 Federal 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. 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 separate 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, affirmed.

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