Court Opinion

ID: 9498176
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:10:04.21857+00
Date Added: 2024-06-11T17:58:39.923079
License: Public Domain

WILKINSON, Circuit Judge,
concurring:
I am pleased to concur in Judge Niem-eyer’s fine opinion. In this case, the contract is perfectly clear that the attorneys’ fees are a part of damages, as the majority opinion well illustrates. See ante at 359-60. The attorneys’ fees provision is in the remedies section of the contract, and it is not tied to the outcome of litigation. Rather, CP & L must pay the fees if CP & *363L breaches the contract by failing to accept the specified amounts of coal. Indeed, the fee provision is simply the third of three damages provisions; it is adjacent to both the damages provision for a possible change in market price and the damages provision for additional transportation costs. As such, the attorneys’ fees are part of the total damage award, and the trial judge must determine that amount before the decision is final pursuant to 28 U.S.C. § 1291.
Many cases, by contrast, will not be this clear. Rather, the contractual language will often be ambiguous as to whether attorneys’ fees are remedial, i.e., an element of damages, or, instead, are to be awarded to a prevailing party as costs of the underlying action. Further, the language may also suggest that the attorneys’ fees are a hybrid of both damages and costs. In these cases, the attorneys’ fees claim is collateral, and a party can immediately appeal before the trial court decides that claim.1
This approach balances the two competing concerns of the case. First, in those cases, like this one, in which attorneys’ fees are clearly remedial, an appeal should not be allowed until all the factual findings are made, including a determination regarding the attorneys’ fees provision. The concern of piecemeal litigation that § 1291 was designed to prevent is most relevant when the attorneys’ fees are obviously part and parcel of a remedy for damages. Second, in ambiguous or hybrid cases, an appeal should be immediately allowed. In these cases, the reasons underlying the Budinich rule predominate. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202-03, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988). That is, the danger remains that the district court’s resolution of the attorneys’ fees claim will go for naught if the appellate court finds that a different party should prevail.2 Further, when the attorneys’ fees provision contains any ambiguity or is a hybrid, the importance of having a bright-line jurisdictional rule increases because the level of uncertainty has correspondingly increased. After all, “[t]he time of appealability, having jurisdictional consequences, should above all be clear.” Id. at 202, 108 S.Ct. 1717.
This need for clarity commends the holdings of our sister circuits — that contractual attorneys’ fees provisions are always collateral — in cases where the nature of a contractual attorneys’ fees provision admits of any doubt. See, e.g., United States ex rel. Familian Northwest, Inc. v. RG & B Contractors, Inc., 21 F.3d 952, *364954-55 (9th Cir.1994) (holding that attorneys’ fees are always collateral for the purposes of appealability); Continental Bank, N.A. v. Everett, 964 F.2d 701, 702-03 (7th Cir.1992) (same); First Nationwide Bank v. Summer House Joint Venture, 902 F.2d 1197, 1199-1200 (5th Cir.1990) (same). Unfortunately, unlike statutes, contracts have infinite variety and apply only to the parties to the contract; they are not as susceptible to an inviolable bright-line rule as statutes are. Nevertheless, to ensure clarity for future litigants, it is possible to set forth a rule for the inevitable cases involving ambiguous or hybrid contractual provisions. In such eases, and indeed in all cases, any fee claim tied to the costs of the underlying litigation in a contractual dispute should be regarded as collateral.

. Similarly, contractual provisions that are ambiguous or hybrid also fit within Rule 54(d)(2)(A) of the Federal Rules of Civil Procedure because they do not clearly provide for the recovery of the fees as an element of damages so that the attorneys’ fees claim should be made by motion.

. My brother Widener indicates some displeasure with the unanimous Budinich decision, but, as inferior federal judges, we are hardly free to disregard it. Further, contrary to my good colleague’s protestations, never allowing an immediate appeal could actually lead to wasteful litigation, depending on the nature of the contractual provision. If an appellate court reverses the district court’s determination as to who prevailed, the district court's attorneys’ fees determination becomes unnecessary (if the contractual provision provided for fee shifting in only one direction) or will have to be repeated (if the contractual provision provided for fee shifting in either direction). Even if the appellate court finds that the prevailing party at the district court level should have only partially prevailed, that may also necessitate reconsideration of any fee award. ' In sum, Judge Widener and I could not agree more on the desirability of limiting litigation, but the hope that a never-collateral view of contractual fee provisions will actually achieve that goal seems to me illusory.