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Fincher v. Keller Industries

submitted: June 5, 1990.


On Appeal from the United States District Court for the District of New Jersey; D.C. Civil Nos. 0312-1, 87-04307.

Sloviter, Scirica, and Nygaard, Circuit Judges.

Author: Sloviter

SLOVITER, Circuit Judge.


Before us is a motion by the appellee, Keller Industries, Inc. (Keller), to dismiss the appeal filed by plaintiffs Charles E. Fincher and Sandra Fincher on the ground that it was not timely filed. The relevant facts are undisputed.

The jury entered a verdict for the defendant Keller on January 11, 1990. On the same day, the district court executed the judgment in favor of Keller and denying costs. On January 19, 1990, Keller filed a motion "pursuant to Rule 59(e)" to amend the judgment previously entered and to permit it to serve on plaintiffs' counsel and to file with the Clerk a bill of costs and disbursements. The district court denied the motion by Memorandum Opinion and Order dated February 22, 1990. The district court explained that it had exercised the discretion vested in it under Rule 54(d) of the Federal Rules of Civil Procedure to refuse to assess costs against a losing party. It held that the provision of Rule 68 which requires the assessment of costs when the judgment obtained is not more favorable than the offer is inapplicable in cases such as this, in which the judgment was in favor of the defendant.*fn1 On March 19, 1990, the plaintiffs filed their notice of appeal.

Keller argues that the appeal was untimely because the notice of appeal was filed more than 30 days after the entry of judgment for the defendant. Plaintiffs contend that under the plain language of Federal Rule of Appellate Procedure 4(a)(4), when a timely motion is filed under Rule 59(e) of the Federal Rules of Civil Procedure to alter or amend the judgment, "the time for appeal for all parties shall run from the entry of the order denying a new trial or granting or denying any other such motion." Therefore, according to the plaintiffs, their notice of appeal was timely because it was filed within 30 days of the district court's denial of the defendant's motion to amend to permit filing of the cost bill. The disposition of defendant's motion to dismiss the appeal thus depends on whether its motion for costs is to be treated as a Rule 59(e) motion.

Several Supreme Court decisions set forth the principles which are helpful to our analysis of the issue raised by the motion to dismiss. In White v. New Hampshire Dep't of Employment Security, 455 U.S. 445, 71 L. Ed. 2d 325, 102 S. Ct. 1162 (1982), plaintiffs settled a class action which had alleged certain claims under the Social Security Act, and the consent decree was approved by the district court. More than four and one-half months thereafter, plaintiffs filed a motion for award of an attorney's fee, which the district court granted. The court of appeals reversed the order awarding a fee, holding that a motion for attorney's fees was governed by the ten-day time limit of Rule 59(e) and was therefore untimely. The Supreme Court reversed.

The Court held that Rule 59(e) had been drafted to make clear that a district court possesses a power to rectify its own mistakes in the period immediately following the entry of judgment. The Court agreed with those federal courts that had invoked Rule 59(e) only to support reconsideration of matters properly encompassed in a decision on the merits. See id. at 451, 455. Attorney's fees allowed under 42 U.S.C. ยง 1988 are not compensation for the injury giving rise to the action, and the Court held therefore that Rule 59(e) was inapplicable to the postjudgment fee request.

Thereafter, in Budinich v. Becton Dickinson and Co., 486 U.S. 196, 100 L. Ed. 2d 178, 108 S. Ct. 1717 (1988), the Court directly faced the issue of the effect of an outstanding motion for attorney's fees on the finality of the underlying merits judgment. The Court adopted "a uniform rule that an unresolved issue of attorney's fees for the litigation in question does not prevent judgment on the merits from being final." Id. at 202. Because the notice of appeal was not filed within 30 days of that judgment, the Court unanimously held that it was not timely.

In Buchanan v. Stanships, Inc., 485 U.S. 265, 99 L. Ed. 2d 289, 108 S. Ct. 1130 (1988), the Court made clear that the collateral character of the fee issue for purposes of a Rule 59(e) motion is similarly applicable to a motion for costs. In Buchanan, the unsuccessful plaintiffs filed a notice of appeal the day after the dismissal of their suit with prejudice. Two days later, within the ten-day period covered by Rule 59(e), the defendants filed an application for the allowance of costs, specifically invoking Rule 59 of the Federal Rules of Civil Procedure. The district court granted defendants' request the next day. Plaintiffs filed no new notice of appeal, relying instead on the notice of appeal filed before the motion denominated as a Rule 59(e) motion. The court of appeals dismissed the appeal, holding that under Rule 4(a)(4) of the Federal Rules of Appellate Procedure the notice of appeal was voided because the motion for the allowance of costs was a Rule 59(e) motion.

The Supreme Court reversed, relying on its decision in White. The Court held that the defendant's motion for costs necessarily was predicated on Rule 54(d) because assessment of such costs does not involve reconsideration of any aspect of the decision on the merits. The Court noted that the rules attempted to divorce the process of entering judgment from that of determining and assessing the costs. It stated:

[We] are satisfied that a motion for costs filed pursuant to Rule 54(d) does not seek "to alter or amend the judgment" within the meaning of Rule 59(e). Instead, such a request for costs raises issues wholly collateral to the judgment in the main cause ...

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