Retaining Jurisdiction Does Not Suspend Finality of Judgment in Federal Court

Federal appellate courts have jurisdiction to hear appeals only from “final decisions” of the district courts. (See 28 U.S.C. § 1291). Subject to limited exceptions, an appeal is timely if the litigant seeking review of the final decision files a notice of appeal within 30 days after its entry. (See 28 U.S.C. § 2107(a); Fed. R. App. P. 4(a)(1)(A)). Sometimes a district court, after ruling on the merits of a case, will “retain jurisdiction” for purposes of enforcing an injunction or entertaining a motion for attorneys’ fees. What happens then? Is the decision really “final” if jurisdiction has been retained? In Virginia state court, the answer has been no; that when a court retains jurisdiction to entertain motions for fees, the judgment is not yet final and appealable. However, in the recent Fourth Circuit case of Hudson v. Pittsylvania County, No. 13-2160, 2014 WL 7210330 (4th Cir. Dec. 17, 2014), the court was faced with this very issue and held decisively that in federal court, retaining jurisdiction to consider attorneys’ fees does not affect the finality of the underlying judgment or toll the 30-day appeal period.

As in Virginia state court, a federal district court’s decision is “final” if it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment. The Hudson court found, however, that a district court’s retaining jurisdiction over its permanent injunction order did not affect the order’s finality within the meaning of Section 1291. It reasoned that the court’s ability to modify or terminate an injunction post-judgment is simply part of its “inherent power” that exists in every case. Relying on the Supreme Court’s decision in Ray Haluch Gravel Co. v. Cent. Pension Fund of Int’l Union of Operating Eng’rs & Participating Emp’rs, 134 S. Ct. 773, 777 (2014), the court also held that “a decision on the merits is a final decision under § 1291 even if the award or amount of attorney’s fees for the litigation remains to be determined.” This result is hard to reconcile with the definition of “finality,” but it’s now unquestionably the law in the Fourth Circuit.

It’s still possible to suspend the finality of a judgment so that it’s not necessary to appeal until all issues–including attorneys’ fees–have been decided, but certain formalities must be followed that weren’t followed in Hudson. In essence, the court needs to order that the appeal period is tolled; it won’t happen automatically. Under Federal Rule of Appellate Procedure 4(a)(4)(A), the time for filing an appeal in a civil case may be tolled where a party files a timely motion for attorney’s fees and “the district court extends the time to appeal.” In Hudson, the successful plaintiff filed a timely post-judgment motion for attorneys’ fees but neither party sought an order extending the 30-day appeal period. The Fourth Circuit held that filing the motion alone was not enough and granted the plaintiff’s motion to dismiss the appeal as untimely.

The court noted that the parties were free to petition the district court in the future to modify the injunction, but clarified that the district’s court’s ability to grant such relief does not affect the finality of the injunction order.

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