Contempt, Finality & Unspecified Attorney Fees

A ruling on liability is not final until the court specifies a remedy. But what if that remedy consists entirely of attorney fees? The Supreme Court has long held that a decision on the merits is final despite any unresolved issues regarding attorney fees. So is a ruling on liability final when the remedy is an unspecified award of attorney fees?

In In re Asset Enhancement, Inc., the Eleventh Circuit held that such an order is not final, at least in the context of contempt. A contempt order, the court explained, is not final until the court determines a sanction. That rule applies even when the sanction is a not-yet-specified amount of attorney fees.

The Contempt & Fee Orders in Asset Enhancement

Simplifying a bit, Asset Enhancement involved two relevant orders. First was a contempt order, in which a bankruptcy court held an attorney in contempt for violation bankruptcy’s automatic stay. In that order, the court determined that attorney fees would be an appropriate sanction. The bankruptcy court accordingly directed the debtor to file a motion seeking those fees.

Some time thereafter, the parties agreed on on roughly $13,000 in fees. That produced the second order—a fee order—in which the bankruptcy court awarded the debtor that amount.

On Appeal to the District Court

The attorney then appealed the contempt and fee orders. But the district court thought that the appeal was untimely insofar as it sought review of the contempt order. Litigants normally have 14 days to appeal a bankruptcy court’s order. And although the attorney’s appeal was timely if counting from the fee order, it was late if counting from the contempt order. The district court thought that the contempt order was final when entered. The court accordingly dismissed the attorney’s appeal insofar as it challenged the contempt order.

Contempt & Finality

On further review, the Eleventh Circuit held that the contempt order was not final until the bankruptcy court had determined the sanction. The court of appeals accordingly vacated the district court’s dismissal of the attorney’s appeal.

The district court’s conclusion to the contrary stemmed from the general rule regarding finality and attorney fees. The Supreme Court has twice held that a decision on the merits is final despite an unresolved issue of attorney fees. The district court accordingly thought that the contempt order was final—and the time to appeal began running—once it was entered.

But the Eleventh Circuit has held that a contempt citation is not final until the penalties are finally imposed. So unresolved attorney-fee issues preclude finality when they are the sanction for contempt.

Tension in the Caselaw?

The Asset Enhancement panel seemed to think there was some tension between the Supreme Court caselaw on finality/attorney fees and the Eleventh Circuit’s rule on the finality of contempt citations. The panel noted that the Eleventh Circuit’s caselaw came after the Supreme Court’s and thus must be followed.

But I don’t see any tension here. Just like any order on liability, a contempt order is not final until the court determines the remedy.

That shouldn’t change just because the sanction for a contempt is attorney fees. The Supreme Court’s attorney-fees cases concern merits decisions when the entitlement or amount of attorney fees has not yet been determined. But for there to be any appealable merits decision—including a decision on the merits of a contempt order—the court must determine both liability and the remedy.

In re Asset Enhancement, Inc., 2023 WL 8385087 (11th Cir. Dec. 5, 2023), available at the Eleventh Circuit and Westlaw