In the

United States Court of Appeals
               For the Seventh Circuit
                         ____________

No. 07-4023

JEAN M C C ARTER, et al.,
                                             Plaintiffs-Appellants,
                                v.

R ETIREMENT P LAN FOR THE D ISTRICT M ANAGERS OF THE
A MERICAN F AMILY INSURANCE G ROUP, et al.,

                                            Defendants-Appellees.
                         ____________
            Appeal from the United States District Court
                for the Western District of Wisconsin.
        No. 3:07-cv-00206-bbc—Barbara B. Crabb, Chief Judge.
                         ____________

      A RGUED M AY 28, 2008—D ECIDED S EPTEMBER 2, 2008
                         ____________



 Before E ASTERBROOK, Chief Judge, and R IPPLE and
W OOD , Circuit Judges.
  E ASTERBROOK, Chief Judge. American Family Insurance
Group amended its pension plans in 1997 to allow partici-
pants to elect cash distributions (with values actuarially
equal to the participants’ vested pensions) when they
leave its employ. As amended, the plans give workers
90 days to choose whether to take lump sums immedi-
2                                               No. 07-4023

ately or annuities when they reach retirement age. Plain-
tiffs exercised the lump-sum option. Now they regret
their decisions and say that the plans should have let
them defer the choice until normal retirement age. Allow-
ing only 90 days makes people too likely to accept cash,
plaintiffs maintain. Although a lump-sum distribution
must be rolled over into another pension investment, it
can be withdrawn and spent (after a tax penalty has been
paid), leaving people with less income at retirement age.
Plaintiffs believe that they are entitled to choose
again—and, even if they have dissipated the money
they received, that they remain entitled to an annuity
once they reach retirement age.
   None of the plaintiffs is willing to restore the cash to
the pension plan. This led the district court to dismiss
the suit for want of standing. The plaintiffs got what
they asked for (immediate distribution) and can’t com-
plain about the lack of a windfall (the value of the
pension twice: once in cash and again as an annuity). But
if the Employee Retirement Income Security Act (ERISA)
entitles them to revoke their elections yet keep the cash,
it is not appropriate to dismiss the suit for lack of a case
or controversy. Pension plans may distribute their bene-
fits as lump sums only with participants’ consent,
29 U.S.C. §1053(e)(1), and plaintiffs maintain that their
consents are void because they should have had more time
to choose. The injury they assert—that monthly income
at retirement age is diminished if participants are stam-
peded into taking cash, which then burns holes in their
pockets—can be traced to the plans’ terms and can be
redressed by a judgment in plaintiffs’ favor. No more is
No. 07-4023                                                  3

required for standing. See Lujan v. Defenders of Wildlife, 

, 560–61 (1992). Plaintiffs’ claim may be weak, but
the shortcomings of a legal theory differ from a lack of
subject-matter jurisdiction. Bell v. Hood, 

(1946).
   American Family tells us that it gives departing employ-
ees only 90 days to choose because an indefinitely long
window would lead to adverse selection. Ex-employees
would be tempted to wait to see how their health and
family circumstances developed. Those whose health
deteriorated would take the lump-sum option, because
income deferred past death is useless (you can’t take it
with you) unless the participant wants to make a bequest;
likewise those without a spouse or children would take
the cash and buy an annuity that lacked survivorship
features and thus paid a higher monthly benefit. Mean-
while healthy ex-workers, and those with large families,
would take the pension option. A pension plan with
longer-lived participants, or more than the average
number of people eligible for survivors’ benefits, is more
expensive to maintain. Giving ex-workers a short time
to elect between cash and an annuity reduces the oppor-
tunity for strategic behavior that is costly not only for
the plan but also for other participants, whose benefit
levels must be cut if the employer wants to keep pension
costs stable. (This also shows another reason why plain-
tiffs suffered injury in fact: a lump-sum option open for
a brief time is worth less to the participant than an option
that is always available and can be exercised at a well
chosen moment.)
  Plaintiffs do not deny that adverse selection is the likely
outcome of a long window. But they say that the cost
4                                                 No. 07-4023

to the employer is irrelevant under 26 C.F.R.
§1.411(a)–11(c)(2)(i), which they read to provide that no
pension plan may impose a “significant detriment” on
a participant who declines the opportunity for a cash
distribution. This is the language on which plaintiffs rely:
    No consent [to immediate distribution of a lump
    sum] is valid unless the participant has received a
    general description of the material features of the
    optional forms of benefit available under the
    plan. In addition, so long as a benefit is immedi-
    ately distributable, a participant must be informed
    of the right, if any, to defer receipt of the distribu-
    tion. Furthermore, consent is not valid if a signifi-
    cant detriment is imposed under the plan on any
    participant who does not consent to a distribution.
    Whether or not a significant detriment is imposed
    shall be determined by the Commissioner by
    examining the particular facts and circumstances.
This regulation does not help plaintiffs, for two prin-
cipal reasons.
  First, although subsection (c)(2)(i) when read alone
sounds like a substantive regulation of pension plans, the
context shows otherwise. This is a tax regulation, and it
defines whether a pension plan is qualified for favorable
tax treatment (principally deferral of income tax on the
value of pension contributions). Subsection 1.411(a)–11(a)
sets out the consequence of failure to satisfy the require-
ments in the other subsections: “If the consent require-
ments or the valuation rules of this section are not satis-
fied, the plan fails to satisfy the requirements of [26
No. 07-4023                                                  5

U.S.C. §411(a)].” Section 411 spells out which plans are
“qualified trusts” meeting the standards of 26 U.S.C. §401
for tax deferral. Plaintiffs equate “not tax-qualified” with
“not lawful,” but there’s no basis for thinking that only
those pension plans eligible for tax benefits are lawful
under ERISA. See Brengettsy v. LTV Steel Hourly Pension Plan,

(7th Cir. 2001). Many pension plans provide
benefits exceeding the maximum on which taxes can be
deferred, and so are not tax-qualified, but are perfectly
lawful; likewise top-heavy plans (those that provide
extra benefits to workers with higher incomes) may be
ineligible for tax deferral but satisfy all of ERISA’s sub-
stantive rules.
  Second, even if §1.411(a)–11(c)(2)(i) established sub-
stantive requirements, it would not entitle plaintiffs to
relief. They want us to treat the need to make a prompt
choice as a “significant detriment”. That can’t be so;
subsection (c)(2)(i) says that the participant must be
informed of “the right, if any, to defer receipt of the distri-
bution” (emphasis added), which must mean the lack of
a right to defer receipt of cash is not itself a “significant
detriment”.
  Having a limited time to choose cash does not diminish
the value of a pension. Until 1997 employees who left
American Family were not entitled to lump-sum distribu-
tions; they had to wait for an annuity to commence at
retirement age. When the option to take a cash distribu-
tion was added in 1997, the value of the annuity was
unchanged. Adding a lump-sum option to an existing
(and entirely lawful) pension annuity does not create a
6                                                 No. 07-4023

“detriment” of any kind; it bestows a benefit by making
the package of options more valuable. Participants do not
lose anything (other than the opportunity to receive an
immediate distribution) by turning down the lump-
sum offer.
  Pension and welfare plans often contain limited-time
opportunities. Think of an opportunity to take early
retirement. That offer would be worth more if held open
for a longer time, but extending an offer with a short
fuse does not diminish the value of the regular pension
benefit or otherwise make the choice involuntary. As
we concluded in Henn v. National Geographic Society,

(7th Cir. 1987), an offer that increases em-
ployees’ opportunities—the sort of offer that they would
pay to receive, rather than pay to avoid—is lawful, and
the choice is binding even if with the benefit of hindsight
the employee would have made a different election.
   No more need be said about the merits, but a procedural
complication remains. After dismissing the suit, the district
court ordered plaintiffs to pay the plans’ legal fees. The
judge relied on 29 U.S.C. §1132(g), which allows fee-
shifting in ERISA actions when the loser’s position was
not substantially justified. (The statute itself is silent on
the standard; we borrowed “substantially justified” from
the Equal Access to Justice Act. See Bittner v. Sadoff &
Rudoy Industries, 

, 828–31 (7th Cir. 1984).)
Plaintiffs want us to reverse this decision. The district
court has not, however, quantified the award, and until
it does the decision is not final. See, e.g., Riley v. Kennedy,

, 1980–81 (2008); Liberty Mutual Insurance
Co. v. Wetzel, 

(1976).
No. 07-4023                                                7

  When raising this subject on appeal, plaintiffs assumed
that awards of attorneys’ fees are covered by a single
notice of appeal from the final decision on the merits.
The Supreme Court held otherwise in White v. New Hamp-
shire Department of Employment Security, 

(1982),
concluding that awards of attorneys’ fees under fee-
shifting statutes are separate decisions, separately
appealable just like awards of costs. The Court reached
this conclusion in part to prevent disputes about the
timeliness of appeals and in part so that lingering con-
troversy about attorneys’ fees would not delay appel-
late resolution of the merits, which otherwise would
have to wait for the fees to be quantified. But the upshot
of White’s approach is that decisions on the merits and
decisions about attorneys’ fees are treated as separate
final decisions, which must be covered by separate
notices of appeal—each filed after the subject has inde-
pendently become “final.” Amendments to the Federal
Rules of Civil Procedure after White fortified the distinc-
tion between a final decision on the merits and a final
decision on attorneys’ fees (or costs). See Fed. R. Civ. P.
54(d)(2), 58(e). This is why we have been able to address
the merits of plaintiffs’ appeal even though the case
remains live in the district court until the judge has told
plaintiffs how much they must pay toward the plans’ legal
expenses. And it is also why we cannot reach that
dispute—not only because the decision about fees is not
final, but also because plaintiffs have not filed a notice
of appeal concerning that decision. (A timely notice of
appeal is a jurisdictional requirement. Bowles v. Russell,

(2007).)
8                                                No. 07-4023

  Twenty-four years ago, we concluded in Bittner that
“pendent appellate jurisdiction” permits a court of
appeals to review a district court’s decision to award
attorneys’ fees to a prevailing party, even when the
fees have not been quantified and the award thus is not

–27. About a decade after Bittner,
however, the Supreme Court threw cold water on pendent
appellate jurisdiction. The Court observed in Swint v.
Chambers County Commission, 

, 43–51 (1995), that
resolving appeals from non-final decisions is not only
incompatible with 28 U.S.C. §1291 but also unnecessary,
because Congress has authorized the judiciary to adopt
rules allowing interlocutory appeals. 28 U.S.C. §1292(e).
Swint pointedly remarked that these rules must be
adopted after public notice and comment, and approval
by the Judicial Conference and the Supreme Court: in
other words, that the subject has been taken out of the
hands of the intermediate appellate courts in the federal
system. Although Swint said that it was not ruling out
all possibility of pendent appellate jurisdiction, the
Court made clear that only the most extraordinary cir-
cumstances could justify the use of whatever power the
courts of appeals possess—and that even when circum-
stances are exceptional the availability of pendent appel-
late jurisdiction is doubtful. Swint itself held that a court
of appeals had erred in invoking pendent appellate
jurisdiction, because “judicial economy” is no warrant
for disregarding the statutory final-decision rule.
  Swint supersedes Bittner, because there is nothing
extraordinary about a losing party’s desire to be rid of a fee
award before the obligation has been set. There is no
urgent need for haste, and a substantial reason to wait—for
No. 07-4023                                                   9

most awards are likely to be affirmed, and then a second
appeal will follow from the district judge’s order specify-
ing the amount of fees. Judicial economy cannot be
achieved by dividing one dispute across two appeals.
All that results from multiple appeals is delay and expense.
That’s precisely why appeal usually must await a final
decision.
  Yet although Swint pulled the rug out from under
Bittner (as did the 1993 amendments to Rules 54 and 58
specifying that the merits and awards of attorneys’ fees
are separately appealable decisions), our circuit has
proceeded as if nothing had happened. At least two of our
post-Swint opinions invoke the doctrine of pendent
appellate jurisdiction to review awards of attorneys’ fees
before the district judge had decided how much was
due. See Lorillard Tobacco Co. v. A&E Oil, Inc., 

(7th Cir. 2007); Kokomo Tube Co. v. Dayton Equipment
Services Co., 

, 621–22 (7th Cir. 1997). Neither
of these decisions mentions Swint; they proceed as if
Bittner were the last word.
  Even before Swint, four courts of appeals had disagreed
with Bittner and held that appellate resolution must be
postponed until the amount of fees has been quantified.
See Cooper v. Salomon Brothers Inc., 

, 84–85 (2d Cir.
1993); Pennsylvania v. Flaherty, 

, 1275–77 (3d
Cir. 1993); Southern Travel Club, Inc. v. Carnival Air Lines,
Inc., 

, 129–31 (5th Cir. 1993); In re Modern
Textile, Inc., 

, 1192 (8th Cir. 1990). After Swint,
another circuit joined this group. American Soda, LLP v.
U.S. Filter Wastewater Group, Inc., 

(10th Cir.
2005). And although before Swint two circuits had fol-
10                                              No. 07-4023

lowed Bittner, see Andrews v. Employees’ Retirement Plan of
First Alabama Bancshares, Inc., 

, 1247–48 & n.6
(11th Cir. 1991); Morgan v. Union Metal Manufacturing, 

, 795–96 (6th Cir. 1985) (dictum), neither of these
circuits has entertained a fee appeal under the approach
of pendent appellate jurisdiction after Swint. Indeed, as
far as we can see, no decision outside this circuit has
invoked pendent appellate jurisdiction since Swint to
entertain an appeal from an un-quantified award of at-
torneys’ fees. This circuit now stands alone.
  Bittner preceded Swint and cannot be faulted for failing
to anticipate how the Supreme Court would approach
this subject. Now that the Justices have spoken, however,
we are not justified in adhering to an approach that
perpetuates an unnecessary conflict among the circuits.
The portions of Bittner, Kokomo Tube, and Lorillard Tobacco
that invoked pendent appellate jurisdiction are over-
ruled. An appeal may be taken from an award of attorneys’
fees only after that award is independently final—which
means, after the district judge had decided how much
must be paid. This decision was circulated to all active
judges under Circuit Rule 40(e). No judge favored a
hearing en banc.
   The district court’s decision is modified to be on the
merits (as opposed to a dismissal for lack of standing), and
as so modified is affirmed. The appeal is dismissed to the
extent it seeks review of the non-final decision that plain-
tiffs must reimburse the defendants’ attorneys’ fees.

                           9-2-08