Date: Aug 21, 2026

Rule 37 Sanctions and Forfeiture After Remand: Jurisdictional Discovery Over a Relief Defendant Proceeds Absent Timely Objection

I. Introduction

SEC v. Gastauer (1st Cir. Aug. 19, 2026) arises from an SEC civil enforcement action alleging that Michael Gastauer participated in a securities-fraud scheme enabling insiders to sell stock while evading registration and disclosure rules. The SEC also named Michael’s father, Raimund Gastauer—a German national—as a “relief defendant”, seeking disgorgement of approximately $3.3 million allegedly transferred from Michael’s U.S.-based companies to Gastauer or for his benefit.

The key procedural issue was personal jurisdiction over a foreign relief defendant. In an earlier appeal, the First Circuit held that the district court could not establish jurisdiction by imputing the defendant-in-interest’s forum contacts to the relief defendant (SEC v. Gastauer (Gastauer I), 93 F.4th 1 (1st Cir. 2024)). On remand, the SEC sought jurisdictional discovery into Gastauer’s own U.S. contacts. Gastauer refused to participate, insisted (through communications to the SEC) on Hague Convention procedures, filed nothing with the district court, and did not appear at hearings. The district court sanctioned him under Rule 37 by deeming jurisdictional facts admitted and reinstated summary judgment and disgorgement.

This appeal asked whether Gastauer could resurrect objections—mandate rule, the propriety of jurisdictional discovery, and the Hague Convention—after declining to raise them in the district court on remand.

II. Summary of the Opinion

The First Circuit (Kayatta, J.) affirmed. It held that Gastauer’s challenges to the remand proceedings were forfeited (at minimum) because he did not present them to the district court after remand. The court declined to excuse that forfeiture under any standard (whether plain-error review in civil cases or the narrow discretionary review sometimes available for waived issues). Because Gastauer refused to litigate below, he could not on appeal complain about (1) the district court’s decision to permit jurisdictional discovery, (2) the use of the Federal Rules rather than the Hague Convention for that discovery, or (3) an alleged violation of the mandate rule.

III. Analysis

A. Precedents Cited

1. The controlling backdrop: relief-defendant jurisdiction and disgorgement

SEC v. Gastauer (Gastauer I), 93 F.4th 1 (1st Cir. 2024): The first appeal rejected the district court’s imputed-contacts theory, holding that “due process prohibits the imputation of contacts to a relief defendant like Gastauer, whose only involvement in the case is his receipt of a unilateral transfer of money from a third party.” Importantly, Gastauer I noted the SEC had not argued on appeal that Gastauer had actual U.S. contacts and therefore the court addressed only the imputation theory.
SEC v. Sanchez-Diaz, 88 F.4th 81 (1st Cir. 2023) (quoting SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), and SEC v. Smith, 710 F.3d 87 (2d Cir. 2013)): The opinion uses these cases to define “relief defendants” as “third-party non-wrongdoers” believed to possess ill-gotten gains.
SEC v. Colello, 139 F.3d 674 (9th Cir. 1998): Cited (via Sanchez-Diaz) for disgorgement as equitable recovery of ill-gotten gains.
SEC v. Knox (Knox I), 2022 WL 1912877 (D. Mass. June 3, 2022); SEC v. Knox (Knox II), 2022 WL 6156565 (D. Mass. Oct. 7, 2022); SEC v. Knox (Knox III), 2025 WL 330557 (D. Mass. Jan. 29, 2025): These district-court orders are the procedural spine—partial summary judgment, sanctions for discovery violations, and later reinstated judgment after remand.

2. Jurisdictional discovery and discovery sanctions establishing jurisdictional facts

Motus, LLC v. CarData Consultants, Inc., 23 F.4th 115 (1st Cir. 2022) (misquoting United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (1st Cir. 2001)): Sets the threshold for jurisdictional discovery: a “colorable claim of jurisdiction,” i.e., a non-frivolous factual dispute that could yield personal jurisdiction. This framed what Gastauer needed to challenge on remand—but he did not.
Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982): Central to the court’s treatment of Gastauer’s refusal to participate. It supports the proposition that a court may sanction noncompliance with jurisdictional discovery by deeming jurisdictional facts established, and that the resulting legal consequence (personal jurisdiction) does not undermine the sanction’s appropriateness.

3. Preservation, forfeiture/waiver, and standards of review

Nat'l Fed'n of the Blind v. The Container Store, Inc., 904 F.3d 70 (1st Cir. 2018): Illustrates the First Circuit’s practice of sometimes applying plain-error review to forfeited arguments in civil cases.
Nat'l Ass'n of Soc. Workers v. Harwood, 69 F.3d 622 (1st Cir. 1995); Dahua Tech. USA, Inc. v. Zhang, 138 F.4th 1 (1st Cir. 2025): Stand for the stricter approach: waived issues are not reviewed absent “the most extraordinary circumstances,” as a matter of discretion.
United States v. Johnson, 177 F.4th 67 (1st Cir. 2026); United States v. Benjamin-Hernandez, 49 F.4th 580 (1st Cir. 2022): Used to describe the plain-error framework and to hold that Gastauer “definitively waive[d]” plain-error review by not arguing it.
United States v. Slade, 980 F.2d 27 (1st Cir. 1992); Dynamic Image Techs., Inc. v. United States, 221 F.3d 34 (1st Cir. 2000): Reinforce the “bedrock rule” that arguments must be presented to the district court; failing to oppose below raises the issue “too late” on appeal.
United States v. Scott, 705 F.3d 410 (9th Cir. 2012): Cited for the principle that a party can forfeit a waiver argument by failing to assert it.

4. Mandate rule and law-of-the-case constraints

United States v. Moran, 393 F.3d 1 (1st Cir. 2004): Defines the mandate rule: issues decided explicitly or implicitly by an appellate court may not be relitigated on remand. The First Circuit used this to frame Gastauer’s mandate-rule claim—then disposed of it for failure to raise it below.
United States v. Cheveres-Morales, 83 F.4th 34 (1st Cir. 2023): Recognizes the First Circuit may raise mandate violations sua sponte, but only where equities and institutional interests strongly support review. The court contrasted Cheveres-Morales with Gastauer’s self-created posture (stonewalling) and expressed doubt that the mandate was violated at all.
United States v. Wallace, 573 F.3d 82 (1st Cir. 2009); Unión Internacional UAW, Loc. 2415 v. Bacardí Corp., 8 F.4th 44 (1st Cir. 2021) (quoting United States v. Bell, 988 F.2d 247 (1st Cir. 1993)): Support the “law of the case” principle: issues unchallenged on appeal when the opportunity exists become binding in later stages. This underpinned the court’s suggestion that Gastauer’s failure to pursue his Hague Convention arguments in the first appeal may have foreclosed later review.

5. Hague Evidence Convention and the Federal Rules

Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct., 482 U.S. 522 (1987): Cited for the Hague Convention’s role as a mechanism for cross-border evidence gathering, contextualizing Gastauer’s insistence on Hague procedures.
In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288 (3d Cir. 2004): Used to distinguish “merits” discovery from typically narrower jurisdictional discovery, relevant to preservation and the scope of Gastauer’s prior objections.
Prac. Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543 (D.C. Cir. 1987) (Ginsburg, J.): Cited to clarify that participating to preserve jurisdictional objections does not necessarily waive them—undercutting any rationale for Gastauer’s total disengagement.

B. Legal Reasoning

1. The court decided the appeal on preservation and procedural accountability

The opinion’s organizing premise is straightforward: after Gastauer I removed the imputed-contacts basis for jurisdiction, the litigation properly shifted to whether Gastauer’s own conduct supplied minimum contacts. The district court allowed targeted discovery to test that question. Gastauer responded not by litigating, but by refusing to respond, refusing to comply, and refusing to appear. The First Circuit treated his appellate objections as untimely attempts to relitigate remand management choices he never put before the trial judge.

2. Mandate rule: forfeiture first, merits unnecessary

Gastauer argued that Gastauer I required dismissal and therefore barred jurisdictional discovery. The First Circuit held the argument forfeited because it was never presented on remand. It also explained why sua sponte review (as in Cheveres-Morales) was unwarranted: the court doubted any mandate violation occurred because Gastauer I did not order dismissal or prohibit jurisdictional discovery, and equities did not favor a litigant whose own refusal to participate precipitated the outcome.

3. Jurisdictional discovery: a distinct issue requiring a distinct objection

Gastauer attempted to rely on his long-standing “no personal jurisdiction” defense as if it automatically objected to jurisdictional discovery. The court rejected that move, stressing the lower threshold for jurisdictional discovery (a “colorable claim of jurisdiction” under Motus/Swiss Am. Bank) and the principle that a defendant cannot block reasonable jurisdictional discovery while contesting jurisdiction.

4. Rule 37 and jurisdiction-by-sanction: consistent with due process

Once jurisdictional discovery was ordered, Gastauer’s noncompliance triggered Rule 37 consequences expressly contemplated by the district court’s warning: sanctions “up to and including establishing as admitted jurisdictional facts.” The First Circuit treated this as a permissible application of Rule 37(b), aligned with Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, which recognizes that a court can deem jurisdictional contacts established when a party’s noncompliance obstructs fact development.

5. Hague Convention objections must be made to the court—and timely

Gastauer’s German counsel repeatedly told the SEC he would only participate if discovery and service flowed through Hague channels, but he did not file objections with the district court. The First Circuit held that communications to opposing counsel do not preserve issues for appeal, even if opposing counsel shares them with the court. The preservation rule serves administrability and fairness: courts act on motions and filings, not side correspondence.

The court further explained that Gastauer’s earlier Hague Convention argument (made before Gastauer I) was directed at merits discovery, not the post-remand jurisdictional discovery. Even if that earlier objection could be stretched to cover later events, Gastauer did not pursue the issue in the first appeal, risking law-of-the-case consequences under Wallace and Unión Internacional UAW, Loc. 2415 v. Bacardí Corp..

C. Impact

Appellate review is not a substitute for remand litigation. The decision reinforces that parties must litigate objections when the district court can address them, especially after a remand that reopens factual development.
Jurisdictional discovery is procedurally “lighter” than jurisdiction itself. A defendant’s general jurisdictional objection does not automatically bar discovery; an explicit and timely challenge to the discovery predicate is required.
Noncompliance can “supply” missing jurisdictional facts through sanctions. In cross-border cases, the opinion highlights a practical truth: if a party refuses to participate in ordered jurisdictional discovery, Rule 37 may allow the court to deem jurisdictional facts established, converting obstruction into a loss on jurisdiction.
Hague Convention arguments must be raised by proper vehicle and at the proper time. The ruling discourages strategic insistence on Hague procedures without litigating the issue through motions and appearances.
Relief defendants remain protected from imputed-contacts theories, but not from procedural consequences. While Gastauer I tightened due process limits, SEC v. Gastauer clarifies that the protection does not extend to allowing a relief defendant to disengage and later collaterally attack remand orders.

IV. Complex Concepts Simplified

Relief defendant: A person not accused of wrongdoing but alleged to possess money traceable to someone else’s securities-law violations; the SEC seeks equitable return of those funds.
Personal jurisdiction: The court’s power to bind a particular person. For a foreign defendant, it generally requires constitutionally sufficient “minimum contacts” with the forum.
Jurisdictional discovery: Limited fact-finding allowed when there is a plausible basis to think jurisdiction may exist, even if the current record is incomplete.
Forfeiture vs. waiver: Forfeiture is failing to timely raise an issue (often leading to limited, “plain error” review). Waiver is intentional relinquishment (often no review absent extraordinary circumstances). The court treated Gastauer’s silence as at least forfeiture and declined to excuse it.
Mandate rule / law of the case: After an appellate decision, the district court must follow what the appellate court decided; issues not raised when an appeal was available may become binding in later stages.
Rule 37 sanctions: Penalties for disobeying discovery orders. One permitted sanction is deeming certain facts established—here, facts supporting personal jurisdiction.
Hague Evidence Convention: An international treaty providing formal mechanisms for obtaining evidence abroad. U.S. courts may still permit discovery under the Federal Rules depending on context and rulings; in any event, the objection must be made to the court, not just to the opposing party.

V. Conclusion

SEC v. Gastauer is less about redefining substantive jurisdiction doctrine than about enforcing the procedural conditions for contesting it after remand. Having obtained the benefit of Gastauer I (no imputed contacts), Gastauer declined to litigate the remand question—his own forum contacts—and refused ordered discovery. The First Circuit held he could not later appeal remand rulings he never asked the district court to address. The decision underscores that cross-border defendants and relief defendants must preserve objections through proper filings and participation, or risk Rule 37 sanctions that treat jurisdictional facts as established and leave little for appellate review.