Second Circuit: Rule 37(b) Attorney Sanctions—Including MDL Leadership Removal and Common Benefit Restrictions—Are Not Immediately Appealable Under the Collateral Order Doctrine

Introduction

In In re: Terrorist Attacks on September 11, 2001, No. 23-1170-cv (2d Cir. Sept. 10, 2025), the U.S. Court of Appeals for the Second Circuit dismissed for lack of jurisdiction an interlocutory appeal by Kreindler & Kreindler LLP, a plaintiffs’ firm sanctioned for violating protective orders in the 9/11 multidistrict litigation (MDL) against the Kingdom of Saudi Arabia. The sanctions—imposed under Federal Rule of Civil Procedure 37(b) by Magistrate Judge Netburn and affirmed by District Judge Daniels—removed the firm from the Plaintiffs’ Executive Committee (PEC), awarded attorney’s fees to Saudi Arabia, and barred the firm from future common benefit funds for post-leak work.

The core issue was procedural: whether such Rule 37(b) attorney sanctions are immediately appealable under the collateral order doctrine. The Second Circuit, applying a categorical approach rooted in Supreme Court precedent, held that they are not. Even where sanctions have serious practical effects—such as stripping MDL leadership status—the order does not qualify for interlocutory appeal because it neither resolves important questions separate from the merits nor is effectively unreviewable after final judgment.

Summary of the Opinion

Writing for a unanimous panel (Judges Calabresi, Lohier, and Nathan), Judge Lohier concluded:

A Rule 37(b) sanctions order against attorneys for discovery violations does not fall within the “small class” of decisions immediately appealable under the collateral order doctrine.
Although the sanctions order conclusively determined the issue (prong one), it failed the second and third prongs:
- The order was not “separate from the merits” because the district court’s sanctions analysis was intertwined with the importance of the leaked information and the effect of sanctions on the MDL’s progress.
- The order is effectively reviewable after final judgment, given the “identity of interests” between client and counsel; Kreindler & Kreindler continues to represent clients, preserving future appellate review.
The panel rejected Kreindler & Kreindler’s argument that it was a “nonparty” for appeal purposes under a protective-order definition; attorneys are not “like other nonparties” for appellate jurisdiction.
The firm’s reliance on Farber v. Riker-Maxson Corp. (2d Cir. 1971) was unavailing; subsequent Supreme Court decisions effectively overruled earlier Second Circuit practice on immediate appeals of attorney sanctions.
The appeal was dismissed for lack of jurisdiction; the panel noted mandamus remains the extraordinary path for exceptional cases (the firm’s prior mandamus petition had been denied).

Case Background

The 9/11 MDL consolidates hundreds of cases alleging that various defendants, including the Kingdom of Saudi Arabia, provided material support to al Qaeda. Given the sensitivity and publicity surrounding the litigation, the district court issued a 2006 general protective order and a 2018 FBI protective order. Both barred disclosure of confidential deposition transcripts for at least 30 days.

In 2017, Kreindler & Kreindler received a “first warning” after a firm researcher, John Fawcett, described a confidential document to a reporter. The episode resulted in no sanctions but underscored the importance of compliance. In June 2021, after the deposition of former Saudi official Musaed Al Jarrah, Yahoo! News published details from the transcript—prompting a sanctions motion when the leak came to light. Following a two-day evidentiary hearing, Magistrate Judge Netburn found a willful breach and a deceptive response by the firm and imposed sanctions under Rule 37(b). Judge Daniels affirmed. After an unsuccessful mandamus petition, the firm filed an interlocutory appeal invoking the collateral order doctrine.

Analysis

Precedents Cited and Their Influence

Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985): The Supreme Court held that attorney-disqualification orders in civil cases are not immediately appealable because they are not sufficiently separable from the merits. The Court rejected case-by-case evaluation in favor of a categorical approach. This decision anchors the “separateness” analysis here.
Cunningham v. Hamilton County, 527 U.S. 198 (1999): The Supreme Court extended the categorical approach to discovery sanctions, holding that Rule 37(a) sanctions against an attorney are not immediately appealable because they are often “inextricably intertwined” with the merits and are effectively reviewable after final judgment due to the “identity of interests” between attorney and client. Cunningham provides the central template for the Second Circuit’s treatment of Rule 37(b) sanctions here.
Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009): Reinforced that the collateral order doctrine is narrow and that alternative mechanisms—post-judgment appeal, mandamus—often suffice. This bolsters the Second Circuit’s insistence on deferring review.
Will v. Hallock, 546 U.S. 345 (2006): Articulated the three-prong collateral order test (conclusiveness, separateness, and effective unreviewability) and cautioned against expanding the doctrine. The Second Circuit applies this framework rigorously.
Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994): Endorsed categorical assessment of classes of orders for collateral-order purposes, discouraging case-specific exceptions—an approach the panel follows.
New Pacific Overseas Group (U.S.A.) Inc. v. Excal International Development Corp., 252 F.3d 667 (2d Cir. 2001): The Second Circuit held that orders imposing Rule 37 sanctions against an attorney are not “final decisions” under § 1291, aligning circuit practice with Cunningham. The opinion here reaffirms that principle.
Linde v. Arab Bank, PLC, 706 F.3d 92 (2d Cir. 2013): Confirmed that Rule 37(b) sanctions against parties are not immediately appealable; emphasized mandamus as the “escape hatch” in exceptional circumstances. The panel relies on Linde’s logic and mandamus reminder.
S.E.C. v. Smith, 710 F.3d 87 (2d Cir. 2013): Noted in a footnote that some sanction types might be immediately appealable if Cunningham’s rationale does not apply, citing the Ninth Circuit’s Stanley v. Woodford. The panel acknowledges this theoretical space but concludes Cunningham’s rationale does apply here.
In re ALBA Petróleos de El Salvador S.E.M. de C.V., 82 F.4th 105 (2d Cir. 2023): Clarified that an issue is not separate from the merits if appellate review requires engagement with the nature and content of merits proceedings. The panel uses this to show the sanctions analysis here was intertwined with merits-related considerations.
Banque Nordeurope S.A. v. Banker, 970 F.2d 1129 (2d Cir. 1992): Stressed that collateral orders should present important legal questions guiding other cases, not fact-bound determinations. The panel finds the sanctions order here is case-specific.
Farber v. Riker-Maxson Corp., 442 F.2d 457 (2d Cir. 1971): Previously allowed appeal from certain orders restricting nonlead counsel. The panel distinguishes Farber and notes later Supreme Court authorities “effectively overruled” prior practice regarding appealability of attorney sanctions.

Legal Reasoning

The court applied the collateral order doctrine’s three prongs to the category of Rule 37(b) attorney sanctions. The sanctions order here was conclusive, but it failed the other two prongs:

Not separate from the merits. The panel emphasized that the district court’s sanction analysis required it to evaluate merits-adjacent factors, such as:
- the significance of the leaked deposition to the MDL’s claims;
- whether evidentiary preclusion would be sufficient given the transcript’s limited utility (“not particularly revelatory” or “helpful to the case”); and
- the effect of removing Kreindler & Kreindler from MDL leadership on plaintiffs and the overall litigation trajectory.
These considerations are “inextricably intertwined with the merits,” tracking Cunningham’s logic and ALBA Petróleos’ separateness principle.
Effectively reviewable after final judgment. Citing Cunningham and reaffirming the “identity of interests between the attorney and client,” the panel held that post-judgment review is adequate. Kreindler & Kreindler continues to represent clients in the MDL, so an eventual appeal by the clients can encompass review of the sanctions. If the sanctions are later vacated, the court noted, relief can be fashioned (e.g., addressing fees and common-benefit consequences). Attorneys are not treated as unrelated nonparties for appellate purposes, despite “nonparty” language in protective orders.

The court also rejected two key attempts to evade Cunningham’s categorical bar:

“Nonparty” label under protective orders. The firm argued that as a nonparty under the protective orders, it lacked a viable route to eventual review. The court countered that, for appealability, attorneys are not “like other nonparties.” They act within the litigation to represent clients and share overlapping interests that preserve appellate review pathways.
Reliance on Farber (1971). Farber involved restrictions on nonlead counsel filing motions in a consolidated action. The panel found that case inapposite and, in any event, overtaken by Richardson-Merrell and Cunningham, which adopted a categorical approach disfavoring immediate appeals of attorney disqualification and sanctions orders.

Finally, consistent with Mohawk and Linde, the panel underscored that mandamus remains available for truly extraordinary circumstances—though it had already denied Kreindler & Kreindler’s petition in this matter.

Impact

The decision cements, within the Second Circuit, a categorical rule that bears directly on high-stakes MDLs and complex litigation:

MDL leadership sanctions must wait for final judgment. Even significant sanctions that remove counsel from MDL leadership or bar access to common benefit funds are not immediately appealable. This strengthens district courts’ ability to enforce protective orders and manage sprawling MDLs without piecemeal appellate interference.
Protective-order compliance is paramount. The opinion underscores that deliberate breaches and misleading submissions can yield severe, leadership-dispositive consequences—and that these consequences will stand during the litigation absent mandamus.
Strategic recalibration for counsel. Firms facing sanctions should anticipate litigating to final judgment before obtaining appellate review. Practical responses include seeking a stay in the district court, pursuing internal compliance reforms, and reserving mandamus for truly exceptional hardship or judicial usurpation.
Limited space for collateral-order appeals. The panel acknowledges prior dicta (SEC v. Smith) that some sanction types might be immediately appealable if Cunningham’s rationale does not apply. But the categories likely to fit that exception are narrow and were not implicated here.

Complex Concepts Simplified

Collateral Order Doctrine. A narrow exception to the “final judgment rule.” To appeal before the case ends, the order must be conclusive, separate from the merits, and effectively unreviewable later. Most discovery and sanctions orders fail these tests.
Rule 37(b) Sanctions. Remedies imposed for violating a court’s discovery order, including monetary sanctions, evidentiary preclusion, dismissal, and, as here, leadership removal and fee shifting. Rule 37(a) governs motions to compel; Cunningham applied to 37(a) sanctions but its logic extends to 37(b), as the Second Circuit confirms.
“Identity of Interests.” For appealability, courts presume attorneys and clients share aligned interests. That alignment supports waiting for final judgment, where the client’s appeal can encompass challenges to sanctions on counsel.
MDL PEC and Common Benefit Funds. The Plaintiffs’ Executive Committee organizes and leads common work in an MDL; common benefit funds compensate work that benefits all plaintiffs. Sanctions affecting PEC roles and fund eligibility are powerful tools to police compliance.
Mandamus. An extraordinary writ used to correct clear abuses of discretion or usurpations of judicial power. It is not a substitute for appeal; it is reserved for truly exceptional situations where normal appellate routes are inadequate.

Practical Takeaways

Expect no immediate appeal from Rule 37(b) sanctions against attorneys, even if the sanction is leadership removal or a bar from common benefit funds.
Build robust protective-order compliance programs—train personnel, audit communications with the press, and promptly conduct credible, documented internal investigations if a breach is suspected.
When sanctions loom, consider:
- requesting a stay of the sanction from the district court;
- seeking certification for interlocutory review under 28 U.S.C. § 1292(b) if a controlling and pure legal question exists (though many sanctions issues are case-specific and will not qualify);
- pursuing mandamus only in extraordinary cases; and
- ensuring the record preserves all objections for eventual post-judgment appeal.
Do not assume a “nonparty” label in a protective order translates into nonparty status for appealability. Attorneys remain bound to clients in ways that preserve later review.

Key Passages from the Opinion

“We hold that a Rule 37(b) sanctions order imposed on attorneys for discovery violations is not immediately appealable under the collateral order doctrine because it is effectively reviewable after final judgment and does not resolve important questions separate from the merits.”

“These considerations are, in our view, ‘inextricably intertwined with the merits of the action.’”

“The firm was sanctioned for conduct undertaken while representing its clients in this litigation, and … it continues to represent those clients in the MDL. ‘[T]he decision to appeal should turn entirely on the client’s interest,’ not an ‘attorney’s personal desire for vindication.’”

Open Questions and Boundaries

The Second Circuit again leaves open whether some unusual sanction categories might be immediately appealable if Cunningham’s rationales do not apply (e.g., where no client relationship remains to facilitate later review). But the opinion confirms that such exceptions are narrow and do not include MDL leadership sanctions.
The decision does not alter the availability of mandamus for exceptional circumstances. It does, however, signal that mandamus should be reserved for instances of clear judicial overreach or irreparable harm beyond ordinary litigation burdens.

Conclusion

This opinion firmly situates Rule 37(b) attorney sanctions within the Second Circuit’s categorical bar on collateral-order appeals—extending Cunningham’s logic to substantial, practice-altering sanctions in MDLs, such as removal from a Plaintiffs’ Executive Committee and common benefit restrictions. By emphasizing both the entanglement with merits issues and the adequacy of post-judgment review via the attorney–client “identity of interests,” the court reinforces the narrowness of the collateral order doctrine and the primacy of district court case-management authority in complex litigation.

For practitioners, the decision is a cautionary tale on protective-order compliance and candor to the court. It also serves as a procedural waypoint: barring extraordinary circumstances warranting mandamus, challenges to attorney sanctions must wait until final judgment. In the broader legal landscape, the opinion helps stabilize appellate jurisdiction doctrine in discovery-sanctions contexts and provides clear guidance for MDL courts and counsel on the consequences—and appellate posture—of sanctions for protective-order violations.

Disclaimer: This commentary is for informational purposes only and does not constitute legal advice.