Douglas v. Merck & Co., 2012 U.S. App. LEXIS 1288 (2d Cir. Jan. 23, 2012):

Attorney Gary Douglas, counsel to plaintiff Shirley Boles during the trial of her products liability action against defendant Merck & Co., Inc. ("Merck"), appeals the district court's October 4, 2010 order imposing on him a $2,500 sanction for improperly suggesting in summation that the jury should use its verdict to punish Merck. Douglas contends that the district court abused its discretion in sanctioning him under its inherent power***.

Douglas acknowledges that the challenged sanctions order was not a "final decision[]," 28 U.S.C. § 1291.... Nevertheless, Douglas argues that interlocutory appeal is supported by the collateral order doctrine, which affords appellate jurisdiction over a "small category of orders that do not terminate the litigation," but (1) conclusively determine the disputed question, (2) resolve an important question separate from the merits, and (3) "are effectively unreviewable on appeal from the final judgment in the underlying action." Cunningham v. Hamilton Cnty., 527 U.S. 198, 204 (1999) (internal quotation marks omitted).

Setting aside the question of whether Cunningham's categorical approach to appealability, see 527 U.S. at 206 (emphasizing that the Court has "eschewed a case-by-case approach to deciding whether an order is sufficiently collateral"), applies to inherent power sanctions, Douglas fails to satisfy the separateness and unreviewability prongs of the collateral order doctrine. The sanctions order was prompted by summation argument inextricably intertwined with the merits of the district court's decision to set aside the jury's damages award, a matter that may well come before this court on appeal from a final judgment after retrial. See Rangolan v. County of Nassau, 370 F.3d 239, 244 (2d Cir. 2004) (observing that plaintiff offered conditional remittitur preserves appellate rights only by submitting to new trial). Thus, because the sanctions inquiry now urged "would differ only marginally from an inquiry into the merits," Cunningham v. Hamilton Cnty., 527 U.S. at 206, the collateral order doctrine does not apply here.

Footnote 1. Several of our sister circuits have concluded that Cunningham's holding is not limited to Rule 37 discovery sanctions. See Stanley v. Woodford, 449 F.3d 1060, 1063-65 (9th Cir. 2006) (concluding that Cunningham abrogated precedent permitting interlocutory appeals of inherent-power sanctions, and citing with approval New Pac. Overseas Grp. (U.S.A.) Inc. v. Excal Int'l Dev. Corp., 252 F.3d at 669-70); Comuso v. National R.R. Passenger Corp., 267 F.3d 331, 339 (3d Cir. 2001) (interpreting Cunningham to adopt "a per se rule that sanctions orders are inextricably intertwined with the merits of the case" and accordingly abrogating precedent permitting interlocutory appeals of Fed. R. Civ. P. 11 and discovery sanctions); Empresas Omajede, Inc. v. Bennazar-Zequeira, 213 F.3d 6, 9 n.4 (1st Cir. 2000) (observing that Cunningham confirmed circuit precedent holding that inherent-power sanctions against attorneys are not immediately appealable).

Further, although a final order in this case awaits retrial, that circumstance only delays Douglas's ability to appeal the sanctions order; it does not render that order unreviewable. Whenever and however a final judgment is entered, "an attorney may appeal a decision where the district court imposes a tangible sanction or makes an express finding that a lawyer has committed specific acts of professional misconduct." ***