FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KLESTADT & WINTERS, LLP; TRACY
L. KLESTADT,
Petitioners-Appellants,
v.
DONNA CANGELOSI; CERTAIN DIRECT No. 10-16970
LENDERS, D.C. No.
Respondents-Appellees, 09-32824-RCJ
and
WILLIAM A. LEONARD, Chapter 7
Trustee,
Trustee-Appellee.
BRYAN CAVE LLP; KATHERINE M.
WINDLER,
Petitioners-Appellants,
v.
DONNA CANGELOSI; CERTAIN DIRECT No. 10-16972
LENDERS, D.C. No. BK-S-
Respondents-Appellees, 09-32824-RCJ
and
WILLIAM A. LEONARD, Chapter 7
Trustee,
Trustee-Appellee.
2549
2550 KLESTADT & WINTERS v. CANGELOSI
SILAR ADVISORS, LP; SARA
PFROMMER; ROBERT LEEDS; JAY
GRACIN,
Petitioners-Appellants,
No. 10-16974
v.
D.C. No.
DONNA CANGELOSI; CERTAIN DIRECT
LENDERS, BK-S-
09-32824-RCJ
Respondents-Appellees,
OPINION
and
WILLIAM A. LEONARD, Chapter 7
Trustee,
Trustee-Appellee.
Appeals from the United States District Court
for the District of Nevada
Robert C. Jones, Chief District Judge, Presiding
Argued and Submitted
October 27, 2011—San Francisco, California
Filed March 6, 2012
Before: Susan P. Graber and Sandra S. Ikuta, Circuit Judges,
and Gordon J. Quist,* Senior District Judge.
Opinion by Judge Ikuta;
Concurrence by Judge Quist;
Partial Concurrence and Partial Dissent by Judge Graber
*The Honorable Gordon J. Quist, Senior United States District Judge
for the Western District of Michigan, sitting by designation.
KLESTADT & WINTERS v. CANGELOSI 2553
COUNSEL
Stanley J. Panikowski (argued), DLA Piper LLP, San Diego,
California, for petitioners-appellants Klestadt & Winters, LLP
and Tracy Klestadt.
J. Stephen Peek, Holland & Hart LLP, Las Vegas, Nevada,
for petitioners-appellants Bryan Cave LLP and Katherine
Windler.
J. Thomas Beckett (argued), Mark W. Dykes, Parsons Behle
& Latimer, Salt Lake City, Utah, for petitioners-appellants
Silar Advisors LP, et al.
Robert M. Millimet (argued), Michael J. Collins, Bickel &
Brewer, Dallas, Texas; Janet L. Chubb, Armstrong Teasdale
LLP, Reno, Nevada; Lisa A. Rasmussen, Las Vegas, Nevada,
for respondents-appellees Donna Cangelosi and Certain
Direct Lenders.
OPINION
IKUTA, Circuit Judge:
Silar Advisors, LP, Robert Leeds, Jay Gracin, and Sara P
frommer (collectively “the Silar Parties”), and Tracy
2554 KLESTADT & WINTERS v. CANGELOSI
Klestadt and Klestadt & Winters, LLP, Katherine M. Windler,
and Bryan Cave, LLP (collectively “Counsel”), appeal the
district court’s order imposing sanctions on them pursuant to
Rule 9011 of the Federal Rules of Bankruptcy Procedure and
the district court’s inherent powers. We must decide whether
the district court’s order is immediately appealable. We hold
that it is not and dismiss the appeal for lack of jurisdiction.
I
The Silar Parties are the owners and officers of Asset Reso-
lution, LLC, which serviced loans that were funded in part by
appellee lenders. Asset Resolution is the sole member and
manager of fourteen special purpose limited liability compa-
nies. Asset Resolution and these special purpose companies
(collectively “Debtors”) have each filed a petition in bank-
ruptcy. The appellees here are the lenders (now creditors in
the bankruptcy proceeding) and the bankruptcy trustee, both
of whom were awarded sanctions against the Silar Parties and
Counsel.
Debtors’ bankruptcy proceedings are the latest in a compli-
cated series of legal proceedings involving these various par-
ties. In 2007, before the bankruptcy proceedings commenced,
the lenders and Silar Advisors’ predecessor-in-interest began
to dispute their respective rights to proceeds under the rele-
vant loan servicing agreements. As a result, the lenders
brought a lawsuit in Nevada district court to clarify their con-
tractual rights under these servicing agreements. While this
contract dispute was ongoing, Silar Advisors, which held a
security interest in the disputed servicing agreements, fore-
closed on its collateral and assigned its interest in the agree-
ments to its newly formed subsidiary, Asset Resolution.
Subsequently, the lenders added Silar Advisors and Asset
Resolution as defendants in the contract dispute lawsuit.
During the summer of 2009, the Nevada district court pre-
siding over the contract suit issued a series of orders regarding
KLESTADT & WINTERS v. CANGELOSI 2555
the compensation owed to Asset Resolution under the dis-
puted loan servicing agreements. Among other things, the
orders awarded Asset Resolution substantially less than the
full amount of servicing fees it had requested. In October
2009, Debtors filed chapter 11 petitions in the bankruptcy
court for the Southern District of New York. This bankruptcy
case was transferred to the bankruptcy court for the District
of Nevada in November 2009. On January 25, 2010, the
Nevada district judge presiding over the contract dispute
entered an order withdrawing the reference for the entire
bankruptcy case. Four days later, that Nevada district court,
now sitting as a bankruptcy court, converted Debtors’ chapter
11 bankruptcy filing to a chapter 7 proceeding.
On February 9, 2010, the lenders filed a motion for sanc-
tions against the Silar Parties and Counsel. The district court
granted the motion, holding that sanctions under Federal Rule
of Bankruptcy Procedure 90111 and the court’s inherent pow-
ers were appropriate because the underlying bankruptcy case
was filed “for improper purposes and [was] frivolous.” In sup-
port of this holding, the district court found that the Silar Par-
ties “never had any intention or ability to reorganize” Asset
Resolution, which was merely a “shell entity” without any
assets to reorganize. Further, the Nevada district court found
that Debtors’ bankruptcy filing in the Southern District of
New York was solely an attempt to evade the district court’s
jurisdiction and, specifically, the allegedly adverse impact of
its orders over the summer of 2009.
The district court’s sanctions order made the Silar Parties
and Counsel jointly and severally liable for some $279,615 in
1
Rule 9011 is the bankruptcy equivalent of Rule 11 of the Federal Rules
of Civil Procedure. See Miller v. Cardinale (In re DeVille), 361 F.3d 539,
550 n.5 (9th Cir. 2004). It allows a court to issue sanctions if, among other
things, the court determines that a filing is “presented for any improper
purpose, such as to harass or to cause unnecessary delay” or “the claims,
defenses, and other legal contentions” in the filing are frivolous. Fed. R.
Bankr. P. 9011(b)-(c).
2556 KLESTADT & WINTERS v. CANGELOSI
sanctions, an amount based on the lenders’ attorney’s fees and
expenses. The district court also ordered Counsel to disgorge
its retainers ($300,000 each) received for filing and litigating
the underlying bankruptcy case. The Silar Parties and Counsel
appealed.
II
[1] We have jurisdiction over appeals from a district court
sitting in bankruptcy under 28 U.S.C. § 1291.2 Klenske v. Goo
(In re Manoa Fin. Co.), 781 F.2d 1370, 1372 (9th Cir. 1986)
(per curiam). Section 1291 provides that federal appellate
courts, with certain exceptions not applicable here, “shall
have jurisdiction of appeals from all final decisions of the dis-
trict courts of the United States.” A “final decision” is one
that “ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment.” Catlin v. United
States, 324 U.S. 229, 233 (1945). The Supreme Court has
construed § 1291 slightly more broadly than its narrow lan-
guage would suggest, holding that it gives appellate courts
jurisdiction over a “small class” of interlocutory orders that
are nevertheless appealable “final decisions.” See Cohen v.
Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949).
These appealable collateral orders “must [1] conclusively
determine the disputed question, [2] resolve an important
issue completely separate from the merits of the action, and
[3] be effectively unreviewable on appeal from a final judg-
ment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 468
(1978). “Because collateral jurisdiction requires all three ele-
ments, we lack collateral order jurisdiction if even one is not
2
Section 1291 provides, in pertinent part:
The courts of appeals (other than the United States Court of
Appeals for the Federal Circuit) shall have jurisdiction of appeals
from all final decisions of the district courts of the United States,
. . . except where a direct review may be had in the Supreme
Court.
28 U.S.C. § 1291.
KLESTADT & WINTERS v. CANGELOSI 2557
met.” McElmurry v. U.S. Bank Nat’l Ass’n, 495 F.3d 1136,
1140 (9th Cir. 2007).
The Silar Parties and Counsel do not claim that the sanc-
tions order in this case meets Cohen’s tests. Instead, they
assert that we may hear their appeal of the sanctions order in
light of the more flexible jurisdictional principles that apply
in bankruptcy. See Benny v. England (In re Benny), 791 F.2d
712, 718 (9th Cir. 1986) (recognizing that “the general stan-
dards for appealability of bankruptcy orders are broader and
more flexible than those that apply to ordinary civil cases.”).
[2] This argument overlooks the fact that the order in this
case was issued by a district court sitting in bankruptcy. Our
more flexible standard for interlocutory appeals in the bank-
ruptcy context applies only to appeals from orders issued by
a bankruptcy appellate panel or by a district court hearing an
appeal from a bankruptcy court. See Cannon v. Haw. Corp.
(In re Haw. Corp.), 796 F.2d 1139, 1141 (9th Cir. 1986); see,
e.g., Congrejo Invs., LLC v. Mann (In re Bender), 586 F.3d
1159, 1163 (9th Cir. 2009). We have made this distinction
because our jurisdiction over these two types of appeals arises
from different statutes. We have jurisdiction to hear appeals
from district courts sitting in bankruptcy under § 1291, but
have jurisdiction to hear appeals from district courts review-
ing bankruptcy court decisions under 28 U.S.C. § 158(d)(1),3
as well as § 1291. See Conn. Nat’l Bank v. Germain, 503 U.S.
249, 253 (1992). While § 1291 gives us jurisdiction only over
“final decisions,” the scope of § 158(d) is broader: it gives
appellate courts the authority to hear appeals from “final deci-
sions, judgments, orders, and decrees” entered by district
3
28 U.S.C. § 158(d)(1) provides: “The courts of appeals shall have juris-
diction of appeals from all final decisions, judgments, orders, and decrees
entered under subsections (a) and (b) of this section.” Subsection (a) gives
district courts jurisdiction to hear appeals from rulings by the bankruptcy
court, and subsection (b) gives a bankruptcy appellate panel jurisdiction
to hear such appeals. § 158(a), (b).
2558 KLESTADT & WINTERS v. CANGELOSI
courts. We have interpreted this jurisdictional grant to give us
flexibility in asserting jurisdiction over interlocutory orders,
because “certain proceedings in a bankruptcy case are so dis-
tinct and conclusive either to the rights of individual parties
or the ultimate outcome of the case” that their resolution
should be immediately appealable, even if such resolution
does not end the entire litigation on the merits. Mason v.
Integrity Ins. Co. (In re Mason), 709 F.2d 1313, 1316-17 (9th
Cir. 1983).4 We recognized that because § 158 is an “appellate
jurisdictional provision[ ] specifically designed for bank-
ruptcy appeals,” a flexible definition of finality in that context
is in accord with Congress’s intent to ensure prompt resolu-
tion of matters involving estate property. In re Haw. Corp.,
796 F.2d at 1142, n.1.5
[3] We have made clear, however, that these flexible juris-
dictional principles “do not apply to [§ 1291] appeals from
district judges sitting in bankruptcy.” In re Haw. Corp., 796
F.2d at 1141 (emphasis added). Hawaii Corp. considered the
appealability of an order, issued by a district court sitting in
bankruptcy, requiring the debtor’s director to make an imme-
diate transfer of certain stock to the bankruptcy trustee. Id. at
1140. Although the parties agreed that we had jurisdiction
under the flexible finality rules enunciated in Mason, we dis-
4
In re Mason actually interpreted 28 U.S.C. § 1293 (repealed in 1984),
the precursor to § 158. Id. at 1315. However, we have held that decisions
regarding finality under former § 1293 are applicable to cases arising
under § 158. Allen v. Old Nat’l Bank of Wash. (In re Allen), 896 F.2d 416,
418 n.3 (9th Cir. 1990) (per curiam). Thus, for ease of reference, we use
§ 158 in the opinion to refer to both § 158 and its repealed precursor,
§ 1293.
5
Under this flexible approach to finality, we may deem a bankruptcy
court order to be final and appealable if it (1) finally determines the dis-
crete issue to which it is addressed and (2) resolves and seriously affects
substantive rights, such that the losing party would suffer irreparable harm
if the appeal could only be brought at the end of the entire bankruptcy
case. Alexander v. Compton (In re Bonham), 229 F.3d 750, 761 (9th Cir.
2000); see In re Mason, 709 F.2d at 1316-18.
KLESTADT & WINTERS v. CANGELOSI 2559
agreed. Id. at 1141. We held that Mason’s determination that
Congress intended § 158 to give appellate courts more flexi-
bility in asserting jurisdiction did not apply to § 1291, because
there was no evidence that Congress retroactively intended to
enlarge our jurisdiction under that statute with the passing of
§ 158. Id. at 1142 n.1. Accordingly, we rejected reliance on
flexible finality when determining our jurisdiction to hear
appeals from district courts sitting in bankruptcy, holding that
these appeals, arising exclusively under § 1291, would be
governed by the finality rule applicable to all civil appeals. Id.
at 1141-42.
We disagree with the concurrence’s suggestion that, not-
withstanding § 1291 and Cohen, we should “simply treat
jurisdiction of bankruptcy appeals under § 1291 in the same
way that we treat bankruptcy appeals under § 158(d)(1).” Gra-
ber, J. concurrence at 2575. First, as the concurrence itself
acknowledges, we are bound by our decision in Hawaii Corp.,
and as a three-judge panel, we cannot overrule it. Hart v.
Massanari, 266 F.3d 1155, 1171 (9th Cir. 2001) (“Once a
panel resolves an issue in a precedential opinion, the matter
is deemed resolved, unless overruled by the court itself sitting
en banc, or by the Supreme Court.”).
[4] But even if Hawaii Corp. were erased, we would
remain bound by Supreme Court decisions interpreting the
scope of § 1291’s jurisdictional grant, because our power to
hear appeals from district courts sitting in bankruptcy arises
solely from that provision. We cannot expand our jurisdiction
under § 1291 to match what we have under § 158(d), even
when it arguably makes sense from a policy perspective. We
have previously recognized this limitation. In SEC v. Capital
Consultants LLC, the appellants argued that we should apply
flexible finality principles to review interlocutory appeals
arising in a receivership context because such cases raise the
same policy concerns as bankruptcy appeals. 453 F.3d 1166,
1170 & n.4 (9th Cir. 2006) (per curiam). We held that we
lacked the authority to do so because “Title 28 U.S.C. § 158
2560 KLESTADT & WINTERS v. CANGELOSI
governs bankruptcy appeals . . . and provides the more ‘flexi-
ble’ approach to which appellants refer. Title 28 U.S.C.
§ 1291 governs here.” Id. at 1170-71 n.4. Because § 1291 also
governs appeals from orders issued by a district court sitting
in bankruptcy, we are likewise precluded from applying the
flexible approach allowed by § 158(d), regardless of the pur-
ported policy benefits of this approach.6
The Supreme Court has acknowledged that the strict
requirement of finality under § 1291 may be harsh in some
cases: “Many interlocutory decisions of a trial court may be
of grave importance to a litigant, yet are not amenable to
appeal at the time entered, and some are never satisfactorily
reviewable.” Carroll v. United States, 354 U.S. 394, 406
(1957). But Congress has not left parties without recourse in
these situations. District courts may certify an interlocutory
order for appeal, see 28 U.S.C. § 1292(b), or may enter final
judgment “as to one or more, but fewer than all, claims or par-
ties,” Fed. R. Civ. P. 54(b). Thus in Capital Consultants, dis-
cussed above, we declined to apply flexible finality principles
to evaluate an interlocutory order but nevertheless asserted
jurisdiction over claims by the receivership claimants who
had sought and received Rule 54(b) certification from the dis-
trict court. 453 F.3d at 1170.
Relying on Van Cauwenberghe v. Biard, 486 U.S. 517
(1988), the concurrence argues that because a bankruptcy case
is a bankruptcy case, whether arising under § 1291 or
§ 158(d), we have the authority to apply “a special rule of
finality for a category of bankruptcy cases.” Graber, J., con-
currence at 2570. This misinterprets Supreme Court prece-
6
While commentators and other circuits have extolled the benefits of
applying “liberalized rules of finality” under § 158(d) to cases arising
under § 1291, see Graber, J., concurrence at 2571-73, they provide little
explanation of the legal basis for adopting those rules. See, e.g., A.H. Rob-
ins Co. v. Piccinin, 788 F.2d 994, 1009 (4th Cir. 1986) (declining to
explain how the collateral order at issue met the Cohen test, because it
“prefer[red]” to apply flexible finality principles).
KLESTADT & WINTERS v. CANGELOSI 2561
dent, which holds that a “category” is a type of judicial order,
not a substantive area of law. In Van Cauwenberghe, the
Court held that an order denying a motion to dismiss on the
ground of forum non conveniens was not immediately appeal-
able under Cohen, because in general “the question of the
convenience of the forum is not completely separate from the
merits of the action.” 486 U.S. at 527 (quoting Coopers &
Lybrand, 437 U.S. at 468). The Court acknowledged that this
reasoning might not be correct in every case: sometimes, the
forum non conveniens determination is separate from the mer-
its and in those cases “an immediate appeal might result in
substantial savings of time and expense for both the litigants
and the courts.” Id. at 529. Nevertheless, the Court rejected a
case-by-case appealability determination, stating that “[i]n
fashioning a rule of appealability under § 1291,” courts must
“look to categories of cases, not to particular injustices.” Id.;
see also Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 439
(1985). By holding that determinations of forum non conve-
niens are not immediately appealable regardless of the legal
context or facts of a particular case, the Supreme Court made
clear that a determination of appealability applies to claims
involving the same type of orders, not to claims arising in the
same area of substantive law. See, e.g., Mohawk Indus., Inc.
v. Carpenter, 130 S. Ct. 599, 605-06 (2009) (holding that all
disclosure orders adverse to the attorney-client privilege are
not immediately appealable); Richardson-Merrell, 472 U.S. at
439 (holding the same for orders disqualifying counsel).
Under the concurrence’s interpretation of Van Cauwenber-
ghe, by contrast, different jurisdictional rules would apply to
different substantive areas of law. If a court can adopt “a spe-
cial rule of finality for a category of bankruptcy cases,” Gra-
ber, J., concurrence at 2570, then it may also adopt special
rules of finality for the category of antitrust cases or the cate-
gory of securities cases. This means, for example, that a
forum non conveniens determination might be immediately
appealable in an antitrust case, but not in a securities case. No
Supreme Court decision supports this approach.
2562 KLESTADT & WINTERS v. CANGELOSI
III
Because our jurisdiction in this case does not arise under
§ 158(d)(1), the test for flexible finality set forth in Mason is
inapplicable.7 Therefore, we must consider whether the dis-
trict court’s sanctions order, issued under both Rule 9011 and
the court’s inherent power, meets Cohen’s three-prong test.
A
The Supreme Court has given us guidance on how we
should apply Cohen to determine the immediate appealability
of a sanctions order. See Cunningham v. Hamilton County,
Ohio, 527 U.S. 198 (1999). In Cunningham, a magistrate
judge determined that an attorney had flouted discovery
orders by, among other things, failing to produce required
documents and providing insufficient responses to interroga-
tories. Id. at 200-01. Relying on Federal Rule of Civil Proce-
dure 37(a), which allows a court to sanction a party or
attorney that fails to cooperate in discovery, the magistrate
judge ordered the attorney to pay the relevant attorneys’ fees
and costs of the opposing party. Id. at 201. The district court
affirmed the order and the attorney immediately appealed. Id.
at 201-02. The Sixth Circuit dismissed the appeal for lack of
jurisdiction. Id. at 202.
[5] The Supreme Court affirmed. Id. at 203. The Court first
held that a sanction order “neither ended the litigation nor left
the court only to execute its judgment.” Id. at 204. Turning to
Cohen’s three-prong test, the Court held that the discovery
sanction did not fall into the “small category of orders” that
are immediately appealable because, among other reasons,
appellate review of a discovery sanction generally cannot
remain completely separate from the merits of the underlying
7
Our analysis of the finality of the sanctions order is limited to the stan-
dards that apply under § 1291; it should not be read to foreclose a different
outcome to finality under § 158(d)(1).
KLESTADT & WINTERS v. CANGELOSI 2563
action. Id. at 205. The Court reasoned that “[a]n evaluation of
the appropriateness of sanctions may require the reviewing
court to inquire into the importance of the information sought
or the adequacy or truthfulness of a response.” Id. This sort
of inquiry, the Court held, “would differ only marginally from
an inquiry into the merits and counsels against application of
the collateral order doctrine.” Id. at 206. While acknowledg-
ing that some discovery sanctions might not be “inextricably
intertwined with the merits” of a case, the Court rejected “a
case-by-case approach to deciding whether an order is suffi-
ciently collateral.” Id.
Our cases have recognized that the logic of Cunningham
applies equally to other types of sanctions. In Stanley v.
Woodford, a district court sanctioned an attorney for willfully
disobeying a court order prohibiting the attorney from making
further appearances in a certain case. 449 F.3d 1060, 1062
(9th Cir. 2006). We applied Cunningham to hold that the
sanctions order was not a collateral order. Id. at 1064-65.
Although the district court in Stanley issued the sanctions
order under its inherent powers and 28 U.S.C. § 1927 (allow-
ing sanctions for vexatious litigation tactics), we held that
“the policies undergirding Rule 37(a) sanctions are not rele-
vantly different from those justifying sanctions under § 1927
or a court’s inherent powers,” and that Cunningham should be
construed as “applying more broadly than to Rule 37(a) sanc-
tions alone.” Id. at 1064. In reaching this conclusion, we
relied on other cases, both in and out of our circuit, that did
not “distinguish between types of sanctions” when applying
Cunningham to bar immediate review of their respective sanc-
tions orders. Id. at 1065; see, e.g., Cato v. Fresno City, 220
F.3d 1073, 1074 (9th Cir. 2000) (per curiam) (applying Cun-
ningham to bar immediate review of sanctions imposed under
Federal Rule of Civil Procedure 16(f), which authorizes a
court to impose sanctions for noncompliance with scheduling
or pretrial conference orders); Williams v. Midwest Employers
Cas. Co., 243 F.3d 208, 208-09 (5th Cir. 2001) (holding the
same for a sanctions order under Federal Rule of Civil Proce-
2564 KLESTADT & WINTERS v. CANGELOSI
dure 11).8 Similarly, in Markus v. Gschwend (In re Markus),
we relied on Cunningham to hold that a bankruptcy court’s
Rule 9011 sanctions order issued against an attorney who
filed a frivolous motion was not a collateral order. 313 F.3d
1146, 1151 (9th Cir. 2002).
B
[6] Our precedents applying Cunningham to various sanc-
tions orders effectively decide this case.9 We have already
decided that the reasoning in Cunningham precludes us from
hearing immediate appeals of sanctions orders under a court’s
inherent powers, see Stanley, 449 F.3d at 1065, or under Rule
9011, see Markus, 313 F.3d at 1151. Although neither Stanley
(which did not arise in a bankruptcy context) nor Markus
(which considered our jurisdiction under § 158, rather than
§ 1291) is identical to the case before us, the distinctions are
not material. The inherent authority of a district court to
impose sanctions does not change when it is sitting in bank-
ruptcy, given that a court draws its inherent power by nature
of its status as a court of justice, rather than from the type of
case it is hearing. See Chambers v. NASCO, Inc., 501 U.S. 32,
43 (1991); Caldwell v. Unified Capital Corp. (In re Rainbow
Magazine, Inc.), 77 F.3d 278, 284 (9th Cir. 1996). Similarly,
a sanctions order under Rule 9011 advances the same policy
whether it is issued by a bankruptcy court as in Markus or, as
8
We did not have occasion to apply Cunningham to Rule 11 sanctions
because we had determined well before Cunningham was decided that
such sanctions were not collateral orders. See Kordich v. Marine Clerks
Ass’n, 715 F.2d 1392, 1393 (9th Cir. 1983) (per curiam).
9
The concurrence argues that we should not apply Cunningham in the
context of a district court sitting in bankruptcy, because Cunningham was
a civil case. Graber, J., concurrence at 2576. We disagree. Cunningham is
applicable because it determines whether a category of orders similar to
those at issue here is subject to interlocutory appeal under Cohen. Markus
reached the same conclusion: it applied Cunningham to a district court’s
sanctions order in a bankruptcy case arising under § 158(d) and concluded
that the order was not immediately appealable. Markus, 313 F.3d at 1115.
KLESTADT & WINTERS v. CANGELOSI 2565
here, by a district court sitting in bankruptcy. See Cooter &
Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990) (identify-
ing the central policy goal of Rule 11 as “deter[ring] baseless
filings”). Therefore, the logic of Stanley and Markus is
equally applicable here.10
Moreover, the reasoning in Cunningham, that discovery
sanctions are not completely separate from the merits of the
underlying action, applies to this case as well.11 As noted
above, the district court imposed the order on the Silar Parties
on the ground that Debtors’ bankruptcy petition was frivolous
and filed for an improper purpose. But the parties vigorously
dispute this issue. First, the Silar Parties allege that the filing
was not frivolous because Asset Resolution was not in fact an
empty shell company. Rather, it could be properly reorga-
nized because it owned several assets, including fractional
10
The Silar Parties, Counsel, and the concurrence argue that Markus is
distinguishable because the sanctions order in Markus was issued in an
adversary proceeding, whereas the sanctions order here was not issued in
such a proceeding, and therefore is deemed to be a “contested matter.”
Graber, J., concurrence at 2576. Although this is indeed a distinction
between this case and Markus, it does not affect the determination that the
sanctions order here is not an appealable interlocutory order under the
tests set forth in Cohen and Cunningham. Cunningham’s determination
that discovery sanctions are not completely separate from the merits of the
underlying action is applicable regardless whether the proceeding in a spe-
cific case is an “adversary proceeding” (i.e., included in the list of adver-
sary proceedings set forth in Federal Rule of Bankruptcy Procedure 7001)
or a contested matter (i.e., not set forth in that list).
11
The concurrence gets it backward in stating that our reliance on Cun-
ningham is “unnecessary,” Graber, J., concurrence at 2576, because the
sanctions order here is not separable from the merits. To the contrary, we
conclude that the sanctions order here is not separable from the merits
because Cunningham so held. See Cunningham, 527 U.S. at 205 (holding
that “appellate review of a sanctions order” cannot “remain completely
separate from the merits.”). But for Cunningham, the status of sanctions
orders under this Cohen prong would be much murkier. See, e.g., River-
head Sav. Bank v. Nat’l Mortg. Equity Corp., 893 F.2d 1109, 1114 (9th
Cir. 1990) (holding that a sanctions order was “separate from the merits
of the case”).
2566 KLESTADT & WINTERS v. CANGELOSI
real property interests in many of the properties that were sub-
ject to the loan servicing agreements, claims for servicing
fees, and third-party tort claims. Second, the Silar Parties and
Counsel argue that the bankruptcy filing was proper because
bankruptcy’s automatic stay would prevent harmful tax fore-
closures on some of these serviced properties. Third, they
argue that the bankruptcy rules provided procedural advan-
tages necessary for achieving proper resolution of the ongoing
contract litigation between Silar Advisors, Asset Resolution,
and the lenders. Finally, they argue that filing for bankruptcy
in New York was not an attempt to evade the Nevada District
Court’s jurisdiction because Nevada was an improper venue
at the time of its filing.
While the lenders disagree on all these issues, we cannot
resolve these questions without carefully inquiring into all
aspects of the Silar Parties’ financial and legal position lead-
ing up to the bankruptcy filing, as well as assessing the atten-
dant benefits of filing for bankruptcy given those positions.
Like the evaluation of discovery sanctions in Cunningham,
such appellate review “would differ only marginally from an
inquiry into the merits” of the bankruptcy proceeding and thus
“counsels against application of the collateral order doctrine.”
527 U.S. at 206.
[7] Because the sanctions order here is not completely sep-
arate from the merits of the underlying bankruptcy case, it
does not meet the Cohen test. See McElmurry, 495 F.3d at
1140. We therefore conclude that the sanctions order issued
by the district court sitting in bankruptcy, whether supported
by the district court’s inherent powers or Rule 9011, was not
an appealable collateral order.12
12
The Silar Parties’, Counsel’s, and the concurrence’s reliance on Stasz
v. Gonzalez (In re Stasz), 387 B.R. 271 (B.A.P. 9th Cir. 2008), is mis-
placed. In holding that a civil contempt order is immediately appealable,
Stasz determined it was not bound by Cunningham because in that case the
Court considered discovery sanctions, not civil contempt orders. Id. at
KLESTADT & WINTERS v. CANGELOSI 2567
IV
[8] We recognize “the hardship that a sanctions order may
sometimes impose on an attorney.” Cunningham, 527 U.S. at
209-10. Nevertheless, we are bound by the Court’s conclusion
that an “expansive interpretation of § 1291’s ‘final decision’
requirement” is not the preferred solution for alleviating such
burdens. Id. Therefore, we hold that the district court’s sanc-
tions order was not an appealable final order.13 Because appel-
lants are unable to satisfy the threshold requirement of
appellate jurisdiction, the appeal is DISMISSED.
QUIST, Senior District Judge, concurring:
All judges on the panel, including the undersigned, agree
that Ninth Circuit precedent, particularly Cannon v. Hawaii
Corp. (In re Hawaii Corp.), 796 F.2d 1139 (9th Cir. 1986),
requires this Court to dismiss this appeal because appellants
275. Indeed, Cunningham expressly distinguished between these catego-
ries of orders based on the general characteristics of each category. See
Cunningham, 527 U.S. at 207-08 (noting that “[c]ivil contempt is designed
to force the contemnor to comply with an order of the court,” while a dis-
covery sanction “lacks any prospective effect and is not designed to com-
pel compliance”) (internal quotation marks omitted). Thus, Cunningham
answers the concurrence’s question: “civil contempt is one category, and
other sanctions form another category,” regardless of the “procedural con-
text” in which these respective orders arise. Graber, J., concurrence at
2571 & n.2 (emphasis added). Unlike the facts in Stasz, Cunningham’s
analysis is applicable here because we are faced with a sanctions order,
not an order for civil contempt. See Markus, 313 F.3d at 1151.
13
We reject the Silar Parties’ and Counsel’s alternative request that we
treat their notices of appeal as petitions for mandamus. Mandamus is not
appropriate in this case because the Silar Parties and Counsel have not
shown that the district court clearly erred in issuing the sanctions order.
“This factor alone is sufficient to deny mandamus.” Z-Seven Fund, Inc. v.
Motorcar Parts & Accessories, 231 F.3d 1215, 1219-20 (9th Cir. 2000).
2568 KLESTADT & WINTERS v. CANGELOSI
“are unable to satisfy the threshold requirement of appellate
jurisdiction.” In my judgment, once appellants fail to satisfy
this threshold issue, the case is concluded—subject, of course,
to whether the Ninth Circuit revisits the continuing viability
of In re Hawaii Corp. As to whether the rule of In re Hawaii
Corp. should be revisited or changed is not for me to say. If
the rule of In re Hawaii Corp. is changed en banc, the issue
of appellate jurisdiction can be revisited under the facts of this
particular case, which are accurately set forth in Part I of
Judge Ikuta’s Opinion.
GRABER, Circuit Judge, concurring in part and in the judg-
ment, and dissenting in part:
I concur in the majority’s holding that our jurisdiction
arises solely from 28 U.S.C. § 1291, not 28 U.S.C.
§ 158(d)(1). As a result, I also must agree that we cannot
examine the finality of the sanctions order under the flexible
approach that typically applies to bankruptcy appeals. Cannon
v. Haw. Corp. (In re Haw. Corp.), 796 F.2d 1139, 1141-42
(9th Cir. 1986). But I write separately because I disagree with
the rule announced in Hawaii Corp. and because, although I
agree with the majority’s finality conclusion under § 1291, I
disagree with the analysis in Parts III.A-B.
A.
Six years after we decided Hawaii Corp., we reexamined
and reaffirmed its holding that the flexible finality approach
used in bankruptcy appeals arises under § 158(d)(1), making
it unavailable for an appeal that arises solely under § 1291.
Vylene Enters., Inc. v. Naugles, Inc. (In re Vylene Enters.,
Inc.), 968 F.2d 887, 893 (9th Cir. 1992). In Vylene Enter-
prises, we recognized that our rule was inconsistent both with
a leading treatise and with the implications of a then-recent
Supreme Court decision. Id. at 892 (noting disagreement
KLESTADT & WINTERS v. CANGELOSI 2569
between Ninth Circuit precedent and Conn. Nat’l Bank v.
Germain, 503 U.S. 249, 252-53 (1992), and 16 Charles A.
Wright et al., Federal Practice and Procedure § 3926, at 119
(Supp. 1991)1). As we said in Vylene Enterprises, “Hawaii
Corp. unequivocally requires us to apply different finality
standards depending on which statute affords jurisdiction.” Id.
at 893.
In my view, Hawaii Corp. was wrongly decided.
1.
Hawaii Corp. is unconvincing on its own terms. For
instance, the panel worried that the inquiry as to whether an
appeal is or is not in a bankruptcy case could be “difficult”
and create a practical “problem.” 796 F.2d at 1142 n.1. Not
so. A bankruptcy case is commenced by filing a bankruptcy
petition. 11 U.S.C. §§ 301-303. It does not become something
other than a bankruptcy case even if ordinary contract claims
(for example) must be resolved in the course of the proceed-
ing. A civil action (or adversary proceeding) is commenced
by filing a complaint. Fed. R. Civ. P. 3; Fed. R. Bankr. P.
7003. It does not become something other than a civil action
even if (for example) a party files for bankruptcy and the case
proceeds, with or without substitution of the trustee, upon lift-
ing the automatic stay. The inquiry is straightforward and
uncomplicated, as all our sister circuits to have confronted the
issue have recognized.
1
The current version of the treatise states:
Only the Ninth Circuit has refused to apply expanded bank-
ruptcy concepts of finality when an order is entered by the district
court acting in bankruptcy. The better rule, followed by other cir-
cuits, is that in bankruptcy proceedings § 1291 finality should be
treated the same way as § 158(d) finality.
16 Charles A. Wright et al., Federal Practice and Procedure § 3926.2, at
115 n.26 (2d ed. Supp. 2011).
2570 KLESTADT & WINTERS v. CANGELOSI
The other rationale underlying the Hawaii Corp. rule was
the concern that a contrary holding would amount to treating
the adoption of the Bankruptcy Code as “an implied, retroac-
tive amendment of 28 U.S.C. § 1291 enlarging our jurisdic-
tion beyond the bounds of established finality principles.” 796
F.2d at 1142 n.1. But “[i]n fashioning a rule of appealability
under § 1291, . . . we look to categories of cases.” Van Cau-
wenberghe v. Biard, 486 U.S. 517, 529 (1988). Thus, it is
proper and prudent to adopt a special rule of finality for a cat-
egory of bankruptcy cases. The Bankruptcy Code and its asso-
ciated framework of appellate jurisdiction surely counsel in
favor of that approach.
Contrary to the majority’s assertion, maj. op. at 2560-61,
my view (and the view of every circuit except ours) is consis-
tent with Van Cauwenberghe. There, in considering the final-
ity of an order denying a motion to dismiss on grounds of
forum non conveniens, the Supreme Court wrote:
It is thus undoubtedly true that in certain cases, the
forum non conveniens determination will not require
significant inquiry into the facts and legal issues
presented by a case, and an immediate appeal might
result in substantial savings of time and expense for
both the litigants and the courts. In fashioning a rule
of appealability under § 1291, however, we look to
categories of cases, not to particular injustices. See
Carroll v. United States, 354 U.S. 394, 405 (1957)
(“Appeal rights cannot depend on the facts of a par-
ticular case”)[.]
Van Cauwenberghe, 486 U.S. at 529 (emphases added).
To be sure, “categories of cases” exist in the eye of the
beholder. The Supreme Court’s discussion in Van Cauwen-
berghe does not explain exactly how to decide what consti-
tutes a “category.” In my view, though, the best reading of
that passage is that the “finality” determination stands inde-
KLESTADT & WINTERS v. CANGELOSI 2571
pendent of the facts and equities of a particular case, but still
allows the court to categorize an order in light of its proce-
dural context. Under that reading, the category of sanctions
orders in civil cases does not overlap with the category of
sanctions orders in main bankruptcy cases.2
2.
I am not alone in my view of Hawaii Corp. In the two-and-
a-half decades since we issued our opinion, no other circuit
has agreed with us. The Third Circuit, for example, has
rejected our reasoning and concluded that § 1291 jurisdiction
“mirrors” jurisdiction under § 158(d). Metro Transp. Co. v. N.
Star Reinsurance Co., 912 F.2d 672, 676 (3d Cir. 1990) (cit-
ing United States v. Nicolet, Inc., 857 F.2d 202, 205 (3d Cir.
1988)). In Nicolet, the Third Circuit observed that, “[i]n fash-
ioning rules of appealability under section 1291, the courts’
focus should lie on ‘categories of cases’ rather than mere case
labels.” 857 F.2d at 205 (quoting Van Cauwenberghe, 486
U.S. at 529).
The Fifth Circuit has similarly rejected the Hawaii Corp.
approach:
[B]ecause of considerations unique to bankruptcy
appeals—such as the protracted nature of bankruptcy
proceedings and the large number of parties inter-
ested in them—courts have applied liberalized rules
of finality for bankruptcy appeals. The appellees, cit-
ing Matter of Hawaii Corp., argue that these liberal-
ized rules apply only to appeals from a district
2
The majority appears to lump together all sanctions orders, no matter
the type of sanction, the context, or the nature of the case. Maj. op. at 2564
n.9, 19 n.10. On the other hand, the majority also distinguishes between
civil contempt and other kinds of sanctions. Maj. op. at 2566-67 n.12.
Does this mean that civil contempt is one category, and other sanctions
form another category? I think that Van Cauwenberghe plainly permits the
latter, just as it permits the categorization that I have suggested.
2572 KLESTADT & WINTERS v. CANGELOSI
court’s review of a bankruptcy court’s decision pur-
suant to 28 U.S.C. § 158(d) (“Section 158(d)”), not
to appeals from a district court sitting in bankruptcy
pursuant to Section 1291. Other circuits, however,
have refused to follow Matter of Hawaii Corp. . . .
We too see no reason to apply different rules of
finality for Section 1291 appeals, and will apply the
same rules that we apply to Section 158(d) appeals.
Cajun Electric Power Coop., Inc. v. Cent. La. Electric Co. (In
re Cajun Electric Power Coop., Inc.), 69 F.3d 746, 747-48
(5th Cir. 1995), as amended, 74 F.3d 599 (9th Cir. 1996) (cit-
ing Tringali v. Hathaway Mach. Co., 796 F.2d 553, 558 (1st
Cir. 1986); A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009
(4th Cir. 1986); In re UNR Indus., Inc., 725 F.2d 1111, 1115
(7th Cir. 1984)).
The Second Circuit has reached a similar conclusion:
Our cases appear not to have addressed the question
of whether the standards for determining finality
under Section 158(d) apply to bankruptcy appeals
under Section 1291 or whether resort must be had to
the principles established in Cohen v. Beneficial
Loan Corp., 337 U.S. 541 (1949). We perceive noth-
ing to be gained by creating a second set of standards
—which, when painstakingly developed, might not
differ significantly from those already in place under
Section 158(d)—for reviewing identical cases. We
therefore follow the Third Circuit in holding that
decisions regarding finality under Section 158(d)
apply under Section 1291.
Sonnax Indus., Inc. v. Tri Component Products Corp. (In re
Sonnax Indus., Inc.), 907 F.2d 1280, 1283 (2d Cir. 1990) (cit-
ing Nicolet, 857 F.2d at 205).
Finally, the First Circuit has “held that interpretation of the
word ‘final’ in appeal of bankruptcy proceedings should not
KLESTADT & WINTERS v. CANGELOSI 2573
depend on whether jurisdiction is invoked under 28 U.S.C.
§ 1291 or § 1293(b) (currently 28 U.S.C. § 158(d)).” In re
Spillane, 884 F.2d 642, 644 n.1 (1st Cir. 1989).
In view of this substantial contrary authority, commentators
agree that the Ninth Circuit’s unique position is imprudent.
The courts generally agree that in this context the
term “final” in section 1291 should be construed just
as it is in section 158, but the Ninth Circuit holds to
the contrary.
The majority view is more persuasive. As
reflected in the case law developed from decisions
such as Cohen . . . , the courts have found section
1291 adaptable to the concerns presented by varying
litigative contexts. There is no reason not to expect
similar responsiveness in bankruptcy. More funda-
mentally, . . . any defensible modification of general
finality principles for use in bankruptcy derives from
the number and interrelationships of the disparate
disputes each case may encompass. Those complexi-
ties obtain regardless of the forum in which the liti-
gation begins. Adhering to a single notion of finality
at least avoids another layer of complexity.
John P. Hennigan, Jr., Toward Regularizing Appealability in
Bankruptcy, 12 Bankr. Dev. J. 583, 598 (1996) (footnotes
omitted); see also Sarah E. Vickers, Comment, Interlocutory
Appeals in Bankruptcy Cases: The Conflict Between Judicial
Code Sections 158 and 1292, 8 Bankr. Dev. J. 519, 531
(1991) (“No policy goal justifies penalizing litigants for
bringing their cases initially before the district court. . . . In
addition, the Supreme Court’s guidance in focusing on ‘cate-
gories of cases’ should outweigh focusing on where the case
originated. Finally, it should be noted that the Ninth Circuit
is apparently alone in its view on this subject.”).
2574 KLESTADT & WINTERS v. CANGELOSI
3.
Indeed, our analysis of finality under the usual § 1291 stan-
dards, as required by Hawaii Corp., amply demonstrates the
flawed nature of that rule. In resolving this appeal, we ask
whether the sanctions order here falls under the collateral
order exception identified in Cohen, 337 U.S. at 546. “The
requirements for collateral order appeal have been distilled
down to three conditions: that an order [1] conclusively deter-
mine the disputed question, [2] resolve an important issue
completely separate from the merits of the action, and [3] be
effectively unreviewable on appeal from a final judgment.”
Will v. Hallock, 546 U.S. 345, 349 (2006) (internal quotation
marks omitted) (alterations in original) (emphasis added).
The third prong of this test shows that the collateral order
doctrine is ill-suited to application in the bankruptcy context.
It is not clear to me what, exactly, constitutes a “final judg-
ment” in a bankruptcy case: “Unlike an adversary proceeding
or a civil action outside bankruptcy, the culmination of [a]
bankruptcy case does not result in a final judgment.” Stasz v.
Gonzalez (In re Stasz), 387 B.R. 271, 276 (B.A.P. 9th Cir.
2008).
In the absence of a final judgment, perhaps we must look
for something procedurally analogous. One close match
would be the final order approving distribution of funds under
chapter 7 of the Bankruptcy Code. Once that order issues,
though, the heart of a bankruptcy case—the debtor’s assets—
will have disappeared, pro-rata, into a multitude of hands, pre-
cluding effective review of most, if not all, questions involv-
ing those assets. Cf. Riverhead Sav. Bank v. Nat’l Mortg.
Equity Corp., 893 F.2d 1109, 1114 (9th Cir. 1990) (conclud-
ing that, where an order required immediate payment of
money to a likely insolvent entity, review of that order “effec-
tively would be denied if return of the money awarded were
impossible”). Thus, the collateral order doctrine is simply not
helpful for determining finality in the bankruptcy context; the
KLESTADT & WINTERS v. CANGELOSI 2575
flexible approach developed under § 158(d)(1) seems far
more appropriate.
Sufficient finality might also arise from other types of
orders. Certainly, dismissal of a bankruptcy petition is final.
But a meritorious motion to dismiss a chapter 11 petition
may, at the court’s discretion, be resolved by conversion to
chapter 7. 11 U.S.C. § 1112(b). When a party succeeds on a
motion to dismiss, but the court converts the case, is that
result any less final than if the court had dismissed the peti-
tion? Formally, yes. Functionally, it is not so clear. Although
the bankruptcy case would still be pending and open, control
of the debtor would have changed hands, from management
of the debtor-in-possession to a chapter 7 trustee. For some
types of decisions, that change of control might impart suffi-
cient finality; for others, perhaps not. I have little doubt that
identifying a final judgment analogue would be just as diffi-
cult for cases under other chapters of the Bankruptcy Code.
In view of those difficulties, a more flexible approach seems
prudent in all bankruptcy appeals, regardless of where they
originate.
At the very least, the lack of a clear “final judgment” in a
main bankruptcy case means we will need to decide precisely
what “categories” of bankruptcy orders are sufficiently final.
This inquiry might well lead to the development of rules that
parallel the flexible approach already developed under
§ 158(d)(1). The better solution, in my view, is to simply treat
jurisdiction of bankruptcy appeals under § 1291 in the same
way that we treat bankruptcy appeals under § 158(d)(1).
In short, I see no convincing justification for continuing to
disagree with our sister circuits; we should reevaluate Hawaii
Corp.’s lonely rule en banc.
B.
As a final matter, in applying the three-pronged collateral
order test to the sanctions order in this case, the majority
2576 KLESTADT & WINTERS v. CANGELOSI
relies on Cunningham v. Hamilton County, 527 U.S. 198
(1999). I dissent from that part of the analysis, in Parts III.A-
B, for two reasons.
First, it is unnecessary; as the majority correctly states at
the end of Part III.B, the sanctions order fails to meet the sec-
ond prong of the collateral order test, which requires that the
issue be separable from the merits. That observation alone is
sufficient to decide the issue.
Second, for the reasons identified by this circuit’s Bank-
ruptcy Appellate Panel, I see a material distinction between a
main bankruptcy case, like this one, and the civil cases cited
by the majority. See In re Stasz, 387 B.R. at 274-76. The
majority cites only one bankruptcy case, Markus v. Gschwend
(In re Markus), 313 F.3d 1146 (9th Cir. 2002). That case
involved an adversary proceeding, which is more like a tradi-
tional civil case than it is like a main bankruptcy case. I would
adopt the reasoning from Stasz, including its reasonable dis-
tinctions between this situation and the situation in Markus
and Cunningham. Accordingly, I do not join the majority
opinion where it diverges from Stasz and holds that Cunning-
ham applies to a main bankruptcy case.
C.
For the reasons stated above, I dissent in part, and concur
in part and in the judgment. But I hope that my colleagues
will take this opportunity to reexamine the wisdom of the rule
established in Hawaii Corp.