⏱ 2 min read
The panel said the attorneys hadn’t shown a likely path to overturning Judge Kathleen Williams’s bad-faith finding and flagged unresolved district court motions, leaving sanctions—and a potential case reopening—on the table.
A three-judge panel of the 11th U.S. Circuit Court of Appeals declined to pause sanctions against two attorneys for President Donald Trump over their handling of his $10 billion lawsuit against the Internal Revenue Service, CNBC reported. The stay request failed after the panel said the lawyers had not shown a strong likelihood of success in challenging the sanctions order.
The panel also described the challenge as premature because the district court has not yet ruled on key issues, including a motion by a group of former judges to reopen the case and a question of attorneys’ fees, according to CNBC. Those unresolved matters leave the district court’s role central for now.
U.S. District Judge Kathleen Williams previously found the suit was filed for the improper purpose of lending judicial legitimacy to an out-of-court settlement that had no basis in law or fact. She also determined the parties were not truly adverse because Trump, as head of the executive branch, controlled the IRS, CNBC reported.
Williams referred attorney Alejandro Brito to the Florida Bar for potential discipline and ordered that all pro hac vice applications by attorney Daniel Epstein be denied in the Southern District of Florida for one year. She also directed that a copy of her order be sent to the New York State Bar Association, of which acting Attorney General Todd Blanche is a member, CNBC reported. The appeals panel’s ruling denying a delay was unanimous; Judges Kevin Newsom, Robin Rosenbaum and Adalberto Jordan sat on the panel.
CNBC reported the underlying suit stemmed from Trump’s claim that an IRS contractor leaked his tax records. The settlement that followed briefly led the Justice Department to create a $1.8 billion “lawfare” fund—quickly abandoned amid backlash—and it purported to shield Trump, his family members, the Trump Organization and related entities from potential IRS enforcement tied to federal returns. A spokesman for Trump’s legal team said the IRS allowed a politically motivated leak and that Trump will continue to hold wrongdoers accountable.
The immediate effect of the 11th Circuit’s decision is that the sanctions remain active while the district court decides whether to reopen the case and how to handle fees. Practically, that means a one-year limitation on Epstein appearing in S.D. Fla. cases by special admission and a live bar referral for Brito, with possible professional consequences depending on bar review outcomes.
What to watch next
The pivotal milestones are Judge Williams’s rulings on the motion to reopen and on attorneys’ fees. Any decision to reopen could put the settlement back before the court and clarify the scope of any protections it purported to grant. Separately, outcomes from the Florida Bar’s review and any challenge to the pro hac vice restriction will shape the longer-term status of the sanctions.
This content is for informational purposes only and does not constitute financial advice.
🧠 HafidWatch Take
Should Judge Williams decide to reopen the case, the legal protections from the settlement could be fundamentally undermined, exposing Trump and related parties to renewed IRS enforcement. Such a move would not only challenge the legitimacy of the out-of-court agreement but also set a precedent for how similar settlements might be scrutinized when key facts about adversity between parties are questioned. Meanwhile, the ongoing sanctions and bar referrals maintain immediate pressure on Trump’s attorneys, signaling tangible professional consequences even as the larger legal battle continues.
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