In this case we review an award of attorneys’ fees that, regardless of our decision, will never be paid. Plaintiffs-Appellants brought this appeal, seeking vacatur of the district court’s imposition of compensatory attorneys’ fees in light of the settlement of their suit against Defendants-Appellees. For the following reasons, we AFFIRM the judgment of the district court with respect to its initial sanctions order but VACATE the attorneys’ fees portion of the district court’s judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
The underlying litigation in this case is one of many cases arising from the Enron collapse and consolidated in the Southern District of Texas. This particular case involved several coordinated/consolidated plaintiffs represented by Fleming & Associates L.L.P. (“the Fleming Plaintiffs”) and their claims against Defendants-Appellees, the former outside directors of Enron (“the Outside Directors”).
During the course of discovery, the Fleming Plaintiffs designated Curtis Verschoor (“Verschoor”) as an expert witness on business and professional ethics, corporate governance, corporate auditing, and public disclosures. Verschoor prepared a 165-page report that the Fleming Plaintiffs timely filed on June 1, 2006, the deadline to file such reports under the district court’s discovery order. The discovery order applicable to the Enron cases required parties to upload expert opinions to a secure FTP site to be used for Enron discovery documents. The order also required parties to post a notice to a separate website, esl3624.com, to inform the other parties of the production of a new document.
On September 5, 2006, the day before Verschoor’s scheduled deposition, the Fleming Plaintiffs uploaded an amended version of his expert report to the Enron discovery website. They did not post notice of the newly uploaded document to the notice website, esl3624.com.
The Outside Directors first became aware of revisions to Verschoor’s report at the beginning of his September 6 deposition. At that time, the Fleming Plaintiffs did not provide a comparison of specific changes made to the report, though they asserted that all changes were non-substantive. In his deposition, Verschoor characterized the changes as typographical and grammatical- — -periods and semicolons out of place — and a few omitted words. He also initially testified that the Fleming Plaintiffs’ counsel did not make any changes to the report, although after further questioning, Verschoor realized that the Fleming Plaintiffs’ counsel had made some revisions to the report’s table of contents. Verschoor’s deposition testimony also suggested that the Fleming Plaintiffs’ counsel knew of errors in the body of the report around the time it was originally filed, June 1, and that Verschoor did not make revisions to the body of the report *636 until approximately ten days prior to his deposition.
The Outside Directors’ counsel halted the deposition and requested an emergency telephone hearing before the district judge overseeing the case, Judge Melinda Harmon. Judge Harmon suggested that the deposition be recessed until she could make further rulings. In the interim, the Outside Directors filed a motion to exclude Verschoor’s testimony.
On September 14, 2006, the district court issued an order sanctioning the Fleming Plaintiffs’ counsel and denying the Outside Directors’ motion to exclude the expert’s testimony. After performing its own line-by-line comparison of the original and revised expert reports, the district court concluded,
Although the table of contents is substantially different, the only differences in the body of the report consist of occasional changes of dates, the dropping of a line from the original report in the amended report, the additions of words and a few punctuation and formatting changes. None of the changes to the body of the original report found in the amended report appear to be material.
The court noted that counsel’s revisions to the report’s table of contents “give[] rise to suspicion that counsel may have had a hand in writing the report,” but the court concluded that any changes to the body of the report were not material and were made by the expert witness himself. The court nevertheless ordered that the Fleming Plaintiffs’ counsel be “sanctioned for changing the expert witness’s report and shall pay to the Former Outside Directors the reasonable attorneys[’] fees incurred by counsel for the Former Outside Directors in bringing the [motion to exclude expert testimony].” The court ordered the Outside Directors to submit a fee affidavit to be used to calculate the sanctions amount.
On September 28, 2006, the Fleming Plaintiffs moved for reconsideration of the sanctions order under Federal Rule of Civil Procedure 59(e). They also objected to the fee affidavit submitted by the Outside Directors. In turn, the Outside Directors opposed the Fleming Plaintiffs’ motion for reconsideration and opposed the objections to the fee affidavit.
In early December 2006, the parties settled their underlying dispute, and on December 13, 2006, the Fleming Plaintiffs moved to dismiss all claims against the Outside Directors. In an unopposed motion, the Fleming Plaintiffs moved that “all parties shall bear their own costs, expenses and attorneys’ fees.” Thereafter, the Outside Directors withdrew their opposition to reconsideration and agreed to withdrawal of the sanctions order.
On February 8, 2007, the district court denied reconsideration of its sanctions order and referred the attorneys’ fee issue to a magistrate judge “for consideration and resolution, including a hearing, should she find one necessary.” On March 6, 2007, although the Outside Directors informed the magistrate judge that they had agreed not to collect sanctions after the settlement, 1 the magistrate judge held a hearing and directed the Fleming Plaintiffs’ counsel to pay $15,214.45 in attorneys’ fees and expenses to the Outside Directors. This appeal followed. We have jurisdiction under 28 U.S.C. § 1291 to hear this appeal.
*637 II. DISCUSSION
The Fleming Plaintiffs raise two arguments in challenging the district court’s sanctions orders. First, they make arguments based on mootness: either the settlement stripped the district court of jurisdiction to impose compensatory sanctions, requiring mandatory vacatur, or the Fleming Plaintiffs should be entitled to equita: ble vacatur of the sanctions because the settlement made any appeal of the sanctions moot. Second, the Fleming Plaintiffs contend that the district court abused its discretion in granting the sanctions order in the first place.
A. Mootness
This court reviews questions of mootness de novo.
Staley v. Harris County,
The Fleming Plaintiffs’ first argument invites us to view the district court’s September 14, 2006 sanctions order as a mere preliminary order that did not become a final appealable order until the magistrate judge determined the sanctions amount on March 6, 2007. Citing
Williams v. Ezell,
Nevertheless, we recognize that a district court always has jurisdiction to impose sanctions designed to enforce its own rules, even after that court no longer has jurisdiction over the substance of a case: “It is well established that a federal court may consider collateral issues after an action is no longer pending. For example, district courts may award costs after an action is dismissed for want of jurisdic
*638
tion.”
Cooter & Gell v. Hartmarx Corp.,
The purpose of sanctions goes beyond reimbursing parties for expenses incurred in responding to unjustified or vexatious claims. Rather, sanctions are designed to punish a party who has already violated the court’s rules. The interest in having rules of procedure obeyed does not disappear merely because an adversary chooses not to collect the sanctions.
Perkins,
Second, the Fleming Plaintiffs contend that if the district court had jurisdiction at the time it issued its final attorneys’ fee award, any appeal of that monetary award would be rendered moot by the parties’ settlement and the Outside Directors’ agreement not to collect it. In that event, we would vacate under equitable principles.
U.S. Bancorp Mortgage Co. v. Bonner Mall P’ship,
*639
Regardless of which approach we take, it is important to recognize that the district court’s action included two components: (1) a finding that the Fleming Plaintiffs’ attorney engaged in sanctionable behavior; and (2) a compensatory award payable to the Outside Directors. Although no Fifth Circuit case gives us direct guidance on this issue, courts in other circuits have recognized that a compensatory sanction — primarily intended to compensate a party for a wrong committed against it by the opposing party — is substantially different from a purely punitive sanction, in which a litigant must pay the court or perform some other penance for misbehavior. For example, the Seventh Circuit drew such a distinction in
Clark Equipment Co. v. Lift Parts Manufacturing Co.,
We agree that a court’s interest in having the rules of procedure obeyed never disappears. But that interest is not sufficient to keep a compensatory award alive for appeal after the parties have settled. A district court may sanction abusive behavior directly by imposing a punitive fine made payable to the court or by imposing non-monetary sanctions. These sanctions cannot be settled by the parties. Alternatively, however, the court may sanction the offending party by forcing him to compensate his opponent for the trouble he has caused. This second enforcement mechanism may be analogized to tort remedies, which also regulate behavior by compensating injured parties. Society at large has an interest in enforcing negligence rules, yet we allow tort plaintiffs to bargain away that interest by settling. So too the beneficiary of a compensatory sanction may bargain away the court’s interest in seeing its rules enforced. And despite the way we have phrased our analogy, a settlement does not mean that a sanction has been rendered ineffective — any more than a guilty plea indicates that the criminal laws are not being enforced.
Id. at 819 (citation omitted) (emphasis added).
The Eleventh Circuit took a similar approach in
Kleiner v. First National Bank of Atlanta,
The stipulation awarding attorneys’ fees by its terms encompasses the district court’s award of fees and costs incident to class notice and the disciplinary proceeding. The parties correctly argue that the settlement has mooted issues of attorneys’ fees, costs, and the legality of the voidable exclusion sanction .... A different result must obtain with respect to the fines and disqualification imposed upon counsel. The $50,000 fine assessed against [counsel] was imposed pursuant to the inherent powers of the district court and is not subject to revocation by the parties.
*640 Id. at 1199-200. Under Kleiner, therefore, a district court order awarding compensatory attorneys’ fees should be vacated as moot after a settlement of the underlying litigation.
We are persuaded by
Clark
and
Kleiner
that we should vacate the monetary portion of the sanctions in this case, regardless of whether the issue became moot before or after the district court’s sanctions order became final. If we interpret the magistrate judge’s March 6, 2007 order as the only final sanctions order at issue, the issue of monetary sanctions was moot at that time, the district court lacked jurisdiction, and we must therefore vacate the judgment.
See Goldin,
Notwithstanding our reversal of the compensatory sanctions, we decline to vacate the district court’s September 14 order entirely. In that order, prior to the parties’ settlement, the district court sanctioned the Fleming Plaintiffs’ lawyer and explained its reasons for doing so. If the September 14 order is seen as a final judgment, it is not subject to mandatory vacatur, which applies only when the court lacked jurisdiction at the time it issued a final order.
See Goldin,
Even if the September 14 order was not a final judgment, equitable vacatur is not appropriate because the order is nevertheless appealable: Any non-monetary portion of the sanctions not rendered moot by settlement is appealable for its residual reputational effects on the attorney.
Walker v. City of Mesquite,
We also are in harmony with the Eighth Circuit’s decision in
Perkins,
which emphasized that parties generally cannot bargain away the court’s right to impose sanctions.
Our holding preserves the right of parties to bargain away sanctions designed to compensate the parties themselves, such as the attorneys’ fee award in this case. On the other hand, we recognize that district courts retain the ability to police their own rules through various punitive sanctions mechanisms, including issuing written opinions that describe attorney misconduct. Such admonitions play an important role in discouraging bad behavior by litigators, and where a district court has reviewed a case of misconduct and issued a well reasoned sanctions order, we should not allow a subsequent settlement to erase that language.
B. Merits
Although we vacate the monetary portion of the sanctions award, we consider whether to vacate the district court’s sanctions order in its entirety because of the reputational effects that order might have on the Fleming Plaintiffs’ counsel.
See Walker,
The district court cited no legal authority for its imposition of sanctions. Thus, the parties are left to argue the appropriateness of sanctions under various possible provisions. Because the timing of the changes to the report was of key concern to the district court, we look to Federal Rule of Civil Procedure 16(f), which permits sanctions “[i]f a party or its attorney ... fails to obey a scheduling or other pretrial order.” Fed.R.Civ.P. 16(f).
The district court’s discovery order compelled the parties to submit expert reports by June 1, 2006. The Fleming Plaintiffs filed Verschoor’s revised expert report in September, without any explanation for the delay. The district court noted that changes to the report’s table of contents were made “shortly before the scheduled deposition ... without prior notice to the defense lawyers,” and that the last minute disclosure “calls into question the motives of counsel for the Fleming plaintiffs.” The district court also emphasized that the late disclosure of these changes forced the Outside Directors to expend additional costs: “Such expense could have been easily avoided, and the ease of avoiding that expense calls into question the motives of *642 counsel for the Fleming plaintiffs in making the changes to the table of contents in the time frame those changes were made, and without prior explanation to defense counsel.” (emphasis added). Thus, we find that the district court did not abuse its discretion under Rule 16. 5
III. CONCLUSION
Finding the issue of monetary sanctions moot, we vacate the portion of the district court’s sanctions order to the extent that it made an award of attorneys’ fees. Nevertheless, we decline to vacate the district court’s sanctions order in its entirety because the court did not abuse its discretion when it issued its original sanctions order. As this inconsequential case has already consumed too many judicial resources, we see no reason to remand to the district court.
VACATED in part and AFFIRMED in part.
Notes
. Counsel for the Outside Directors wrote to the magistrate judge, advising her of the settlement: "Our clients, however, have settled the claims of the Fleming Plaintiffs and— pursuant to that settlement — are precluded from pursuing further the sanctions at issue in Judge Harmon’s ruling.”
. Regardless of whether the district court had jurisdiction over a purportedly moot issue, the Court of Appeals retains jurisdiction to order vacatur of a mooted case.
U.S. Bancorp Mortgage Co. v. Bonner Mall P'ship,
. We observe that the Supreme Court has relaxed the
Munsingwear
rule of "automatic” vacatur in cases that become moot on appeal.
See U.S. Bancorp,
In this case, the district court never had a chance to rule on the merits of the underlying dispute because the parties settled. The court's March 6 sanctions order — assuming the court retained jurisdiction at the time it issued its final monetary award — was a punishment against the Fleming Plaintiffs’ counsel, not a judgment that either of the parties in the case could claim as a victory or a loss. We should not deprive the Fleming Plaintiffs' counsel of the right to equity when the party he represents chose to settle its suit.
See Agee v. Paramount Commc’ns, Inc.,
. We note that this approach differs from the reasoning of other circuits, where courts have declined to take appellate jurisdiction to review a sanctions order merely for its reputa-tional effects.
See Clark,
. Because we conclude that the sanctions were justified under Rule 16, we need not consider the Outside Directors’ alternative arguments that the sanctions were proper under Federal Rule of Civil Procedure 37, 28 U.S.C. § 1927, or the district court’s inherent power.