9th Circuit: Poor attorney’s sanctions could be reduced

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A federal court could reduce a $363,000 award of sanctions against an attorney based on his inability to pay, the 9th Circuit has ruled in reversing judgment.

Under 28 U.S.C. §1927, a federal court may impose sanctions when an attorney “multiplies the proceedings in any case unreasonably and vexatiously.”

In this case, the attorney represented a client in a civil rights lawsuit against San Francisco. The district court found that the attorney pursued his client’s claims after it was clear that those claims were frivolous and in bad faith. Accordingly, the district court ordered the attorney to pay the city $363,000 in attorney fees and costs as a sanction under §1927.

The attorney sought to reduce the sanction on the ground that he had no assets and was a sole practitioner who only made $20,000 a year.

The district court concluded that sanctions could not be reduced under §1927 based on the lawyer’s limited resources.

But the 9th Circuit disagreed, holding that “a district court may, in its discretion, reduce the amount of a §1927 sanctions award, and may do so, among other reasons, because of the sanctioned attorney’s inability to pay. …

“We do not suggest by this holding that when the district court decides to reduce an amount on account of a sanctioned attorney’s inability to pay, it must reduce the amount to that which it determines that the attorney is capable of satisfying. Just as it is within the discretion of the district court to decide whether to reduce the amount at all, the amount to which the sanction will be reduced is equally within the court’s discretion.”

It remanded the matter for the district court to determine an appropriate sanction.

U.S. Court of Appeals, 9th Circuit. Haynes v. San Francisco, No. 10-16327. July 23, 2012.