Haynes v. City and County of San Francisco

A district court may, in its discretion, reduce a sanctions award under 28 U.S.C. § 1927 if an attorney is unable to pay the total costs of excess costs, expenses, and fees.

Attorney Gregory Haynes represented a plaintiff in a matter involving numerous claims that were eventually dismissed with prejudice. The district court determined that the plaintiff’s claims were frivolous and in bad faith and, under 28 U.S.C. § 1927, imposed sanctions of $362,545.61, the amount of the defendants’ costs in the underlying matter. Further, the district court rejected Haynes’s argument that he could not pay such an award. On appeal, Haynes asserted that the district court erred by not considering his ability to pay the sanction. In considering the plain language (the use of “may”) and the purpose of § 1927, the Court found that nothing in the statute precludes a district court from awarding less than the total amount of costs, fees, and expenses. The Court held that it is within the district court’s discretion to reduce a § 1927 sanctions award in light of an attorney’s ability to pay and other reasons, although the district court is not required to reduce the amount to one such that the attorney is capable of paying. Because the district court found itself without discretion to reduce the award, the district court applied the wrong legal rule and thus abused its discretion. REMANDED.