Substantial Sanctions Remanded for Exercise of Discretion Because District Judge Did Not Believe It Had Authority To Reduce For Impecuniousness Concerns.
The Ninth Circuit in Haynes v. City & County of San Francisco, Case Bi, 10-16327 (9th Cir. July 23, 2012) (published) faced review of a $362,545.61 sanctions award against an attorney pursuing frivolous claims in bad faith and in favor of a defendant pursuant to 28 U.S.C. § 1927. The district judge had imposed the full defense request for sanctions, believing that it could not reduce the sanctions based on the attorney’s inability to pay (he had no assets and negative income for the past few years). Did the award hold up on appeal?
No, it didn’t.
The sanctions award was reversed because, consistent with Second Circuit precedent which the Ninth Circuit found persuasive, a district judge does have discretion to reduce a § 1927 sanctions award based on an attorney’s inability to pay. However, in remanding, the Ninth Circuit was careful to observe that it was only doing so for purposes of having the district judge exercise its discretion--the court did not necessarily have to reduce the amount at all or fashion an award seguing in with attorney’s ability to pay, but only needed to consider the pocketbook factor in the decision making process.
Rich and poor. 1873. Library of Congress.
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