Gregory Haynes v. City of San Francisco
2012 U.S. App. LEXIS 15102
| 9th Cir. | 2012Background
- Haynes represented Cotterill in a federal case that removed from state court after Cotterill’s involuntary detention.
- Court imposed §1927 sanctions totaling $362,545.61 for pursuing frivolous claims after key depositions.
- Haynes declared he could not pay any judgment due to low income/assets; district court declined to consider his ability to pay.
- District court relied on Shales v. General Chauffeurs (Seventh Circuit) to resist reducing sanctions for inability to pay.
- This Court adopts a different rule: district courts may reduce §1927 sanctions based on the sanctioned attorney’s inability to pay.
- Case remanded to reconsider sanctions consistent with the ability-to-pay standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a district court may reduce §1927 sanctions for inability to pay | Haynes argues court must consider ability to pay | Defendants contend sanctions amount should reflect actual excess costs regardless of pay | Yes; court may reduce sanctions due to inability to pay |
| Whether Shales prevented consideration of ability to pay | Haynes relies on Shales to bar consideration of payability | Defendants rely on Shales to limit discretion | No; Shales rejected; district court may consider ability to pay under §1927 |
| Whether remand is required to recompute sanctions | Remand unnecessary if amount already correct | Remand needed to recalculate with ability-to-pay | Remand required to adjust sanctions consistent with ability to pay |
Key Cases Cited
- Shales v. General Chauffeurs, Sales Drivers and Helpers Local Union No. 330, 557 F.3d 746 (7th Cir. 2009) (district court may not consider ability to pay; overruled by circuit on this point in favor of discretion to weigh payability)
- Oliveri v. Thompson, 803 F.2d 1265 (2d Cir. 1986) (discretion to temper sanctions by defendant's ability to pay)
- Hamilton v. Boise Cascade Express, 519 F.3d 1197 (10th Cir. 2008) (sanctions purposes include compensation and deterrence)
- Brown v. Baden (In re Yagman), 796 F.2d 1165 (9th Cir. 1986) (recognizes ability to pay considerations in sanctions)
- McGrath v. County of Nevada, 67 F.3d 248 (9th Cir. 1995) (remand when district court fails to explain discretionary ruling)
- United States v. Associated Convalescent Enters., Inc., 766 F.2d 1342 (9th Cir. 1985) (sanctions limits to excess costs and discretion to reduce)
- Shales v. General Chauffeurs, Sales Drivers and Helpers Local Union No. 330, 557 F.3d 746 (7th Cir. 2009) (see above; cited for prior approach rejected by this court)
- Oliveri v. Thompson, 803 F.2d 1265 (2d Cir. 1986) (see above)