                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

GREGORY MELVIN HAYNES,                 
                Plaintiff-Appellant,
                v.
CITY AND COUNTY OF SAN
FRANCISCO; ANDREW BRAUN; ESTER
CHOO; ROBERT DYNES; JESSICA
FOGLER; REGINA GRAHAM;
FREDERICK HUANG; MARY LEARY;                  No. 10-16327
ALICIA F. LIEBERMAN; HURBERT
OCHITILL; ROBERT OKIN; RICK                    D.C. No.
                                           3:08-cv-02295-JSW
PATEL; REGENTS OF THE UNIVERSITY
OF CALIFORNIA; TAMAR SEIVER;                    OPINION
TRUDY SINGZON; JEFF ADACHI;
ROBERT BUNKER; JOHN CRUDO;
PAUL DAVIES; HEATHER FONG;
HUGH HALL; GREGORY HICKS;
MITCHELL KATZ; LEON LOEW;
MATHEW MASON; GAVIN NEWSOM;
TROY WILLIAMS,
             Defendants-Appellees.
                                       
        Appeal from the United States District Court
           for the Northern District of California
         Jeffrey S. White, District Judge, Presiding

                 Argued and Submitted
         May 16, 2012—San Francisco, California

                     Filed July 23, 2012




                            8385
8386      HAYNES v. CITY AND COUNTY OF SAN FRANCISCO
       Before: Stephen Reinhardt, Richard R. Clifton, and
                N. Randy Smith, Circuit Judges.

                  Opinion by Judge Reinhardt
         HAYNES v. CITY AND COUNTY OF SAN FRANCISCO         8387




                          COUNSEL

Gregory Melvin Haynes, San Francisco, California, appearing
pro se for the plaintiff-appellant.

James Frederick Hannawalt, San Francisco City Attorney’s
Office, San Francisco, California; Scott D. Wiener, San Fran-
cisco City Attorney’s Office, San Francisco, California; Rich-
ard Wesley Pratt, Hassard Bonnington LLP, San Francisco,
California, for the defendants-appellees.


                          OPINION

REINHARDT, Circuit Judge:

   Gregory Haynes (“Haynes”) was the counsel for the plain-
tiff in the underlying action. The district court determined that
Haynes continued pursuit of plaintiff’s claims, after it was
clear that the claims were frivolous and in bad faith. The court
also determined that the defendants had incurred excess costs
and fees of over $360,000 due to his misconduct. The court
imposed sanctions on Haynes in this amount pursuant to 28
U.S.C. § 1927, declining to consider Haynes’s assertion that
he could not possibly pay such an award, and, indeed, that he
had no assets and his net income for the several preceding
8388     HAYNES v. CITY AND COUNTY OF SAN FRANCISCO
years was less that $20,000 per year. We now hold that a dis-
trict court may reduce a § 1927 sanctions award in light of an
attorney’s inability to pay. Because the district court appeared
to believe that it was without discretion to reduce the sanc-
tions award on this ground, and accordingly failed to consider
whether to exercise that discretion, we remand for further pro-
ceedings.

                               I.

   Cheryl Cotterill retained Haynes and filed suit in California
state court after she was taken into custody by the local police
and then hospitalized for ten days because she had suffered a
psychotic episode. Cotterill sued nearly every city and state
official connected to her involuntary detention, raising consti-
tutional excessive force and unlawful detention claims as well
as a variety of state law claims, and requesting monetary,
injunctive and declaratory relief. The defendants removed the
case to federal court.

   In the proceedings before the district court, Haynes
engaged in a wide variety of incompetent and unprofessional
actions. All of Cotterill’s claims were ultimately dismissed
with prejudice, but not before both sides had taken numerous
depositions, engaged in multiple discovery disputes, and par-
ticipated in various other proceedings. The defendants moved
for attorney’ fees and costs, motions which were referred to
a magistrate judge. The magistrate judge recommended that
the district court impose sanctions on Haynes pursuant to 28
U.S.C. § 1927 in the amount of the attorneys’ fees and costs
incurred by the defendants after key depositions had been
taken and it had become clear that Cotterill’s claims were
wholly without merit. The recommended sanctions award was
$362,545.61.

   Haynes filed objections to the magistrate judge’s report and
recommendation. In support of his objections, he submitted a
declaration in which he stated that he would be “unable to pay
          HAYNES v. CITY AND COUNTY OF SAN FRANCISCO              8389
for any judgment in this matter” because he had earned less
than $20,000 in each of the last three years, had no assets, and
was a sole practitioner.

   The district judge adopted the magistrate judge’s report and
recommendation “in every respect,” and ordered Haynes to
pay the full $362,545.61. In his order, he addressed Haynes’s
claim that he could not pay such a sum:

      The Court is not persuaded by Mr. Haynes’ sum-
      mary declaration to the effect that he is “unable to
      pay for any judgment in this matter.” . . . Although
      the Ninth Circuit has not addressed the issue
      directly, the Court finds the reasoning of the Seventh
      Circuit persuasive. See Shales v. General Chauf-
      feurs, Sales Drivers and Helpers Local Union No.
      330, 557 F.3d 746, 749 (7th Cir. 2009) (“A violation
      of § 1927 is a form of intentional tort. And there is
      no principle in tort law that damages depend on a
      tortfeasor’s assets. Quite the contrary. Damages
      depend on the victim’s loss, not the wrongdoer’s
      resources. . . . If Banks [the sanctioned attorney]
      cannot meet all of his financial obligations, he may
      have them written down in bankruptcy.”[).]

In another portion of the Shales opinion, the Seventh Circuit
stated, “If Banks really is a bad lawyer . . . , and is poor
because people are not willing to pay much, or at all, for his
services, then he should turn from the practice of law to some
other endeavor where he will do less harm.” Shales, 557 F.3d
at 750. Haynes appeals.

                                  II.

   [1] Haynes contends that the district court erred in failing
to consider his ability to pay the sanctions award.1 As the dis-
  1
   We address Haynes’s other challenges to the district court’s sanction
order in a memorandum disposition filed concurrently with this opinion.
8390     HAYNES v. CITY AND COUNTY OF SAN FRANCISCO
trict court observed, this Circuit has not yet directly addressed
whether and how a district court should consider an attorney’s
ability to pay when it imposes a sanction award pursuant to
28 U.S.C. § 1927. Cf. Brown v. Baden (In re Yagman), 796
F.2d 1165, 1185 (9th Cir. 1986). We now join the Second Cir-
cuit in holding that, in imposing sanctions pursuant to § 1927,
“it lies well within the district court’s discretion to temper the
amount to be awarded against an offending attorney by a bal-
ancing consideration of his ability to pay.” Oliveri v. Thomp-
son, 803 F.2d 1265, 1281 (2d Cir. 1986).

   [2] The plain language of the sanctions statute dictates this
conclusion. Section 1927 provides that “[a]ny attorney . . .
who so multiplies the proceedings in any case unreasonably
and vexatiously may be required by the court to satisfy per-
sonally the excess costs, expenses, and attorneys’ fees reason-
ably incurred because of such conduct.” 28 U.S.C. § 1927
(emphasis added). The use of the word “may” — rather than
“shall” or “must” — confers substantial leeway on the district
court when imposing sanctions. Thus, with § 1927 as with
other sanctions provisions, “[d]istrict courts enjoy much dis-
cretion in determining whether and how much sanctions are
appropriate.” Trulis v. Barton, 107 F.3d 685, 694 (9th Cir.
1995). A district court may not sanction an attorney for more
than the excess costs, expenses and fees incurred by the
opposing party, see United States v. Associated Convalescent
Enters., Inc., 766 F.2d 1342, 1347-48 (9th Cir. 1985), but is
not required to impose an award that high. Rather, a district
court may impose an award of less than the total excess costs,
expenses and fees incurred by the opposing party, and nothing
in the statute would preclude it from doing so in light of the
sanctioned attorney’s ability to pay.

   A rule that permits the district court to reduce a sanctions
award because of an attorney’s financial circumstances is also
consistent with the underlying purpose or purposes of § 1927.
The purpose of § 1927 may be to deter attorney misconduct,
or to compensate the victims of an attorney’s malfeasance, or
           HAYNES v. CITY AND COUNTY OF SAN FRANCISCO                8391
to both compensate and deter. Compare Oliveri, 803 F.2d at
1281 (identifying the “underlying purpose of sanctions,”
including § 1927 sanctions, as being “to punish deviations
from proper standards of conduct with a view toward encour-
aging future compliance and deterring further violations”),
with Hamilton v. Boise Cascade Express, 519 F.3d 1197,
1205 (10th Cir. 2008) (“[T]he text of § 1927 . . . indicates a
purpose to compensate victims of abusive litigation practices,
not to deter and punish offenders.”). In any case, imposing
sanctions in an amount many times greater than the attorney
will ever be able to pay may in some instances represent only
a futile gesture that does little either to compensate victims or
to deter future violators.

   [3] We therefore hold that a district court may, in its dis-
cretion, 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 attor-
ney 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.

                                   III.

   The district court appears to have considered itself to be
without the authority to take into account Haynes’s inability
to pay the defendants’ excess fees and costs when determin-
ing the final amount of the sanctions awarded. Thus, it failed
to apply the correct legal rule, and therefore abused its discre-
tion. See United States v. Hinkson, 585 F.3d 1247, 1262 (9th
Cir. 2009) (en banc).2
  2
   The defendants assert that the district court’s order is unclear in this
regard, and that the court may not have necessarily believed itself to be
8392       HAYNES v. CITY AND COUNTY OF SAN FRANCISCO
   The district court’s belief that it was without discretion to
reduce the sanctions award resulted from its reliance on a
Seventh Circuit decision, Shales v. General Chauffeurs, Sales
Drivers and Helpers Local Union No. 330, 557 F.3d 746 (7th
Cir. 2009). In Shales, as in this case, the court considered the
appeal of an attorney sanctioned under § 1927 who contended
that the district court had erred in failing to reduce the sanc-
tion award because of his inability to pay. Id. at 748.
Although the court could have disposed of the appeal by hold-
ing that a district court is not required to reduce a § 1927
sanctions award for that reason,3 the Shales court went fur-
ther, holding that “a lawyer’s ability to pay does not affect the
appropriate award for a violation of § 1927,” and that only the
effect of the misconduct on the party seeking sanctions is rele-
vant. Id. at 749 (emphasis added). The rule adopted in Shales
— that a district court cannot consider an attorney’s ability to
pay — followed from the court’s conclusion that “[a] viola-
tion of § 1927 is a form of intentional tort,” and that therefore,
as with other intentional torts, “[d]amages depend on the vic-
tim’s loss, not the wrongdoer’s resources.” Id. Among the dis-
tinctions between § 1927 and a traditional intentional tort,
however, is that with an intentional tort the amount of dam-
ages is a question of fact to be determined by a finder of fact,
while with § 1927 the amount of the sanctions award is a mat-
ter of discretion conferred upon the district court.

unable to reduce the sanctions award. We disagree. Even if the district
court’s order were unclear, however, the remedy in this case would be the
same, as we would be required to remand for the district court to clarify
the basis on which it exercised its discretion. See McGrath v. County of
Nevada, 67 F.3d 248, 253 (9th Cir. 1995) (“If the district court fails to pro-
vide a clear indication of how it exercised its discretion, we will remand
the fee award for the court to provide an explanation.”).
   3
     Such a holding would have been consistent both with prior Seventh
Circuit precedent, see, e.g., Fox Valley Const. Workers Fringe Benefit
Funds v. Pride of the Fox Masonry & Expert Restorations, 140 F.3d 661,
667 (7th Cir. 1998), and with the Tenth Circuit’s opinion in Hamilton v.
Boise Cascade Express, 519 F.3d 1197, 1206 (10th Cir. 2008), with which
the Shales court purported to “agree,” see Shales, 557 F.3d at 749.
         HAYNES v. CITY AND COUNTY OF SAN FRANCISCO        8393
   [4] Thus, we reject the reasoning of Shales and adopt the
plain meaning of § 1927 as the law of this Circuit — the same
rule adopted by the Second Circuit — that a district court may
reduce the amount of a § 1927 sanctions award because of the
sanctioned attorney’s inability to pay. The district court
abused its discretion when, in reliance on Shales, it declined
to consider the sanctioned attorney’s contention that he was
unable to pay the sanctions claimed by his opposing counsel
before determining within its discretion the amount of sanc-
tions to be imposed.

                              IV.

   [5] Accordingly, we remand for the district court to recon-
sider its sanction order in light of our holding that it may, in
its discretion, reduce the § 1927 sanctions because of
Haynes’s inability to satisfy the award, and to make whatever
other modification to its sanction order it may sua sponte
deem appropriate.

  REMANDED.
