28 U.S.C. section 1927 provides that "[a]ny attorney or other person admitted to conduct cases in any court of the United States . . . who so multiplies the proceedings in any case as to increase costs unreasonably and vexatiously may be required by the court to satisfy personally such excess costs."
In re Peoro, 793 F.2d 1048, 1051 (9th Cir. 1986) (affirming award of sanctions under section 1927 against party who attempted to relitigate the validity of his lien, which a bankruptcy court had previously held was void).
Frantz v. U.S. Powerlifting Federation, 836 F.2d 1063, 1066 (7th Cir. 1987) (when assessing a motion for sanctions "[t]he absence of ineluctable answers does not imply the privilege to indulge in an unexamined gestalt.").
District courts enjoy much discretion in determining whether and how much sanctions are appropriate. Frantz, 836 F.2d at 1066. However, "[d]iscretionary choices are not left to a court's inclination, but to its judgment; and its judgment is to be guided by sound legal principles." Id. (quoting Albemarle Paper Co. v. Moody, 422 U.S. 405, 416 (1975).
"Sanctions pursuant to section 1927 must be supported by a finding of subjective bad faith." New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989). "Bad faith is present when an attorney knowingly or recklessly raises a frivolous argument or argues a meritorious claim for the purpose of harassing an opponent." Id. (quoting Estate of Blas, 792 F.2d 858, 860 (9th Cir. 1986))
The district court does not have power to sanction conduct that occurred in a different court in a different case. See GRiD Systems Corp. v. John Fluke Mfg. Co., 41 F.3d 1318, 1319 (9th Cir. 1994); accord In re Peoro, 793 F.2d at 1051 (affirming imposition of sanctions awarded by district courts reviewing appeals from bankruptcy proceedings).
"The filing of a notice of appeal is an event of jurisdictional significance--it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal." Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982).
See United States v. Kersting (Two Cases), 891 F.2d 1407, 1413 (9th Cir. 1989) (finding that motion for discovery brought after notice of appeal directly related to good faith, an issue on appeal, and therefore was beyond the district court's jurisdiction), cert. denied, 498 U.S. 812 (1990).