From Shales v. General Chauffeurs, Sales Drivers & Helpers Local Union No. 330, 2009 U.S. App. LEXIS 4237 (7th Cir. Feb. 27, 2009):

Banks's principal argument is that Rule 11 is not a pure fee-shifting statute, so ability to pay should be taken into account. This is true as far as it goes. "A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated." Fed. R. Civ. P. 11(c)(4). The poorer the lawyer, the lower the sanction can be and still deter repetition by the lawyer or anyone similarly situated. ... A district judge therefore should take the sanctioned party's resources into account when setting the amount of a Rule 11 sanction. See Johnson v. A.W. Chesterton Co. , 18 F.3d 1362, 1366 (7th Cir. 1994). But the district judge imposed sanctions under §1927, a real fee-shifting law, as well as Rule 11. A n award under §1927 depends (as an award under Rule 11 does not) on a finding of bad faith. It is awfully hard to see why a lawyer who acted in bad faith should be let off lightly. Banks's brief essentially ignores §1927, but that does not make it go away.

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. A physician who injures a patient by an act of medical malpractice will be ordered to pay whatever injury the malpractice causes. The physician's assets — and whether he holds his property in a relative's name — will not play any role in determining the amount of damages. So too if Banks had walked up to Dominic Romanazzi, the principal defendant..., and punched Romanazzi in the mouth. The damages for battery would depend on Romanazzi's injury, not on Banks's wealth. Likewise if Banks has slandered Romanazzi. Instead of hitting Romanazzi with a fist or an insult, Banks hit him with a lawsuit. Again damages depend on injury, once the judge concludes that the litigation was tortious. (We speak here of compensatory rather than punitive damages in tort litigation; the award under §1927 is compensatory, not punitive.)

A physician only four years out of medical school does not get a discount on his malpractice judgments; Banks's observation that he was only four years out of law school when he took this case does not give him a license to injure others by making unsupported assertions and clinging to them long after their falsity has been revealed. This would be plain enough if Banks had injured his own client by malpractice; the proposition is no different when he injures his client's adversary. We therefore agree with Hamilton v. Boise Cascade Express, 519 F.3d 1197, 1206 (10th Cir. 2008), that a lawyer's ability to pay does not affect the appropriate award for a violation of §1927. (Several cases in this circuit, of which Fox Valley Construction Workers v. Pride of the Fox Masonry & Expert Restorations, 140 F.3d 661, 667 (7th Cir. 1998), is an example, assume that district judges may consider the lawyer's wealth but hold that it is never necessary to do so. These decisions lump together analysis under Rule 11 and §1927, apparently because the parties did the same. For reasons we have given, it is necessary to distinguish these two sources of authority. No case we could find in this circuit holds that consideration of the wrongdoer's wealth is necessary under §1927; such a position would be outré if taken in a tort suit.)

***Making the award depend on the injury, rather than the offender's wealth, has four additional benefits:

(a) It avoids the expense of suit-by-suit inquiries into ability to pay, which as this case shows may be complex. Whether a fraudulent conveyance has occurred can be hard to pin down. Why replicate a bankruptcy proceeding just to decide on an award of sanctions?

(b) It avoids false positives. Some people who claim to be indigent aren't. Indeed, the very assertion "I'm indigent, so please excuse me" implies solvency. Why seek to avoid an award that, if you are destitute, cannot harm you? (A person who fears that the award could be collected from future income may have it discharged in bankruptcy.)

(c) It avoids disparate treatment of identically situated litigants. District judges differ substantially in how they use discretion. Rights measured by the chancellor's foot are not "rights" of any kind, and such a stochastic process is not the administration of justice. We need rules that apply in an even-handed fashion. (d) It achieves deterrence. If Banks really is a bad lawyer (as he depicts himself), 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. No court would say, in a medical-malpractice action, that a doctor whose low standards and poor skills caused a severe injury should be excused because he does not have very many patients. No more is a bad lawyer excused because he has few clients.