United States courts possess powers under statutes, procedural rules, and tradition (“inherent” powers) to punish the filing of frivolous lawsuits. One such statute prohibits “vexatious multiplication of the proceedings” by attorneys. Federal statute (28 U.S.C. Section 1927) provides:
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorneys' fees reasonably incurred because of such conduct.
By its terms imposes an obligation upon attorneys throughout the entire litigation to avoid dilatory tactics. An award under Section 1927 is proper when the attorney's actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay. Sheer stupidity, however, is not enough. Sanctions must be accompanied by a finding of bad faith.
Another ground for sanctions is Rule 11 of the Federal Rules of Civil Procedure.
Rule 11 sanctions cover any signed papers filed in federal district court. Sanctions may be awarded for filing three types of papers: factually frivolous (not "well grounded in fact"); legally frivolous (not "warranted by existing law or a good faith argument for the exclusion, modification or reversal of existing law."); and papers "interposed for an improper purpose." Reasonable expenses and fees may be awarded under this Rule, and both the attorney and party are vulnerable.
Sanctions are very rare in practice. Any reasonable excuse for filing the lawsuit usually suffices.