In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 05-2021 & 05-2115

THE JOLLY GROUP, LTD.,

Plaintiff,

and

MICHAEL J. ROVELL,

Respondent-Appellant,

Cross-Appellee,

v.

MEDLINE INDUSTRIES, INC.,

Defendant-Appellee,

Cross-Appellant.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 C 9390—Suzanne B. Conlon, Judge.

____________

ARGUED OCTOBER 26, 2005—DECIDED JANUARY 24, 2006

____________

Before FLAUM, Chief Judge, and EVANS and WILLIAMS,

Circuit Judges.

EVANS, Circuit Judge. In this appeal, attorney Michael J.

Rovell challenges a rather modest ($450 plus 4 hours of

attorneys fees) sanction order issued against him stemming

from his representation of The Jolly Group, Ltd. in a breach

of contract action against Medline Industries, Inc. For
2 Nos. 05-2021 & 05-2115

reasons we will explain, we find that the district court did

not abuse its discretion in imposing the sanctions, but we

also deny Medline’s cross-appeal asking us to significantly

enlarge the scope of the penalty: Medline seeks a more

robust sanction order—in excess of $30,000 (as of May

2004) with the meter still running.

Jolly sued Medline in 2003. Medline moved to dismiss the

complaint as failing to allege the existence of a valid

written contract and because the statute of frauds barred

enforcement of a purported oral contract. Instead of responding to the motion, Jolly filed an amended complaint.

Medline’s counsel sent Rovell a letter pointing out factual

inconsistencies between the two complaints and threatening

a Rule 11 motion. Medline then moved to dismiss the

amended complaint, and Jolly filed its response.

The district court (Judge Suzanne B. Conlon) dismissed

the amended complaint with prejudice on April 30, 2004.

Two weeks later, Medline moved for sanctions under

Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927,

which authorizes sanctions against an attorney who

“multiplies the proceedings in any case unreasonably

and vexatiously.” Instead of responding to the sanctions

motion, Jolly moved the next day, May 14, 2004, for reconsideration of the dismissal and for leave to file a second

amended complaint.

On June 4, 2004, the district judge denied everything

except the § 1927 sanctions, finding that Rovell had in bad

faith asserted four different purported contracts as well

as contradictory versions of events. Rovell moved to vacate the order, saying he had not been given an opportunity

to respond to Medline’s motion before sanctions

were ordered. Medline, meanwhile, continued to press for

even larger sanctions. Judge Conlon held a hearing and

agreed that Rovell should have been given an opportunity

to respond to Medline’s sanctions motion. She vacated the
Nos. 05-2021 & 05-2115 3

sanctions portion of her June 4 order and referred the

matter to Magistrate Judge Geraldine Soat Brown for

further proceedings.

After briefing and oral argument, Magistrate Judge

Brown recommended that the Rule 11 sanctions motion

be denied but that § 1927 sanctions were justified. In her

careful § 1927 analysis, the magistrate judge divided

Rovell’s conduct into two time periods: before and after the

district judge’s decision to dismiss the suit. Noting that

“[T]he line between strong advocacy and vexatious conduct is not always bright,” the judge declined to find

improper motives behind Jolly’s original complaint and

amended complaint. On the other hand, she found Rovell’s

May 14, 2004, motions, after the case had been dismissed

with prejudice, “clearly vexatious and unreasonable.” She

rejected Rovell’s argument that he had sought reconsideration in order to perfect the appellate record and went on

to criticize what she considered his “sloppiness” in assembling pleadings, “disingenuous explanations,” and “negligent[,] . . . reckless, and indifferent conduct” that demonstrated bad faith and justified sanctions under § 1927. She

recommended that Medline be awarded excess costs based

on 4 hours of attorney time and that Rovell be assessed

$450 payable to the court for wasting its time and resources. District Judge Conlon adopted the recommendations. Rovell now appeals.

We review a district court’s imposition of attorney

sanctions for an abuse of discretion. U.S. Bank Nat’l Ass’n,

N.D. v. Sullivan-Moore, 406 F.3d 465, 469 (7th Cir. 2005).

We have explained that a court has discretion to impose

§ 1927 sanctions when an attorney has acted in an “objectively unreasonable manner” by engaging in “serious

and studied disregard for the orderly process of justice,”

Pacific Dunlop Holdings, Inc. v. Barosh, 22 F.3d 113, 119

(7th Cir. 1994); pursued a claim that is “without a plausible

legal or factual basis and lacking in justification,” id.; or
4 Nos. 05-2021 & 05-2115

“pursue[d] a path that a reasonably careful attorney would

have known, after appropriate inquiry, to be unsound,”

Kapco Mfg. Co. v. C & O Enters., Inc., 886 F.2d 1485, 1491

(7th Cir. 1989). We have also interpreted § 1927 “to impose

a continuing duty upon attorneys to dismiss claims that are

no longer viable.” Dahnke v. Teamsters Local 695, 906 F.2d

1192, 1201 n.6 (7th Cir. 1990).

Rovell protests that he should not have been punished for

filing the May 14, 2004, motions because Medline’s sanctions motion had preceded those filings and had sought

sanctions on a different basis. Of course, a district court

acting under § 1927 is not bound by the parties’ motions

and may, in its sound discretion, impose sanctions sua

sponte as long as it provides the attorney with notice

regarding the sanctionable conduct and an opportunity to

be heard. Johnson v. Cherry, 422 F.3d 540, 551-52 (7th Cir.

2005). This means that the court could properly take into

account all of Rovell’s conduct in this case and calibrate

sanctions accordingly. As Judge Conlon noted, the potentially sanctionable nature of Rovell’s filings was raised

during oral argument on his motion to vacate and, of

course, during proceedings before the magistrate judge.

Thus, we must reject Rovell’s argument that the § 1927

sanctions are procedurally improper.

Rovell also contends that sanctions are substantively

improper because his May 14, 2004, motions were supported by a proper motive and sufficient legal basis. He

claims that a second amended complaint was necessary to

change a key date in one of Jolly’s allegations. Rovell was,

in essence, attempting to perfect the record because he “did

not want to appeal the dismissal of a complaint that had an

allegation he now believed was untrue.” But the date in

question had been a central issue in the litigation up to that

point, and so the district court interpreted this move as

simply an effort by Rovell to abandon an unsuccessful legal

theory and substitute a new one. Rovell counters that his
Nos. 05-2021 & 05-2115 5

contemplated correction was necessary to properly address

an “argument” that was “raised sua sponte by the trial

court” in its April 30, 2004, ruling. “Medline had never

made [this] argument in either of its two motions to dismiss . . . ,” he says, “and, accordingly, Jolly had never had

a chance to respond to it.”

The district court correctly observed that “[m]otions for

reconsideration do not provide a vehicle for a party to

introduce new evidence or legal theories that could have

been presented earlier.” Caisse Nationale de Credit Agricole

v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996). Even

if he believed his intentions were sound, we think Rovell

went wrong in characterizing a conclusion reached by the

district court, after full briefing and argument by both

parties, as an “argument” whose basis his client had to

challenge in order to protect an appeal. The court drew its

conclusions based on filings Jolly knowingly submitted and

argued. At that point, Rovell was, for better or worse, stuck

with the record he had made. After his case was dismissed

with prejudice, prudence should have counseled that by

filing additional motions aimed at changing facts and

responding to the court’s conclusions, he was pursuing a

path that was unsound.

We see no need to address two additional sins Magistrate

Judge Brown found in the way Rovell assembled some of his

pleadings. Neither error appears to have multiplied the

proceedings, and one of them, a collating mistake, seems

attributable to Rovell’s bad eyesight, an unfortunate

consequence of his diabetes.

Finally, we find no merit in Medline’s argument that the

district court’s sanctions didn’t go far enough. Medline

continues to demand recovery of its litigation costs for the

claims Rovell pursued prior to dismissal of the suit. We

cannot agree with Medline that the district court abused its

discretion in allowing Jolly to file a first amended com-
6 Nos. 05-2021 & 05-2115

plaint; whether that pleading had the effect of vexatiously

multiplying the litigation was a matter for the district court

to determine in its sound discretion. Based on our review of

the record, we think the court drew a sensible and proper

distinction between Rovell’s advocacy before dismissal,

doomed as it might have been, and his decision after

dismissal to continue inflicting motions on his adversary

and the court.

The judgment of the district court is AFFIRMED.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—1-24-06