UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

AARON, MACGREGOR & ASSOCIATES, 

LLC, et al.,

Plaintiffs,

v.

ZHEIJIANG JINFEI KAIDA WHEELS 

CO., LTD., et al.,

Defendants.

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CAUSE NO. 3:15-CV-254-MGG

OPINION AND ORDER

On June 7, 2017, Defendants, Zhejiang Jinfei Kaida Wheels Co., Ltd. (“Jinfei”), Future 

Industrial & Trading, Inc., and Bingzao Ge (collectively “Defendants”), filed their Motion for 

Rule 11, 28 U.S.C. § 1927, and Inherent Authority Sanctions Against Plaintiffs and Their 

Counsel [DE 60]. On June 21, 2017, Plaintiffs, Aaron, MacGregor & Associates, LLC (“AMA”) 

and Future International, LLC, and Third-Party Defendant Aaron Zou (collectively “Plaintiffs”), 

filed their brief in opposition to Defendants’ motion for sanctions. Defendants’ motion became 

ripe on June 28, 2017, when they filed their reply brief. The undersigned retains jurisdiction 

over this case based on the parties’ consent and 28 U.S.C. § 636(c). For the reasons discussed 

below, the Court issues the following Opinion and Order denying without prejudice Defendants’ 

motion for sanctions.

I. RELEVANT BACKGROUND

A. Factual Background

AMA is a business that buys and sells vehicle parts for resale. While visiting China, 

AMA’s president and founder, Aaron Zou, was approached by Bingzao Ge, the chairman of 
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Jinfei, a Chinese company that manufactures vehicle parts. On behalf of their respective 

companies, Zou and Ge reached a deal to form Future International, LLC (“Future 

International”). Through Future International, AMA was expected to assist Jinfei with the 

expansion of its market in the United States beginning with the recreational vehicle market 

around Elkhart, Indiana. The parties entered three contracts to govern the funding, development, 

and management of Future International.

The parties’ Investment Contract and Consultation Contract were executed on February 

26, 2012. Despite agreeing that AMA would fund about 10% of the company while Jinfei would 

fund 90% of the company, neither company had invested in Future International as of October 

2012. AMA had been waiting to invest until Jinfei received approval from the Chinese 

government. Jinfei, however, received the required approval in April 2012 without disclosing it 

to AMA. In October 2012, the parties executed a new contract that provided for AMA’s 10% 

investment in Future International and Jinfei’s payment of consulting fees to AMA back to 

February 2012. On January 31, 2013, Jinfei and Ge registered Future Industrial & Trading, Inc. 

(“FIT”) with the Indiana Secretary of State without informing AMA. Jinfei never invested any 

funds into Future International and never paid consulting fees to AMA.

B. Procedural Background

On May 13, 2015, Plaintiffs filed a complaint in St. Joseph County Superior Court 

alleging that FIT retained profits generated by customer contacts they established through their 

connection to AMA and that the FIT name, under which it continues to operate, is confusingly 

similar to the name Future International. Plaintiffs’ complaint included claims for breach of the 

three contracts, breach of fiduciary duty, unjust enrichment, unfair competition, and trademark 

infringement. Defendants removed the case to this Court alleging original jurisdiction under 28 
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U.S.C. § 1331 arising from Plaintiffs’ Lanham Act (15 U.S.C. § 1051 et seq.) claim for federal 

trademark infringement.

Before Defendants responded to Plaintiffs’ original complaint, Plaintiffs filed their

amended complaint on August 12, 2015. In response, Defendants filed a motion to dismiss for 

failure to state a claim challenging all seven causes of action as raised by Future International 

and the unjust enrichment and trademark infringement claims raised by AMA as well. On April 

11, 2016, this Court denied Defendant’s motion to dismiss.1 [DE 28].

The Court then issued its Rule 16(b) Preliminary Pretrial Scheduling Order on July 7, 

2016, setting November 28, 2017, as the deadline for the close of all discovery on Plaintiffs’ 

remaining claims. [DE 47]. In September 2016, FIT and Ge served their first sets of discovery 

requests, including requests for production, requests for admission, and special interrogatories, 

on Plaintiffs. On November 2, 2016, AMA served responses to FIT and Ge’s interrogatories 

[DE 61-3] and Future International responded to Ge’s request for production of documents [DE 

61-4]. On November 9, 2016, Future International served responses to FIT’s requests for 

admission [DE 61-6].

Through their interrogatories, FIT and Ge sought “foundational information” from AMA 

regarding the facts supporting Plaintiffs’ claims. AMA objected to most of the requests as 

“overly burdensome insofar as [they seek] ‘all facts,’ [and] to the extent [they seek] the mental 

impressions of counsel in violation of the work product doctrine.” [DE 61-3 at 3–4]. 

 1 In its opinion and order, the Court noted Plaintiffs’ concession that only AMA could bring a breach of the 

October 2012 contract claim and an unjust enrichment claim. [DE 28 at 7]. Accordingly, the Court dismissed those 

two claims as to Future International only. [Id. at 11]. Plaintiffs’ remaining claims include: Breach of the 

Investment Contract by Plaintiffs against Jinfei only (Count I); Breach of the Consultation Contract by Plaintiffs 

against Jinfei only (Count II); Breach of October 2012 Contract by AMA only against Jinfei only (Count III); 

Breach of Fiduciary Duty by Plaintiffs against Jinfei only (Count IV); Unjust Enrichment by AMA only against 

Jinfei only (Count V); Unfair Competition by Plaintiffs against all three Defendants (Count VI); and Trademark 

Infringement by Plaintiffs against all three Defendants (Count VII). 
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Nevertheless, AMA responded by repeating facts incorporated into the amended complaint while 

noting that “discovery is ongoing, and [reserving] the right to supplement its answer.” [Id.].

Through his requests for production of documents, Ge similarly sought documents 

supporting Future International’s contentions. Future International objected to each request as 

overly burdensome for seeking “all” documents and the mental impressions of counsel using the 

same language AMA used when objecting to FIT and Ge’s interrogatories. [DE 61-4 at 3–4]. 

Future International then responded by referring to “Plaintiffs Bates 295–298,” which are the 

incorporation documents for FIT dated October 20, 2014, on file with the Indiana Secretary of 

State. [Id.; see also DE 61-5].

Through its requests for admission, FIT asked for admissions related to facts it deemed 

foundational to Plaintiffs’ claims, including whether (1) Future International sold any goods or 

products, provided any services, or advertised goods or services using its mark; (2) Future 

International has any evidence of FIT using Future International’s mark or a confusingly similar 

mark or any evidence of confusion; (3) Jinfei owned 100% of Future International; and (4) 

Future International ever used its own mark, obtained a tax ID, engaged in business operations, 

or opened a business bank account. Future International admitted only that it “has not had a 

business bank account.” [DE 61-6 at 5]. Future International denied the rest of FIT’s requests 

with objections to most alleging that FIT was seeking “the mental impressions of counsel in 

violation of the work product doctrine.” [Id. at 3–5]. To some requests, Future International also 

noted that it was “not able to respond until discovery is completed.” [Id.].

Finding Plaintiffs’ responses deficient, Defendants’ counsel wrote a letter to Plaintiffs’ 

counsel on March 8, 2017, seeking supplementation. [DE 61-7]. In a written response dated 

April 28, 2017, Plaintiffs highlighted ongoing discovery shortcomings by Defendants and 
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indicated that their supplementation had been hindered by Defendants’ withholding of relevant 

discovery responses. [DE 61-8 at 3]. Specifically, Plaintiffs’ counsel stated: 

Plaintiffs will supplement their responses after Defendants confirm the scope of 

their supplementation and produce the entire supplementation. Plaintiffs will 

require thirty (30) days to review the information after Defendants submit their 

final supplementation, and Plaintiffs will then supplement accordingly.

[Id.]. On May 1, 2017, Defendants’ counsel sent another letter to Plaintiffs’ counsel reiterating 

concerns over Plaintiffs’ discovery responses, alerting Plaintiffs to the possibility of a Rule 37 

motion to compel, and arguing that Plaintiffs’ insufficient discovery responses proved a violation 

of the Rule 11(b) requirement of a reasonable investigation of claims before they are filed. [DE 

61-9].

On May 11, 2017, Defendants’ counsel then served a copy of the instant motion for 

sanctions and its accompanying memorandum in support on Plaintiffs’ counsel. [DE 61-10, 61-

11]. Plaintiffs did not withdraw their claims or otherwise correct them. Therefore, Defendants 

filed the instant motion on June 7, 2017, having waiting more than the 21 days required by Fed. 

R. Civ. P. 11(c)(2).

2

 Through their motion, Defendants ask the Court to use its authority under 

Rule 11(c), 28 U.S.C. § 1927, and its own inherent power to sanction Plaintiffs by (1) dismissing 

all of the claims in their amended complaint with prejudice and (2) ordering Plaintiffs and their 

counsel to pay Defendants’ reasonable attorney fees and costs incurred in litigation of this action 

after removal. In their defense, Plaintiffs argue that (1) Defendants are raising discovery 

disputes that do not rise to the level of Rule 11 litigation abuses; (2) the Court’s order denying 

 2 Fed. R. Civ. P. 11(c)(2) states:

A motion for sanctions must be made separately from any other motion and must describe the 

specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but 

it must not be filed or be presented to the court if the challenged paper, claim, defense, 

contention, or denial is withdrawn or appropriately corrected within 21 days after service or 

within another time the court sets. 
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Defendants’ motion to dismiss already establishes the sufficiency of the amended complaint; and 

(3) the amended complaint and initial disclosures provide competent evidentiary support for 

Plaintiffs’ claims for which Rule 11(b) requires nothing more.

II. ANALYSIS

A. Rule 11 Sanctions

Fed. R. Civ. P. 11(b) sets the standard for integrity in each attorney’s or unrepresented 

party’s representations to the court. Specifically, Rule 11(b)(3) requires attorneys and 

unrepresented parties to certify 

to the best of that person’s knowledge, information, and belief, formed after an 

inquiry reasonable under the circumstances [that] the factual contentions have 

evidentiary support or, if specifically so identified, will likely have evidentiary 

support after a reasonable opportunity for further investigation or discovery.

As a result, “[r]epresentations in a filing in a federal district court that are not grounded in an 

‘inquiry reasonable under the circumstances’ or that are unlikely to ‘have evidentiary support 

after a reasonable opportunity for further investigation or discovery violate Rules 11(b) and 

11(b)(3).” City of Livonia Emps.’ Ret. Sys. & Local 295/Local 851 v. Boeing Co., 711 F.3d 754, 

762 (7th Cir. 2013)). Indeed, “an attorney violates Rule 11 in maintaining a claim that is 

unwarranted by existing law or has no reasonable basis in fact.” Fabriko Acquisition Corp. v. 

Prokos, 536 F.3d 605, 610 (7th Cir. 2008) As a result, Rule 11 requires a plaintiff to “engage in 

a reasonable, meaningful investigation . . . prior to filing its complaint.” Smart Options, LLC v. 

Jump Rope, Inc., No. 12 C 2498, 2013 WL 500861, at *4 (N.D. Ill. Feb. 11, 2013). “[T]he court 

may impose an appropriate sanction on any attorney, law firm, or party that violate[s] [Rule 

11(b)] or is responsible for the violation.” Fed. R. Civ. P. 11(c)(1); see, e.g., United Stars Indus., 

Inc. v. Plastech Engineered Prod., Inc., 525 F.3d 605, 610 (7th Cir. 2008) (sanctioning a law 
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firm that “advanced a position that never had any evidentiary support, and thus necessarily could 

not have been based on a reasonable investigation preceding the counterclaim.”); 

By filing a Rule 11 motion for sanctions based on non-frivolous allegations, a party 

successfully makes a prima facie showing of sanctionable conduct. Vandeventer v. Wabash 

Nat’l Corp., 893 F. Supp. 827, 840 (N.D. Ind. 1995) (citing Shrock v. Altru Nurses Registry, 810 

F.2d 658 (7th Cir. 1987). Once the prima facie showing is made, “the burden of proof shifts to 

the non-movant to show it made a reasonable pre-suit inquiry into its claim.” Digeo, Inc. v. 

Audible, Inc., 505 F3d 1362, 1368 (Fed. Cir. 2007). Thus, the burden of reasonable 

investigations falls on the proponent of a proposition, not the opponent. Vandeventer, 893 F. 

Supp. at 840. Here, the burden shifts to Plaintiffs to show that they reasonably investigated their 

claims against Defendants before filing their complaint now that Defendants have filed the 

instant motion for sanctions.

Assessing the reasonableness of a party’s pre-filing inquiry requires the court to ascertain 

whether “the party or his counsel [objectively] should have known that his position is 

groundless.” Cuna Mut. Ins. Soc’y v. Office & Prof’l Emps. Int’l Union, Local 39, 443 F.3d 556, 

560 (7th Cir. 2006) (citations omitted). Plaintiffs are not required to have sufficient information 

to prevail on a motion for summary judgment, a motion to dismiss for failure to state a claim, or 

at trial to comply with Rule 11. Vista Mfg., Inc. v. Trac-4, Inc., 131 F.R.D. 134, 138 (N.D. Ind. 

1990) (citation omitted). A plaintiff’s pre-filing inquiry must only be reasonable under the 

circumstances, which vary from case to case. Id. Therefore, the court must consider all the 

circumstances of a case before awarding Rule 11 sanctions. Cooter & Gell v. Hartmarx Corp., 

496 U.S. 384, 401 (1990). Moreover, Rule 11 sanctions are a rarity. District judges must 

“reflect seriously, and consider fully, before imposing (or denying) sanctions.” 
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II Ltd. v. English, 217 Fed. App’x 527, 529 (7th Cir. 2007) (citing Mars Steel Corp. v. Cont’l 

Bank N.A., 880 F.2d 928, 936 (7th Cir. 1989)). 

1. Effect of This Court’s Denial of Defendants’ Motion to Dismiss on

Sanctions Analysis

Before conducting any analysis of the reasonableness of Plaintiffs’ pre-complaint inquiry, 

the Court must consider the effect of this Court’s order denying Defendants’ motion to dismiss 

Plaintiffs’ claims. In its order, this Court held that (1) Future International had authority to assert 

claims against Defendants, (2) Future International pleaded sufficient factual allegations to state 

a claim for breach of the Investment Contract and Consultation Contract under a third party 

beneficiary theory, and (3) AMA and Future International pleaded facts sufficient to satisfy the 

relevant plausibility standard3 for their unfair competition and trademark infringement claims, 

both of which turn on the likelihood of customer confusion. [DE 28]. Yet in essence, 

Defendants’ instant motion for sanctions contends that Plaintiffs’ amended complaint is frivolous 

and therefore subject to dismissal with prejudice.

Neither party cites authority to suggest that Rule 11 sanctions are avoided in situations 

where the court holds that a plaintiff’s pleadings are sufficient under the Rule 12(b)(6) 

plausibility standard set forth in Iqbal and Twombly. However, the Court’s order demonstrates 

that Plaintiffs’ amended complaint pleaded facts in support of their claims. And appropriate 

deference should be given to a district court’s decision on a motion to dismiss. Cooney v. 

Casady, 735 F.3d 514, 522 (7th Cir. 2013). Moreover, a plaintiff “should not be faulted for 

proceeding with her case once she was given the chance to do so with the denial of the motion to 

dismiss.” Id.

 3 See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009); accord Bell v. Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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Deference to this Court denial of Defendants’ motion to dismiss could result in an 

inference that Plaintiffs’ factual allegations in their amended complaint show sufficient precomplaint investigation into those facts. Any such inference, however, would not be 

determinative in a Rule 11 sanctions analysis, which requires consideration of the totality of the 

circumstances when evaluating whether a plaintiff engaged in reasonable inquiry into the facts 

before filing claims. See Cooter & Gell, 496 U.S. at 401; Smart Options, LLC, 2013 WL 

500861, at *3. Moreover, the Iqbal and Twombly plausibility standard assumes the veracity of a 

plaintiff’s factual allegations in a complaint without requiring any verification that Plaintiff can 

support those same allegations.

Therefore, this Court’s order denying Defendants’ motion to dismiss is not dispositive to

whether Plaintiffs’ pre-complaint investigation was reasonable. Accordingly, the Court now 

turns to the parties’ arguments regarding the reasonableness of Plaintiff’s pre-complaint inquiry.

2. Reasonableness of Plaintiffs’ Pre-Complaint Inquiry into Facts in

Support of Their Legal Claims

In briefing Defendants’ motion for sanctions, neither party has met their burden 

convincingly. Both Plaintiffs and Defendants ask the Court to rule in their favor based on 

dueling inferences supported by limited underlying evidence and conclusory statements about 

Plaintiffs’ pre-complaint investigation.

a. Defendants’ Prima Facie Showing of Sanctionable Conduct

Defendants’ only burden here is to make a prima facie showing of Rule 11 sanctionable 

conduct by filing a motion for sanctions based on non-frivolous allegations. See Vandeventer, 

893 F. Supp. at 840. Defendants allege sanctionable misconduct against Plaintiffs citing only to 

Plaintiffs’ discovery responses. Defendants suggest that their discovery requests sought 

“foundational information” from Plaintiffs that they should have had in hand before filing their 
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complaint. As such, Defendants view Plaintiffs’ objections to the discovery requests and their

professed inability to respond until after receiving discovery responses from Defendants as an 

admission that Plaintiffs did not undertake a reasonable pre-complaint investigation in violation 

of Rule 11(b). With nothing more, however, Defendants’ allegations seem frivolous. 

Fed. R. Civ. P. 8(a)(2) only requires that pleadings include “a short and plain statement of 

the claim showing that the pleader is entitled to relief.” Litigation necessarily involves 

discovery, as governed by Rule 26 through 37, largely because plaintiffs cannot be expected to 

have access to or an ability to find all the relevant facts before filing a complaint. Litigants 

commonly supplement their discovery responses after reviewing discovery received from an 

opposing party. Therefore, Defendants’ conclusion that Plaintiffs’ pre-complaint investigation 

was unreasonable based solely on Plaintiffs’ common discovery response is an unjustified logical 

leap. Such a leap also implies that Defendants did not consider the breadth of facts Plaintiffs did 

actually incorporate into their amended complaint. 

In a footnote, Defendants also assert with confidence, but no factual or legal support, that 

their discovery responses to Plaintiffs have established that the marks at issue in this case have 

not been used such that Plaintiffs’ trademark infringement and unfair competition claims are now 

“patently frivolous.” [DE 63 at 9 n.4]. Defendants then seem to want the Court to extrapolate 

from their unsupported conclusion on the merits of this case that Plaintiffs’ refusal to dismiss 

those claims is evidence of Rule 11 sanctionable conduct. Similarly, Defendants argue that 

Plaintiffs’ production of FIT’s incorporation documents does not establish use of the mark in 

commerce making Plaintiffs’ refusal to dismiss the infringement and unfair competition claims 

sanctionable conduct showing lack of reasonable pre-complaint inquiry.
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Once again, this is a quite a stretch to make at this early stage of litigation before 

discovery has closed, before any motions for summary judgment have been filed or considered, 

and before trial. Even assuming for the sake of argument that Defendants’ confidence is 

justified, Defendants have more persuasively suggested that Plaintiffs’ claims may lack 

substantive merit than they have shown that Plaintiffs’ pre-complaint inquiry into their claims 

was unreasonable under Rule 11 standards. As a result, the Court finds Defendants’ allegations 

of Rule 11 sanctionable misconduct to be unreasonable, and therefore, frivolous making them

insufficient to establish a prima facie case of sanctionable conduct.

b. Plaintiffs’ Evidence of Reasonable Pre-Complaint Inquiry

Even if the Court could find that Defendants’ met their burden to make a prima facie case 

of sanctionable conduct in their instant motion, Plaintiffs have not satisfied their burden to show 

that they made a reasonable pre-complaint inquiry into its claim. See Digeo, Inc., 505 F.3d at 

1368. Defendants correctly note that Plaintiffs responded to Defendants’ instant motion with no 

facts about the process they used to investigate their claims before filing the complaint. Instead, 

Plaintiffs ask the Court to infer a reasonable inquiry from the detailed facts incorporated into 

their amended complaint, the three contracts attached to their amended complaint, and the 

content of their Rule 26(a)(1) initial disclosures, which disclosed the identity of ten witnesses on 

specified subject matters, quantified damages for each claim, and delivered relevant business 

records, emails, transaction documents and correspondence.

Yet the key to the Rule 11(b) analysis here is whether Plaintiffs engaged in a reasonable 

pre-filing inquiry. See City of Livonia Emps.’ Ret. Sys. & Local 295/Local 851, 711 F.3d at 762. 

Therefore, any investigation after Plaintiffs filed their complaint is irrelevant to the analysis.
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To infer reasonable inquiry as Plaintiffs ask would be just as intellectually dishonest as it 

would have been for the Court to infer the lack of reasonable inquiry Defendants have argued 

exists. Pleadings on their own say nothing about a party’s pre-filing investigation. Initial 

disclosures say even less because nothing guarantees that the initial disclosures only include 

evidence gathered before the filing of the complaint. Indeed, nothing prevents parties from 

continuing to investigate their claims after filing their complaint but before the formal start of 

discovery when initial disclosures are typically served. Moreover, Plaintiffs did not serve their 

initial disclosures on Defendants in this case until August 15, 2016, more than two years after the 

action was initiated in state court and more than one year after Plaintiffs filed their amended 

complaint in this Court. With nothing in the record describing Plaintiffs’ pre-filing investigation, 

the Court simply cannot infer anything from the pleadings or initial disclosures.

Therefore, neither Defendants nor Plaintiffs have met their burdens. The record includes 

no facts related to Plaintiffs’ pre-complaint investigation into their claims. The parties’ dueling 

inferences both fail to present even a logical bridge to any conclusion about Plaintiffs’ 

reasonable inquiry or lack thereof. 

3. Apparent Ongoing Discovery Matters

The parties’ briefs, however, do suggest that discovery disputes may indeed exist. 

Without more thorough arguments, the Court refuses to issue any order regarding the disputes. 

Nevertheless, the Court reminds the parties of their obligations under the Federal Rules of Civil 

Procedure. The Rules require full, complete, and timely responses to discovery requests. See 

Fed. R. Civ. P. 33(b), 34(2), 36(3)–(6). Nothing in the Rules allows a party to withhold 

responsive discovery until the time of its choice. Withholding responsive information negates 

the open nature of litigation envisioned by the Federal Rules of Civil Procedure, slows the flow 
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of litigation, and fosters more motion practice, which increases costs to the parties themselves 

and to this Court. In other words, withholding responsive information violates the call of Fed. R. 

Civ. P. 1 to construe, administer, and employ the Rules “to secure the just, speedy, and 

inexpensive determination of every action and proceeding.”

Yet not all responsive information surfaces at the exact time a discovery request is 

served. Indeed, a party cannot produce information they do not possess. Therefore, the Rules 

provide for supplementation of discovery responses as they arise in the normal course of 

discovery. See Fed. R. Civ. P. 26(e). In fact, this Court has explicitly ordered 

“[s]upplementation under Rule 26(e) due every six weeks until trial.” [DE 47 at 2]. 

With these guiding principles in mind, the parties are advised that withholding responsive 

information will not be tolerated and timely supplementation must continue throughout litigation. 

To ensure that both parties’ discovery responses are as complete as possible at this time, the 

Court ORDERS all parties to serve an additional round of supplemental discovery responses by 

November 6, 2017. The producing party should also provide written notice to the request party 

by the same date should no additional responsive information be possessed. Supplementation 

under Rule 26(e) shall then continue every six weeks until trial.

B. Other Grounds for Sanctions

“Any attorney . . . 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.” 28 U.S.C. § 1927. “Section 1927 

applies to cases marked by a litigant’s bad faith, which is shown when ‘counsel acted recklessly, 

counsel raised baseless claims despite notice of the frivolous nature of these claims, or counsel 

otherwise showed indifference to statutes, rules, or court orders.’” Prenda Law, Inc. v. Godfread, 
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No. 13-CV-4341, 2014 WL 2699817, at *2 (N.D. Ill. June 12, 2014) (quoting Grochocinski v. 

Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 799 (7th Cir. 2013) (citations and internal 

quotations omitted)). “If a lawyer pursues a path that a reasonably careful attorney would have 

known, after appropriate inquiry, to be unsound, the conduct is objectively unreasonable and 

vexatious.” Riddle & Assocs. P.C. v. Kelly, 414 F.3d 832, 835 (7th Cir. 2005) (quoting Kapco 

Mfg. Co., Inc. v. C & O Enters., Inc., 886 F.2d 1485, 1491 (7th Cir. 1989)). Under Section 

1927’s objective standard, reckless indifference to the law will support sanctions. Dal Pozzo v. 

Basic Mach. Co., 463 F.3d 609, 614 (7th Cir. 2006). Courts may also invoke their inherent 

authority and sanction parties that “willfully abuse[] the judicial process or otherwise conduct[] 

litigation in bad faith.” Prenda Law, 2014 WL 2699817, at *2 (quoting Tucker v. Williams, 682 

F.3d 654, 662 (7th Cir. 2012)).

For the same reasons discussed above, Defendants have not established that Plaintiffs 

were even recklessly indifferent to the law in their pre-complaint investigation of their claims. 

The record includes nothing to persuade the Court that Plaintiffs have willfully abused the 

judicial process or have exhibited any bad faith in the litigation of this case. Therefore, neither 

Section 1927 nor the Court’s inherent authority provide the grounds to sanction Plaintiffs at this 

time on this matter.

III. CONCLUSION

As discussed above, both Defendants and Plaintiffs have failed to meet their burden 

under Fed. R. Civ. P. 11(b) for sanctions related to Plaintiffs’ pre-complaint investigation into its 

complaints. Moreover, Defendants have not established the objective bad faith necessary to 

justify sanctions under 28 U.S.C. § 1927. Furthermore, Defendants have not established any

willful abuse of the judicial process or bad faith litigation by Plaintiffs to warrant sanctions by 
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invocation of this Court’s inherent authority. Therefore, the Court DENIES Defendants’ 

motion. [DE 60]. To minimize the effects of the parties’ apparent discovery disputes, the Court 

also ORDERS all parties to serve an additional round of supplemental discovery responses by 

November 6, 2017. The producing party should also provide written notice to the requesting 

party by the same date should no additional responsive information be possessed. 

Supplementation under Fed. R. Civ. P. 26(e) shall then continue every six weeks until trial.

SO ORDERED.

Dated this 30th day of October 2017.

s/Michael G. Gotsch, Sr.

Michael G. Gotsch, Sr.

United States Magistrate Judge