From Vazquez v. Central States Joint Bd., 2009 U.S. Dist. LEXIS 16987 (N.D. Ill. Mar. 3, 2009):

[After-the-Fact Research.] ***Plaintiffs' newly developed argument in support of their previous position is irrelevant to the issue of sanctions. What matters is whether Plaintiffs made a non-frivolous argument in support of their position at the time they advanced that position — not whether they can find an argument in support of that position after the fact. See In re Ronco, Inc., 838 F.2d 212, 218 (7th Cir. 1988) ("the party against whom sanctions would be imposed must actually make the reasonable argument, not merely assert after-the-fact that a reasonable argument could have been made"); Terminix Intern. Co., L.P. v. Kay, 150 F.R.D. 532, 538 (E.D. Pa. 1993) ("it is irrelevant whether counsel can, in retrospect, and upon reflection or further research, distinguish the controlling authority or even make a good faith argument for an extension of the law"). At the time of Plaintiffs' response to the motion to dismiss, they cited to no relevant caselaw in support of their position. Furthermore, while Plaintiffs now claim to have been arguing for a modification of the law, they failed to make this argument in response to the motion to dismiss. Plaintiffs, if they sought to make such an argument then, were under the obligation to recognize existing Seventh Circuit precedent in arguing against it. See Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1082 (7th Cir. 1987) (arguments that "ignore rather than acknowledge the force of existing law ... cannot be called an effort to alter the law"). Because Plaintiffs advanced no non-frivolous arguments in support of their RICO claim but instead ignored relevant caselaw, sanctions are appropriate.

***

[Law Firm Vicarious Liability Rejected.] The parties dispute the liability of Robert Romero, the former law partner of Banks in the partnership of Romero & Banks. As an initial matter, 28 U.S.C. § 1927 provides for sanctions only against individual attorneys, not against firms. Plastech, 525 F.3d at 609. Thus, only Banks can be liable under § 1927. Rule 11 provides that "[a]bsent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee." Fed. R. Civ. P. 11(c)(1).

Banks and Romero argue that exceptional circumstances [within the meaning of Rule 11] exist in this case. They claim, and Defendants do not dispute, that Romero had no involvement whatsoever in this case. According to Banks' affidavit, the law firm of Romero & Banks was a partnership in name only, and the two lawyers essentially functioned as solo-practitioners. The firm was dissolved in February 2006, nine months before the SAC was filed. When Romero was served with the motion for sanctions in April 2007, he asked Banks to dismiss the case. Romero also sent Plaintiffs a letter within the Rule 11 twenty-one-day safe harbor period stating that he would dismiss the case if he had the ability to do so. Sanctions against Romero, in any form, are not appropriate in these circumstances.