In Rents v. Dynasty Apparel Indus., 2009 U.S. App. LEXIS 2623 (6th Cir. Feb. 11, 2009), the court found that there was no factual basis for the claims asserted against certain defendants (the Warfield Defendants). The plaintiff was not sanctioned because he did not distort the facts and was not blamed for his lawyers’ pursuit of mixed claims of law and fact that lacked merit. His lawyers were sanctioned, but not their law firm. There was more than a seven year delay between the making of the sanctions motion in 1999 and the decision of the district court in 2007:

[Vicarious Law Firm Liability.] The Warfield Defendants argue that the district court erred in failing to hold the law firm Cornyn, Leonard & Hughes ("CL&H") jointly responsible under Rule 11 for the sanctionable conduct of Leonard and Roach. Rule 11(c)(1) 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). *** The advisory committee notes to the 1993 amendments explain that "it is appropriate that the law firm ordinarily be viewed as jointly responsible [for its attorney's Rule 11 violations] under established principles of agency." … However, neither the text of the rule nor the advisory committee notes shed light on what constitutes "exceptional circumstances." The Warfield Defendants contend that the district court's finding of exceptional circumstances as to CL&H amounted to an abuse of discretion. We disagree.

In April 1997, both Leonard and Roach began to practice law with Christopher Cornyn ("Cornyn") and began receiving paychecks from the law firm Cornyn, Leonard and Hughes ("CL&H"). At that time, Rentz's suit had been pending for around nine months. Approximately two months later, on June 5, 1997, Leonard filed the amended complaint for which he was later sanctioned. Leonard left CL&H later that year, in December 2007, after a dispute with Cornyn, but Roach stayed on to practice in Cornyn's firm, which was then called Cornyn, Roach & Hughes. Although Leonard testified that he had only minimal involvement with the case after leaving CL&H, both Leonard and Roach remained counsel of record on the district court docket until February 1999, when Leonard was replaced as trial counsel by Cornyn.

The district court declined to sanction CL&H under Rule 11 because it found that, even assuming that Leonard and Roach were acting as agents for the firm, the case "remained first and foremost the responsibility of Leonard and to a lesser extent that of Roach," and "[t]here was no evidence that Cornyn or Hughes was involved in the drafting or filing of [the amended complaint]." …. The court added that "Leonard affixed only his name to the Amended Complaint, rather than identifying himself as part of Cornyn, Leonard and Hughes." ... The Warfield Defendants counter that Leonard and Roach were employees of CL&H when the amended complaint was filed and that Cornyn should be held responsible for failing adequately to supervise the case. They contend that "Cornyn allowed the resources of his law firm as wielded by Leonard and Roach to inflict harm and damage upon [the Warfield Defendants] without any attempt to manage or correct their improper conduct." ….

The district court did not abuse its discretion by declining to hold the law firm CL&H jointly responsible for the misconduct of Leonard and Roach. First, there is no evidence that Cornyn had any contact with the Rentz case or was involved in either a supervisory or managerial capacity until Cornyn replaced Leonard as counsel of record in February 1999, well after the sanctionable conduct occurred. Instead, there was a general understanding among the three attorneys that Roach and Leonard would continue to maintain sole responsibility for the Rentz case when they joined Cornyn and Hughes to form CL&H. Cornyn stated that when Roach and Leonard joined CL&H in early 1997 "[i]t was fairly clear in everyone's understanding that, since it was ongoing litigation, that was their case and they would handle that action independent of me." ... Consistent with this understanding, when Leonard filed the [sanctionable] amended complaint soon after joining CL&H, the certificate of service did not identify him as a member of CL&H.... Indeed, the only evident connection that Cornyn or CL&H had with the Rentz case at the time of the sanctionable conduct was the appearance of the firm's name on the letterhead of correspondence involving the Rentz case. In sum, the record makes clear that the Rentz case was solely the responsibility of Leonard and Roach during the relevant period, that Cornyn had no involvement with the case until well after the sanctionable conduct had occurred, and that the three attorneys had an understanding that when Leonard and Roach joined Cornyn they would handle the Rentz case independent of Cornyn. Given the tenuous connection between the law firm CL&H and the Rentz case at the time of the sanctionable conduct, we cannot say that the district court abused its discretion by refusing to sanction CL&H.

***

[Honest Plaintiff Not Sanctioned for Lawyers’ Misguided Pursuit of Mixed Claims of Law and Fact.] Nothing in the record suggests that [the plaintiff] Rentz made any false factual allegations during the course of this litigation. It is undisputed that Rentz's deposition testimony was accurate and truthful, though contrary to the claims doggedly pursued by his counsel against the Warfield Defendants. Rentz was consistently forthcoming with his attorneys and opposing counsel and provided accurate information about his relationship and discussions with Warfield. If Rentz's attorneys characterized Warfield's statements as constituting a promise, or creating a contract, it was not unreasonable for Rentz, who lacked any legal training, to trust this professional judgment. Further, the unfounded contentions at issue here were not entirely factual, but rather mixed questions of fact and law for which a non-lawyer such as Rentz should not be held responsible. ***

[Interest on Sanctions Award.] Finally, we turn to the Warfield Defendants' argument that the sanctions award should also include interest accrued from the time that entitlement to sanctions was determined by the district court in February 1999. As the Warfield Defendants point out, two other circuits have held that a court may include a "delay factor" as part of a sanctions award in order to account for the opportunity cost of money that could have been allocated to other purposes but instead went to pay attorney fees to defend against frivolous claims. See FDIC v. Maxxam, Inc., 523 F.3d 566, 596 & n.170 (5th Cir. 2008); Brandt, 960 F.2d at 651-52. We note, however, that the Warfield Defendants failed to raise the potential application of a "delay factor" in the district court. To be sure, the Warfield Defendants had no reason in 1999 to expect that it would take the district court more than seven years finally to rule on the amount of sanctions and to determine which litigants to sanction. Nonetheless, it should have been clear even in 1999 that there would be some delay between the district court's ruling that sanctions were warranted (in February 1999) and its final determination of the nature of those sanctions, given that the district court's February 1999 ruling was followed by a hearing on sanctions in October 1999 and then several months of post-hearing briefing. We have observed that "[o]ur function is to review the case presented to the district court, rather than a better case fashioned after a district court's unfavorable order." Barner v. Pilkington N. Am., Inc., 399 F.3d 745, 749 (6th Cir. 2005) (internal quotation marks omitted). Consequently, "'[i]t is well settled law that this court will not consider an error or issue which could have been raised below but was not.'" *** Because the Warfield Defendants did not raise before the district court the issue of whether a "delay factor" should be added to the amount of sanctions imposed, we decline to decide this issue here and do not add accrued interest to the sanctions awards.