Waeschle v. Dragovic, 2012 U.S. App. LEXIS 14501 (6th Cir. July 16, 2012):

B. Sanctions

Following Waeschle's appeal to this Court, Defendants filed a motion for sanctions under Federal Rule of Appellate Procedure 38 and 28 U.S.C. §§ 1912 and 1927, arguing that the appeal is frivolous. Section 1912 provides that, where a judgment is affirmed by a court of appeals, the court, in its discretion, may award the prevailing party "just damages for his delay, and single or double costs." Fed. R. App. P. 38 is similar, allowing a court of appeals to "award just damages and single or double costs to the appellee" in the event the court determines that an appeal is frivolous. This Court deems an appeal to be frivolous when "the appellant's arguments 'essentially had no reasonable expectation of altering the district court's judgment based on law or fact.'" Tareco Props, Inc. v. Morriss, 321 F.3d 545, 550 (6th Cir. 2003) (quoting Wilton Corp. v. Ashland Castings Corp., 188 F.3d 670, 677 (6th Cir. 1999)). The Court also has discretion, under 28 U.S.C. § 1927, to assess excess costs, expenses, and attorney fees directly against an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously." 28 U.S.C. § 1927. This standard is satisfied "when an attorney knows or reasonably should know that a claim pursued is frivolous." Tareco Props, Inc., 321 F.3d at 550 (quoting Jones v. Cont'l Corp., 789 F.2d 1225, 1230 (6th Cir. 1986)).

Based on this Court's decision in Albrecht, 617 F.3d 890, the current appeal, as argued by Waeschle, had no chance of success when filed. Accordingly, Waeschle, through counsel, pursued this appeal in the face of clear circuit precedent that rendered her arguments meritless. In her brief, Waeschle fails to acknowledge our decision in Albrecht — let alone to attempt to distinguish it from the facts of this case, an extremely troubling omission since Waeschle's counsel represented the appellants in Albrecht. Clearly, Waeschle was entitled to make a good-faith argument for a change in the law. In doing so, however, counsel, as officers of the court, were obligated to acknowledge that they were doing just that and to deal candidly with the obvious authority that is contrary to appellant's position. Because, at the time this appeal was filed, there was no clear requirement from this Court that he do so, we are hesitant to impose sanctions. Today's opinion shall serve as an admonition, however, that future failures to acknowledge clear precedent may result in the imposition of sanctions.