                        NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1



                United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                                Argued January 26, 2016
                                Decided March 21, 2016

                                         Before

                          DIANE P. WOOD, Chief Judge

                          WILLIAM J. BAUER, Circuit Judge

                          RICHARD A. POSNER, Circuit Judge
No. 15-2184

VEERASIKKU BOMMIASAMY and                         Appeal from the United States District
V. BOMMIASAMY, M.D., S.C.,                        Court for the Northern District of
     Plaintiffs-Appellants,                       Illinois, Eastern Division.

      v.                                          No. 12 C 7314

RAKESH PARIKH,                                    Rebecca R. Pallmeyer
    Defendant-Appellee.                           Judge.


                                        ORDER

       This appeal concerns a district court’s decision to deny sanctions under 28 U.S.C.
§ 1927, the statute that authorizes fees to be imposed on lawyers who “unreasonably and
vexatiously” multiply proceedings. The underlying dispute arises out of the efforts of
Dr. Veerasikku Bommiasamy (and his medical practice V. Bommiasamy, M.D., S.C.) to
enforce a promissory note and stock sale allegedly executed by Dr. Rakesh Parikh. More
than a year after Bommiasamy filed suit, the district court discovered a jurisdictional
problem: Parikh had permanently relocated from Indiana to Illinois, the state of
Bommiasamy’s citizenship, before the suit was filed, and thus diversity of citizenship
was lacking. The district court accordingly dismissed the action for lack of subject-matter
jurisdiction. At that point Bommiasamy sought sanctions based on the failure of Parikh’s
No. 15-2184                                                                           Page 2

counsel to notify the court promptly of his client’s non-diverse citizenship. The court
concluded that defense counsel’s oversight was disappointing, but not sanctionable. We
conclude that it did not abuse its discretion in so ruling.

       A look at the lawsuit between the parties provides useful context for the district
court’s decision. In 2004, Bommiasamy, along with two other men, agreed to sell the
stock of a medical laboratory corporation (since dissolved) they owned, HealthCare
Labs, Inc., to Parikh in exchange for a yearly percentage of the company’s collections
over the next three years, a lump sum, and debt payment. Four days after signing the
stock-purchase agreement, Parikh executed and delivered the promissory note, in which
he promised to pay Bommiasamy $180,000 in sixty monthly installments of $3,000.
Parikh never paid, Bommiasamy says, and from 2005 to 2011 the parties pursued the
breach-of-contract action in state court.

       In 2011 Bommisasamy’s lawyer moved to withdraw on the grounds that his
relationship with Bommiasamy had broken down and Bommiasamy had retained other
counsel, William Kohn. (Kohn continues to represent Bommiasamy in this appeal.)
Because the trial date was looming, the court denied the motion. Counsel soon had the
case voluntarily dismissed, over Kohn’s objection; Kohn purported to be participating as
Bommiasamy’s “non-record counsel.” Bommiasamy then retained Kohn as counsel and
sought unsuccessfully to vacate the voluntary dismissal. When that request was denied,
Bommiasamy appealed.

       Bommiasamy meanwhile filed this suit in federal court, reasserting his
breach-of-contract claims and invoking diversity jurisdiction, see 28 U.S.C. § 1332. He
asserted that the amount in controversy exceeded $75,000, that he and his corporation
were Illinois citizens, and that Parikh “is upon information and belief a citizen and
resident of Ft. Wayne, Indiana.” Parikh moved to dismiss the case as barred by res
judicata; he took the position that the prior state-court litigation had resolved the matter.
The district court denied the motion as premature and ordered Parikh to answer the
complaint. In answering the complaint, Parikh admitted the jurisdictional allegation.

        Three weeks later, Parikh moved to dismiss the complaint for lack of
subject-matter jurisdiction, asserting for the first time that he was in fact a citizen of
Illinois, not Indiana as alleged in the complaint. Parikh attached to his motion to dismiss
an affidavit swearing that in August 2007 he had moved with his family from Illinois to
Indiana, where he practiced medicine until October 2010. For most of the next two years,
he practiced medicine in Texas but frequently returned to Indiana, where his family
No. 15-2184                                                                            Page 3

remained while his son finished high school. But in June 2012 his family moved back to
their home in Illinois, where he was domiciled when Bommiasamy filed this suit three
months later.

        Bommiasamy ultimately conceded that he could not establish diversity
jurisdiction and moved under 28 U.S.C. § 1927 for sanctions based on Parikh’s
“unreasonabl[e] fail[ure] to timely raise his diversity jurisdiction defense.” He peppered
his motion with charges of both “gamesmanship”—arguing that Parikh’s attorneys
previously knew about Parikh’s Illinois citizenship but intentionally delayed disclosing
it—and deception, in that Parikh answered the complaint “in a way that appeared
calculated to fudge the jurisdictional issue.” And even if Parikh’s counsel did not know
about Parikh’s move, Bommiasamy continued, sanctions were warranted because it was
“not … objectively reasonable” for counsel to fail to ascertain Parikh’s citizenship before
“initiating a year’s worth of non-meritorious, non-jurisdictional motion practice.”

       Parikh’s attorneys opposed the § 1927 motion. They denied that they were aware
that Parikh had returned to Illinois, let alone that they had any incentive to prolong
vexatiously and unreasonably any proceedings for which jurisdiction was lacking. They
maintained that they discussed the jurisdictional allegations with Parikh upon receiving
the complaint and speculated that Parikh may not have understood the legal
consequences of his move—“likely the result of language barriers.” One of Parikh’s
attorneys swore that he first noticed the issue when reviewing the draft answer and that
he instructed Parikh’s other attorney not to admit diversity jurisdiction and to keep
investigating. Parikh’s other attorney swore that he changed the answer so that Indiana
citizenship was not admitted, but that he inadvertently left unchanged the admission of
diversity jurisdiction. At no time did they act unreasonably or in bad faith, both lawyers
insisted, and even if their conduct “at worst” was negligent, negligence is not a proper
basis on which to award sanctions under § 1927.

       The district court denied the motion for sanctions. It expressed disappointment
with counsel’s failure to discover Parikh’s citizenship sooner, but concluded that counsel
did not act unreasonably or seriously disregard the judicial process:

       Defense counsel’s failure to ascertain these details earlier is disappointing
       for obvious reasons. This court devoted substantial attention to a confusing
       record to resolve the res judicata dispute—a matter of state law.
       …
No. 15-2184                                                                              Page 4

       An award of sanctions under 28 U.S.C. § 1927 is “proper if the attorney ‘has
       acted in an objectively unreasonable manner by engaging in a serious and
       studied disregard for the orderly process of justice[,] or where a claim is
       without a plausible legal or factual basis and lacking in justification.’”
       Lightspeed Media Corp. v. Smith, 761 F.3d 699, 708 (7th Cir. 2014) (quoting
       Walter v. Florenzo, 840 F.2d 427, 433 (7th Cir. 1988)) (alterations removed).
       The court sees no “serious and studied disregard” in this record. Dr.
       Parikh’s attorneys represented him for years in the state court litigation; it
       is undisputed that he was domiciled in Indiana at that time. In this era of
       electronic communication, it is not surprising that counsel’s attention was
       not drawn to Dr. Parikh’s return to Illinois. Plaintiff’s counsel suspects his
       opponents of knowing all along that Dr. Parikh had moved back to Illinois
       in June 2012, but there is no evidence that establishes this, nor any obvious
       incentive for counsel to conceal an argument for dismissal of the
       complaint.

       … While the court’s time could have been better spent on cases properly
       before it, it appears that the parties themselves would have engaged in
       motion practice on this issue regardless where the complaint was filed. In
       short, defense counsel’s failure to blow the whistle on this litigation earlier
       may well not be genuinely costly to Plaintiff.

       On appeal Bommiasamy argues that the district court made a legal error in this
ruling by using the wrong standard to evaluate his claim. He contends that it applied a
more stringent “serious and studied disregard” standard, rather than one based on
“recklessness or extreme negligence” or “pursuing a path that a reasonably careful
attorney would avoid.”

        We reject this argument. The district court may not have used the exact words
Bommiasamy would prefer, but it correctly looked for objectively unreasonable actions
and bad faith. See Micrometl Corp. v. Tranzact Techs., Inc., 656 F.3d 467, 472 (7th Cir. 2011);
Jolly Grp., Ltd. v. Medline Indus., Inc., 435 F.3d 717, 720 (7th Cir. 2006); Dal Pozzo v. Basic
Mach. Co., 463 F.3d 609, 614 (7th Cir. 2006); see also Star Mark Mgmt., Inc. v. Koon Chun
Hing Kee Soy & Sauce Factory, Ltd., 682 F.3d 170, 178 (2d Cir. 2012); Peer v. Lewis, 606 F.3d
1306, 1314 (11th Cir. 2010).

        Bommiasamy argues in the alternative that the court unreasonably evaluated the
facts. It downplayed Parikh’s counsel’s year-long delay after the complaint’s filing to
No. 15-2184                                                                          Page 5

confirm the court’s subject-matter jurisdiction, he complains. But the district court was
well aware of both the duration of the delay and defense counsel’s explanation, and it
found nothing “objectively unreasonable” in counsel’s conduct. As the court explained,
counsel had represented Parikh “for years” in state-court litigation while he was
domiciled in Indiana, and no evidence established that counsel knew that Parikh had
moved back to Illinois or that counsel had any incentive to conceal such knowledge. We
note as well that § 1927 is a permissive statute, and so the district court was not required
to impose sanctions even if it had found evidence of objective or subjective bad faith.
See Corley v. Rosewood Care Ctr., Inc. of Peoria, 388 F.3d 990, 1014 (7th Cir. 2004).

       Accordingly, we AFFIRM the denial of sanctions.
