Yes, the seller can accept another offer any time before your acceptance is communicated back to the seller. Period. That's why it's important to respond to counter offers quickly if you're serious about wanting a particular property. Even if you have already signed to accept the seller's counter offer, that counter offer can be withdrawn by the seller at any time before your acceptance is communicated back to the seller.
A contract has two basic elements: offer and acceptance. The third thing required to form a contract is communication of the offeree's acceptance to the offeror (in your case the seller). If your acceptance hasn't yet been communicated back to the offeror (usually through the agents involved), no contract has yet been formed. Can you find an attorney who'll sue anyway? Most likely. Every town has at least a few unscrupulous attorneys who will accept cases even though the law isn't on their side.
On the other hand, I don't know the all of the details of your situation, so I can't say what other factors may be relevant in your case. And I am not an attorney, so I can't practice law by telling you that you don't have a case.
Sorry you're having problems with your purchase. Best of luck in the future.
Accredited Buyer Representative