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Fired BigLaw paralegal must pay $35K sanction in dropped suit against law firm, 7th Circuit says

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On Friday, a federal appeals court upheld a sanction requiring a paralegal who filed a $200 million bias suit against Baker McKenzie to pay the law firm’s attorney fees.

The 7th U.S. Circuit Court of Appeals at Chicago upheld an order requiring the paralegal, Elena Stephens, to pay about $35,000.

In a per curiam opinion, a 7th Circuit panel said Stephens could be sanctioned for dismissing the lawsuit to avoid answering discovery questions on two matters.

One matter concerned how Stephens acquired the law firm’s confidential email discussion list of firm employees that she used to email criticism of her supervisors. The other asked Stephens to account for her asserted damages.

Stephens had alleged that she was sexually harassed and mocked because of her Russian heritage and accent during the year she worked at the law firm. Stephens said she was fired in 2017 after she reported the discrimination.

The federal trial judge, Rebecca Pallmeyer, had told Stephens that she should explain how she acquired the email discussion list or should surrender her computer so the law firm could investigate.

Pallmeyer had also given Stephens two choices on the damages issue. She could supply records about therapy she sought after the alleged harassment, or she could reduce her damages demand to less than $100,000.

Stephens didn’t supply the records, but she nonetheless increased her demand for damages.

During a court hearing before the trial judge, Stephens said she didn’t have information about emails sent from her Baker McKenzie account. On the damages issue, Stephens said Baker McKenzie had $2 billion in revenues, and a large damages award was needed so it could “feel the pain for wrongdoing.”

Stephens decided to withdraw her case because she didn’t want Baker McKenzie to have access to her computer.

On appeal, the 7th Circuit said the Federal Rules of Civil Procedure generally require litigants who disobey discovery orders to pay reasonable expenses, including attorney fees. The attorney fee sanction “was not unreasonable or unjust,” the appeals court said.

The appellate panel consisted of Judges Michael Kanne, David Hamilton and Amy Barrett.

Hat tip to Law360.

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