7th Circuit Makes Paralegal Pay Big Law
Late last month, the United States Court of Appeals for the Seventh Circuit issued a decision, Stephens v. Baker & McKenzie, Nos. 18‐2375 & 18‐2963 (7th Cir. Apr. 26, 2019) affirming a district court ruling granting the defendant's motion for attorney's fees and its motion to strike a defamatory filing. Among other lessons that can be drawn from this decision, it shows how strictly the federal courts will enforce discovery obligations under Rule 37.
The appellant was employed as a paralegal with Baker & McKenzie. Her suit alleged that she was fired because reported being sexual harassed and mocked on the basis of her Russian ethnicity. She sought $200 million in compensatory, emotional and punitive damages.
Stephens failed to comply with two discovery requests. The first concerned information about how she gained access to the firm's confidential listserv (which she accessed after she left). The second asked that she account for the damages she demanded. Rather than answer either of these requests, Stephens asked the court to dismiss her suit, even though she was given the option to seek $100,000 in damages instead. The lower court, "ruled that whether Stephens had used a confidential listserv for personal reasons was relevant to Baker & McKenzie’s defense, so it ordered Stephens either to explain how she acquired the list or surrender her computer so the firm could investigate." Id. at 4. Stephens explained that she did not want Baker to have access to her computer.
The defamatory filing was Stephens' response to a motion to compel, which McKenzie never had a chance to reply to because the suit was dismissed. Baker was awarded more than $35,000 in fees. The Seventh Circuit rejected Stephens' appeal specifically because of her refusal to comply with the court's discovery order. It cited Federal Rule of Civil Procedure 37(b)(2)(C) which requires a party rejecting such an order to pay, "reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.”
The Seventh Circuit also rejected an appeal of the motion to strike, holding that the district court's broad discretion to strike filings allowed it to strike a filing the plaintiff abandoned and which the court never actually considered.
So even when a paralegal goes up against one of the biggest law firms in the country, she or he may still held accountable for failing to take discovery obligations seriously.