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Lord v. High Voltage Software, Inc.

United States District Court, N.D. Illinois, Eastern Division

March 30, 2017

RYAN LORD, Plaintiff,
v.
HIGH VOLTAGE SOFTWARE, INC. Defendant.

          MEMORANDUM OPINION AND ORDER

          John J. Tharp, Jr., United States District Judge

         Upon winning its motion for summary judgment, Defendant High Voltage Software moved for sanctions and attorney's fees pursuant to Rule 11, Rule 54(d), 28 U.S.C. § 1927, and 42 U.S.C. § 2000e-5(k) and § 12205(b). It argues that Plaintiff Ryan Lord's claims never had any basis in fact or law (despite a Seventh Circuit opinion dissenting from the grant of summary judgment on one of the counts) and thus were frivolous. The Court disagrees as to the Title VII claims, but grants the motion for sanctions as to the ADA retaliation claim.

         BACKGROUND

         This case has been heavily litigated over the last seven and a half years. Intrigued readers can consult the previous opinions, [1] but this Court discusses only the facts necessary to resolve the present motions. Plaintiff Ryan Lord was an associate producer at Defendant High Voltage Software (“HVS”) when he was the subject of some harassment from his coworkers. This harassment included teasing that he was attracted to a female coworker as well as at least four instances in which he was touched on his buttocks or in between his legs by a male coworker in a short period of time. See Lord v. High Voltage Software, Inc., 2013 WL 6009246, at *1. Lord first complained to a human resources manager that he was being sexually harassed by the teasing; she responded that the conduct did not amount to sexual harassment but directed Lord to report any further incidents of harassment “immediately.” The unwanted touching occurred about a month later, but Lord did not report it immediately. Two days after he did report the further harassment, Lord had a heated exchange with a supervisor about an unrelated incident and was fired. Lord v. High Voltage Software, Inc., 839 F.3d at 560-61. Lord then filed a complaint with the EEOC and received a right to sue letter. Id. at 561.

         Lord originally filed this lawsuit in July 2009, when he sued HVS claiming sex discrimination, disability discrimination, retaliation under Title VII and the Americans with Disabilities Act (“ADA”), state law retaliatory discharge, and violation of the Illinois Human Rights Act. See Compl., ECF No. 1. HVS moved to dismiss, and Lord in response filed an amended complaint, which dropped the two state law claims and set out the two retaliation claims separately. After HVS sent a Rule 11 letter warning that the ADA retaliation claim was legally deficient (but before it filed any sort of motion to dismiss the amended complaint), Lord filed a second amended complaint, which included the same claims but clarified a few facts, including the relationship between his claimed disability and his discharge. HVS again moved to dismiss the complaint in its entirety.

         Judge Zagel, to whom this case was originally assigned, [2] granted HVS's renewed motion to dismiss in part, dismissing the ADA discrimination claim but leaving the ADA retaliation claim and both Title VII claims. See Lord v. High Voltage Software, Inc., 2010 WL 1229428, at *3-4. Among other arguments, HVS contended in its motion to dismiss that Lord's allegations regarding why he was fired in the second amended complaint were inconsistent with his allegations in the first two complaints. Judge Zagel found, however, that the second amended complaint operated to withdraw the prior complaints, and that regardless the inconsistency was “not dispositive” of the ADA retaliation claim. Id.

         The case then proceeded through discovery, which was quite lengthy. Both sides filed motions to compel with varying success (one was dropped, another was granted in part, another was denied). See ECF No. 67, 75, 80. Eventually, HVS filed for summary judgment on all claims while Lord filed for partial summary judgment on his Title VII claims. At some point during the run up to, or during the briefing of, the motions for summary judgment, HVS and Lord's counsel seemed to reach an agreement that the ADA retaliation claim was not meritorious. See Def.'s Ex. 8, ECF No. 128-8. Lord did not file anything formally withdrawing the claim, but did not argue the claim during the summary judgment briefing. After noting that the ADA retaliation claim was “barely addressed within the voluminous briefing, ” Judge Zagel granted summary judgment to HVS on that claim. Lord v. High Voltage Software, Inc., 2013 WL 6009246, at *6. Lord did not argue the ADA decision was erroneous when the case was on appeal in the Seventh Circuit, which mentions the ADA claims only in the context of the contents of the initial complaint. See Lord v. High Voltage Software, Inc., 839 F.3d 556 at 561.

         The district court granted summary judgment for HVS on both Title VII claims. On appeal, the Seventh Circuit affirmed, although Judge Rovner dissented regarding the Title VII retaliation claim. Judge Rovner argued that Lord had presented sufficient facts to survive summary judgment because the parties agreed that he was terminated “based on his report of the harassment to his employer.” Id. at 566 (Rovner, J., dissenting).

         DISCUSSION

         Currently before the Court are HVS's motions for sanctions and attorney's fees. Although it brings its claims under five different rules and statutes, [3] the core of all the claims is essentially similar: whether the plaintiff pursued a frivolous claim. See Fred A. Smith Lumber Co. v. Edidin, 845 F.2d 750, 752 (7th Cir. 1988) (“the most important purpose of Rule 11 sanctions is to deter frivolous litigation and the abusive practices of attorneys”), Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412, 421 (1978) (attorney's fees may be awarded under civil rights statutes pursuant to Rule 54(d) “upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith”); Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 799 (7th Cir. 2013) (“Sanctions against counsel under 28 U.S.C. § 1927 are appropriate when ‘counsel acted recklessly, counsel raised baseless claims despite notice of the frivolous nature of these claims, or counsel otherwise showed indifference to statutes, rules, or court orders.'”). Here, although Plaintiff's counsel should have addressed more forthrightly the weaknesses of Lord's Title VII claims, the court does not find those claims to have been frivolous. The ADA retaliation claim, however, appears to never have had any factual basis and was, for that reason, frivolous.

         A. Title VII Claims

         HVS argues first that Lord's claims were legally and factually unsound. An attorney may not advance a claim that “is unwarranted by existing law or has no reasonable basis in fact.” Fabriko Acquisition Corp. v. Prokos, 536 F.3d 605, 610 (7th Cir. 2008). Rule 11 clarifies that a legal argument is allowed if it is “warranted by existing law” or presents a “nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” Fed.R.Civ.P. 11(b)(2). Lawyers are expected to make reasonable inquiries into governing law and make a reasonable inquiry into the facts. See Raymond Prof'l Group v. William A. Pope Co. (In re Raymond Prof'l Group, Inc.), 420 B.R. 420, 462 (Bankr. N.D.Ill. 2009). “If a competent attorney would find no basis for a legal argument, then it does not interfere with zealous advocacy to penalize the repetitious assertion of that argument.” In re TCI, Ltd., 769 F.2d 441, 447 (7th Cir. 1985).

         Initially, HVS argues that Lord failed to acknowledge controlling law because the Supreme Court has said that “simple teasing or roughhousing among members of the same sex” is not cognizable under Title VII. See Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 82 (1998). That reading, however, ignores the context in which that phrase is used:

The real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed. Common sense, and an appropriate sensitivity to social context, will enable courts and juries to distinguish between simple teasing or roughhousing among members of the same sex, ...

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