Lord et al
MEMORANDUM Opinion and Order: For the reasons discussed in the accompanying Memorandum Opinion and Order, Defendant's motion for sanctions 128 is granted in part and denied in part. Defendant's motion for attorney's fees 133 is den ied. Defendant shall submit its fee request and associated documentation, as described in the opinion, by April 14, 2017. Plaintiff may respond, if desired, by April 28, 2017. The Court will rule by CM/ECF notice. Signed by the Honorable John J. Tharp, Jr on 3/30/2017. Mailed notice(air, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
HIGH VOLTAGE SOFTWARE,
Judge John J. Tharp, Jr.
MEMORANDUM OPINION AND ORDER
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.
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
See Lord v. High Voltage Software, Inc., 839 F.3d 556 (7th Cir. 2016) (appeal and
dissent); Lord v. High Voltage Software, Inc., No. 09 C 4469, 2013 WL 6009246, at *1 (N.D. Ill.
Nov. 13, 2013) (summary judgment); Lord v. High Voltage Software, Inc., No. 09 CV 4469,
2010 WL 1229428, at *1 (N.D. Ill. Mar. 25, 2010) (motion to dismiss).
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
This case was transferred to this Court’s docket when the appellate process was
completed, as Judge Zagel had since taken senior status.
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).
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,
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
The claims are brought under Rule 11, Rule 54(d) as authorized in Title VII and the
ADA (42 U.S.C. § 2000e-5(k) and 12205(b)), and 28 U.S.C. § 1927.
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, and conduct which a reasonable person in the plaintiff's
position would find severely hostile or abusive.
Id. at 81-82. That is to say, whether or not specific conduct violates Title VII is a fact-specific
inquiry that examines the totality of the circumstances. Thus, a lawyer should not be sanctioned
for using discovery to investigate all the circumstances (which may themselves be susceptible to
multiple interpretations). Furthermore, the Court finds that Lord’s allegations of repeated sexual
harassment by a coworker are not so insufficient as to warrant sanctions merely because they
bear some resemblance to cases that were not successful. See Goldberg v. 401 N. Wabash
Venture LLC, No. 09 C 6455, 2013 WL 5376556, at *6 (N.D. Ill. Sept. 25, 2013) (“failing to
ultimately prevail does not equate to bad faith or mean that plaintiff's theory of liability was
HVS then argues that even if Oncale and its progeny did not completely foreclose
liability, Lord’s counsel should have known there was no factual basis because Lord failed to
satisfactorily answer a question in his deposition about how his treatment was related to his
gender. See Def.’s Mot. at 11, ECF No. 133. The Court thinks this more accurately reflects a
layman’s confusion about the connection between sexual harassment and gender. Even Ann
Hopkins, the plaintiff in the landmark sexual discrimination case of Price Waterhouse v.
Hopkins,4 did not “understand what happened to me” until a social scientist testified at trial and
connected Hopkins’ treatment to her gender. See GILLIAN THOMAS, BECAUSE OF SEX: ONE LAW,
FIFTY YEARS THAT CHANGED AMERICAN WOMEN’S LIVES
(2016). This is not a case in which a plaintiff knew a fact that would make him ineligible for
coverage under a statute and concealed it. See, e.g., Fernandez v. Galen Hosp. Illinois, Inc., No.
96 C 2578, 1997 WL 675042, at *4 (N.D. Ill. Oct. 28, 1997) (pursuing age discrimination claim
after comparator was revealed to be older than plaintiff). Lord and his attorney did not
misrepresent the facts of his claims, nor did those facts plainly preclude his claims, even if they
faced an uphill battle. See Lord, 839 F.3d at 562 (denying Lord’s sexual harassment claim
because conduct at issue “was not so explicit or patently indicative” of sexual intent as to
warrant inference that it was based on his gender) (emphasis added). Lord’s harassment claim
depended on the strength of that inference; he badly misjudged it, but his claim that sexual
horseplay by another male was directed to him because of his gender was not so farfetched as to
490 U.S. 228 (1989).
HVS originally also argued that the Title VII retaliation claim was frivolous. Given Judge
Rovner’s considered and thorough dissent arguing that the Title VII retaliation claim was
sufficient to go to trial, the Court finds the retaliation claim was not frivolous. Although it is
possible for a dissent to overlook a flaw so fatal that the claim could still merit sanctions, that is
not the case here. See Le Beau v. Libbey-Owens-Ford Co., 799 F.2d 1152, 1158 n.7 (7th Cir.
1986) (“We do not suggest, as the dissent assumes, that no suit that survives a motion for
summary judgment can ever be found frivolous.”). Judge Rovner’s dissent is hardly frivolous;
neither, then, is Lord’s Title VII retaliation claim.
B. ADA Claims
The same cannot be said for Lord’s ADA retaliation claim. HVS argues that the ADA
claims, particularly the retaliation claim, were not supported by any evidence and therefore were
frivolous. The Court agrees.
Initially, HVS relies on its argument that the second amended complaint contradicted the
previous complaint, and therefore is evidence that Lord’s counsel knew the claim was frivolous.
Judge Zagel effectively addressed this argument at the motion to dismiss stage, when he found
that the complaint stated a claim, even considering the inconsistency. Lord v. High Voltage
Software, Inc., 2010 WL 1229428, at *4. Furthermore, the Court in reviewing the complaints
notes that the retaliation claims were originally one count alleging both ADA and Title VII
discrimination. After the failure to allege retaliation on the basis of disability was pointed out to
Lord’s counsel, she filed a new complaint which split the retaliation claims but included the Title
VII sexual harassment language in both counts. The inclusion of Title VII language in the nowseparate ADA retaliation count appears to have been nothing more than a careless error caused
by overzealous use of copying and pasting language from elsewhere in the complaint. After
being alerted to this flaw, Lord’s counsel filed a second amended complaint, which made the
proper allegations regarding disability.
The contradictions in the complaint, however, are not the problem. The problem is
whether the ADA claim ever had any basis in fact. According to the sanctions motion, HVS was
required to spend an “extensive amount of time and effort” to understand “Plaintiff’s claimed
medical conditions and impairments.” Sanction Mot. ¶ 19, ECF No. 128. It appears, however,
that Lord never complained to HVS about disability discrimination or ill treatment because of
any disability. Neither in response to summary judgment nor in response to HVS’s motions for
sanctions and fees has Lord or his lawyer submitted any evidence suggesting there was a good
faith basis for asserting that Lord had been fired for conduct protected under the ADA.
The Court does not mean to suggest that Lord should have litigated the summary
judgment motion. Rather, Lord’s counsel should have made a pre-suit investigation into exactly
what Lord had told his supervisors and why he was terminated. In order to comply with Rule 11,
an attorney must have “made a reasonable inquiry into the facts” prior to filing suit. Brown v.
Fed'n of State Medical Bds., 830 F.2d 1429, 1435 (7th Cir. 1987). See also Jimenez v. Madison
Area Tech. College, 321 F.3d 652, 656 (7th Cir. 2003) (attorney must certify that pleading are
based on “knowledge, information, and belief, formed after an inquiry reasonable under the
circumstances”). What Lord had told his supervisors, including whether he had taken any action
that would qualify as protected activity under the ADA, was information entirely in Lord’s
possession. But so far as the record shows, Lord never complained that he was being
discriminated against on the basis of any disability. And since Lord knew that, his attorney also
knew or should have known.
“The burden of proof is on the Rule 11 fee opponent to establish objective reasonableness
and adequate pre-filing investigation once a prima facie showing of sanctionable conduct has
occurred.” Smart Options, LLC v. Jump Rope, Inc., No. 12 C 2498, 2013 WL 500861, at *3
(N.D. Ill. Feb. 11, 2013). Here, HVS has convincingly argued that Lord, and therefore Lord’s
counsel, knew that he had never complained about disability discrimination and thus could not
have been retaliated against for making such a complaint. Not a single piece of evidence was
ever presented (to HVS or the Court) suggesting Lord had been retaliated against in violation of
the ADA. Therefore, in responding to HVS’s sanctions motions, it was incumbent upon Lord’s
counsel to represent to the Court why she believed there was a good faith basis, after a
reasonable investigation, to pursue the ADA retaliation claim.
Lord and his lawyer have presented no evidence that there was a good faith basis to
pursue an ADA retaliation claim. Instead, Lord argues that he survived a motion to dismiss and
then dropped the claim prior to summary judgment. Both of these arguments are flawed. First, it
is axiomatic that a motion to dismiss takes as true all facts pled in the complaint. Thus, a facially
valid complaint will survive a motion to dismiss regardless of whether it has any factual basis in
reality. It is the attorney’s responsibility to make a reasonable inquiry to determine whether,
given the evidence currently in her possession, a good faith basis exists for making a claim in the
complaint. A complaint that makes up facts is still sanctionable, even if it survives a motion to
Next, Lord points out that he dropped the ADA retaliation claim. This is not entirely
accurate. Lord’s counsel evidently indicated in July 2013, prior to HVS’s filing for summary
judgment, that she would drop the ADA retaliation claim. She never filed any sort of dismissal
on the docket, however. HVS therefore included argument (albeit, brief) on the ADA retaliation
claim, to which Lord did not respond, and Judge Zagel granted summary judgment. In and of
itself, the Court agrees that opting to not respond to a claim (and therefore forfeiting all argument
over it) on summary judgment rather than withdrawing it does not independently warrant
The problem, however, is that an expensive process occurred in between those two
stages: discovery. Lord’s lawyer responded to HVS’s Rule 11 letter (which covered in depth
HVS’s perceived deficiencies in both the Title VII and ADA claims) with vague platitudes like
“a key component of this case” would be “born out in the upcoming depositions.” See Scarry
Letter, Feb. 15, 2013, ECF No. 128-4. Lord has never indicated, however, what information was
gleaned in discovery that changed his (or his counsel’s) opinion about the merit of the ADA
retaliation claim. Instead, counsel asserts merely that there was a “lack of evidence” concerning
the ADA claim. See Pl.’s Resp. to Sanction Mot. at 5, ECF No. 139. That much is incontestably
true, but it was also something Lord and his attorney realized, or should have, before they filed
the ADA retaliation claim. “[A]n attorney violates Rule 11 in maintaining a claim that is
unwarranted by existing law or has no reasonable basis in fact” once it becomes clear the claim
has no basis. Fabriko Acquisition Corp. v. Prokos, 536 F.3d 605, 610 (7th Cir. 2008). Without
any evidence or argument that the claim was dropped shortly after discovery revealed it to be
frivolous, the Court concludes Lord and his lawyer knew, or should have known, that the ADA
retaliation claim had no basis in fact from the beginning.
The motion for sanctions specifically requests that sanctions be entered against Lord and
his attorney. Rule 11(c) allows the Court to sanction “any attorney, law firm, or party that
violated the rule or is responsible for the violation.” Fed. R. Civ. P. 11(c)(1). A represented party
may be held responsible for any Rule 11 violation unless the violation is “legal in nature.” Philos
Techs., Inc. v. Philos & D., Inc., 943 F. Supp. 2d 880, 886 (N.D. Ill. 2013). In this case it is
objectively clear that both Lord and his counsel “should have known that his position [was]
groundless” because there were no facts to support the ADA retaliation claim. CUNA Mut. Ins.
Soc'y v. Office & Prof'l Emples. Int'l Union, Local 39, 443 F.3d 556, 560 (7th Cir. 2006). Thus,
the Court holds Lord and his counsel jointly and severally liable for the sanctions imposed.
The Court recognizes that the purpose of Rule 11 is to sanction, not necessarily to
compensate fully the opposing party. Samuels v. Wilder, 906 F.2d 272, 276 (7th Cir. 1990).
Thus, the Court directs HVS to submit a list of expenditures which were directly and exclusively
a result of the ADA retaliation claim. To the extent that HVS can demonstrate a specific number
of hours were spent on the ADA retaliation claim in drafting the motion to dismiss, for example,
it may present that documentation. The Court anticipates, however, that the bulk of Defendant’s
submission will relate to the expenses of medical discovery as discussed in paragraphs 19-21 of
its sanctions motion.
Having thus granted the motions for sanctions, the Court denies as moot the motion for
attorney’s fees as to the ADA retaliation claim. Because the Court is awarding HVS the fees
attributable to the plaintiff’s pursuit of a frivolous claim, it will receive all, or substantially all, of
what would be otherwise recoverable under § 1927 or Rule 54(d). Furthermore, in the Court’s
judgment, it is the filing of a complaint with a claim that had no bearing in fact or law, rather
than the specific conduct of the litigation, that was frivolous. See id. at 275 (“Section
1927 and Rule 11 are addressed to different conduct: the statute to prolonging litigation,
and Rule 11 to particular filings.”)
C. Discovery Practice
Finally, HVS faults Lord for “persist[ing] in bringing various discovery motions and
motions for reconsideration” of those discovery motions. Def.’s Mot. at 12, ECF No. 128. Crossreferencing the docket entries listed by HVS, the objectionable conduct was: one motion for
extension of time to complete depositions, one motion to compel (and to further extend time for
depositions and sanction HVS), and one motion for reconsideration. The extensions of time to
complete depositions were granted, the sanctions portion of the motion to compel and the motion
for reconsideration were denied. Although these motions were doubtless an inconvenience to
counsel and extended the discovery period, at least some of the motions had merit (some were
granted, after all). In this Court’s experience, one and a half denied discovery motions do not
amount to vexatious litigation that merits sanction. Compare Mustafa v. NSI Int'l, Inc., No. 15CV-06997, 2016 WL 6778888, at *8 (N.D. Ill. Nov. 16, 2016) (court issued four orders for
plaintiff to stop unnecessary filings, which numbered more than twenty); Johnson v. Melton
Truck Lines, Inc., No. 14 C 07858, 2016 U.S. Dist. LEXIS 136451, at *36 n.23 (N.D. Ill. Sep.
30, 2016) (noting Plaintiff’s “myriad” filings, including seven in a two week period which
contravened an explicit court order).
The Court therefore finds that the Title VII claims, although not meritorious, were not so
frivolous as to warrant sanctions and denies the motions as to those claims. Lord’s failure to
produce any evidence that there was ever a potential factual basis for the ADA retaliation claim,
on the other hand, demonstrates that the ADA claim was frivolous from the outset. Thus, the
Court grants the motion for sanctions in the amount of HVS’s attorneys’ fees and expenses that
can be attributed exclusively to the ADA claim. Having already provided all the relief to which
HVS is entitled, the Court denies as moot the remainder of the motions for attorney’s fees and
Dated: March 30, 2017
John J. Tharp, Jr.
United States District Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?