Former USA Today reporter Toni Locy of Canonsburg had a typically pugnacious response when asked if she could afford court fines of as much as $5,000 a day for refusing to reveal sources for stories she wrote on the 2001 anthrax attacks in Washington, D.C.:

"No," she snapped. "Could you?"

It turns out she didn't have to start paying those fines, imposed by U.S. District Judge Reggie Walton, himself a Donora native, because an appellate court temporarily blocked them on Tuesday.

But the larger legal battle still looms for Ms. Locy, 48, a West Virginia University journalism professor and former Pittsburgh Press staffer with a reputation for feistiness.

The order from the U.S. Court of Appeals for the District of Columbia Circuit only means she won't have to pay fines while her lawyers fight Judge Walton's order holding her in contempt.

But the judge is still demanding that Ms. Locy provide the names of all dozen or so Justice Department and FBI sources who might have identified Dr. Steven Hatfill to her as a suspect in the attacks.

The fines Judge Walton had imposed start at $500 a day, but would escalate to $5,000 a day. What's more, the judge ordered that Ms. Locy pay them herself, with no help from her former employer, Gannett Co., owner of USA Today, or from anyone else.

Such "coercive sanctions" aren't unheard of in federal civil cases and are designed to force parties to comply with judges' commands.

But this one, like that sent New York Times reporter Judith Miller to jail in the Valerie Plame case, has generated enormous outrage among press groups who see sanctions as another attack on freedom of the press by an increasingly conservative judiciary.

Tim Lewis, a former judge on the 3rd U.S. Circuit Court of Appeals who sat in Pittsburgh, said, "I think it's draconian and wrong."

Mr. Lewis, who knows Ms. Locy from her days covering the federal courts for the Press, said, "I have a lot of respect for Judge Walton. I just think he's wrong on this issue."

He said he joins such groups as the Reporters Committee for the Freedom of the Press, which features daily updates on the Locy case, in hoping Congress quickly passes the Free Flow of Information Act, which would shield reporters from being forced to disclose sources.

"This is a fundamental tenet of any democracy," said Mr. Lewis.

The bill, which is before the Senate, would be retroactive, so it likely would shield Ms. Locy and make her case moot.

Her predicament stems from a federal suit brought in 2003 by Dr. Hatfill against the government in which he claimed the Justice Department violated his right to privacy by identifying him as a suspect.

He was never charged and the case remains unsolved.

As part of his suit, his lawyers subpoenaed six reporters who had cited confidential government sources naming Dr. Hatfill. In legal parlance, the reporters aren't defendants in the suit but "third parties."

The lawyers say they need the sources to pursue the suit.

News organizations dispute that and say the real motive for involving the reporters at all is to increase the potential damage award for Dr. Hatfill, since he is demanding payment for each time someone in the government mentioned his name to a reporter in connection with the anthrax investigation.

"He's trying to ratchet up the damage award," said Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press. "This is all about money. That's all it is."

Bolstering that opinion, at least in the minds of press advocates, is the fact that Dr. Hatfill's lawyers already have many of the sources' names.

After securing waivers, four of the subpoenaed reporters revealed their sources. Even Ms. Locy has given up two of her sources.

Putting aside the damage award issue, the underlying legal dispute boils down to whether Dr. Hatfill's rights under the Privacy Act are more important than Ms. Locy's rights as a reporter under the First Amendment.

The judge said he "appreciates the importance" of a free press but sides with Dr. Hatfill, saying his "interest in securing those names is so substantial that it trumped the reporters' asserted qualified privilege" to withhold the names.

Ms. Locy doesn't see it that way, of course.

"I think the judge's interpretation of the Privacy Act is way too broad," she said in an interview. "I think if the judge's ruling stands we're going to have to be very careful in how we cover everything from street crime to white-collar crime."

She also maintains that she can't remember the names of her sources for the two stories she wrote about Dr. Hatfill, although she said she does remember the names of a dozen other confidential sources with whom she often discussed terrorism issues.

The judge ordered her to provide all the names so that Dr. Hatfill's lawyers could depose them, pointing out that those who did not reveal information about Dr. Hatfill could remain secret to everyone but to him and his lawyers.

Ms. Locy has secured waivers from two of her sources so they can be deposed, including former U.S. Attorney Roscoe Howard.

But Dr. Hatfill still wants all of the names and the judge says he should get them.

News organizations, which have filed an amicus brief in support of Ms. Locy, describe her situation as a "nightmare scenario" for reporters who promise confidentiality in exchange for information, standard operating procedure in Washington.

One of the keys to her appeal is whether the information revealed in her stories about Dr. Hatfill was vital to the "public interest."

Dr. Hatfill's lawyers said the government "leaks" did not rise to that level but were rather "disclosures from investigative files about one innocent and uncharged man."

The lawyers also acknowledged that Ms. Locy's contention that sanctions could "chill" future Justice Department officials from leaking information -- but they said that's a good thing.

In a brief to the appellate court, they cited this passage from one of the USA Today stories:

"The sources, who requested anonymity because the anthrax probe is active, say the focus on Hatfill stems from the belief by many investigators -- but not all of them -- that he was behind the mail attacks that killed five people, sickened 17 others and forced thousands to take antibiotics."

The lawyers wrote:

"It is difficult to conceive of a chilling effect more clearly in the interest of the American public."

Judge Walton said he was bound by an earlier decision by his district's appellate court in the case of Wen Ho Lee, who was identified by the media and the government as a suspect in the theft of nuclear secrets for China but was never charged.

Subpoenaed reporters in that case were also held in contempt for refusing to reveal their sources, and the contempt sanctions were upheld by the appellate court.

"Failing to see a material difference between Ms. Locy's situation and the reporters whose contempt citations were affirmed in Lee, her request to stay this court's contempt citation must be denied," Judge Walton wrote.

Yet the appellate court did stay the fines.

So what will happen next?

"Who knows?" said Mr. Lewis. "We'll have to wait for the appellate decision. But I'm worried about Toni."