Your post is quite convoluted (not sure why your friend getting a son is relevant), but I think what you MIGHT be saying is that you and your friend and her employer made an arrangement whereby your friend's compensation for working as an independent contractor was paid to you instead of to her. As a result, her employer sent you a 1099, so you have $X more in taxable income than you should have. You appear to have retained $Y to cover the additional tax liability, but it's not clear from your post whether $Y is more or less than your actual additional tax liability. You wrote that "[t]he taxes came up to $1000 , but she had only paid $200," but it's not clear whether that $200 includes or is in addition to the amount you retained from some of the checks.
If that's true, then what you described was quasi-contractual in nature. However, as "Tax Counsel" pointed out (at the other site where you posted about this), this was almost certainly an illegal scheme, so you're not likely to be able to sue successfully.
I agree that, if you're not willing to eat this, you should at least consult with an attorney. However, one solution might be for your friend to get herself an SSN or ITIN and ask that the employer re-issue the 1099 to her instead of you.