If it had neen an oral exercise, you would have had to write "Ich bin gegen sie" or "Ich bin gegen Sie", and both would have been accepted.
Neither"I am against you" nor anything else in English is an acceptable solution.
An oral exercise expects you to "write what you hear", not to translate.
My previous exercise was, "Der Hund läuft gegen die Wand." Gegen was used in the sense of proximity, not in the adversarial sense. This is in contrast to the advice posted here. Please advise if there is an exception rule, or if the dog's greatest adversary is the wall. Thank you!
"sie" means "her" or "them". "Sie" meaning you is always capitalized. http://german.about.com/od/grammar/a/Germanyou.htm
Scroll down to the Formal you "Sie": http://german.about.com/library/blcase_sum2.htm
"sie" can be "her" and "them" here. It can't be "you", because that would need "Sie" to be capitalized.
Concerning "her", this is the accusative of the personal pronoun "sie" ("she"). "ihr" is the possessive pronoun, which is also "her" in English, but doesn't fit here.