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New California Ruling Could Help Ellen Pao in Legal Fee Fight With Kleiner Perkins

Pao doesn't want to pay Kleiner Perkins' expert witness fees, and a new ruling might help her avoid that.

Vicki Behringer

The $1 million repayment Kleiner Perkins Caufield & Byers is seeking from Ellen Pao for legal costs associated with her failed gender discrimination lawsuit is excessive, her lawyers said in a court filing today.

Pao’s argument includes a serendipitous boost from a brand new California Supreme Court ruling from this week, which established that in order to recover expert witness costs from her, the venture firm must prove that her case was frivolous or malicious.

The decision working in Pao’s favor was Williams v. Chino Independent Fire District on May 4, 2015, in which a lower court ruling was unanimously overturned.

Much of today’s filing quibbles about $3,000 expert-witness day trips for depositions and costs for duplicate witnesses who never testified. That’s routine, and follows a 15-day response time set by a previous filing by Pao’s former employer and litigation opponent. But the recent ruling does seem to help her side.

Pao’s lawyer Alan Exelrod argued that the employment discrimination trial, which concluded March 27 with a loss on all counts, merited a three-day jury deliberation with split votes and “sparked a broader conversation about gender parity which continues to this day,” so therefore it was not frivolous or in bad faith.

Kleiner Perkins is asking Pao, who is the interim CEO of Reddit and will be speaking at our Code conference later this month, to cover the costs of expert witnesses and depositions in the case, amounting to $972,814. It’s not seeking repayment of attorney fees or other costs, which are also substantial but unknown.

In today’s filing, Exelrod disclosed more than was previously known about Pao’s legal costs, in order to push back on Kleiner Perkins’ disclosure of a settlement offer made in November 2014.

Three months before the case went to trial, Kleiner Perkins’ legal team had offered to settle for $964,502.

But Exelrod said Pao’s costs at that time already included some $632,500 on attorneys’ fees, as well as $27,570 in costs for items such as transcripts and deposition videos.

Thus, the million-dollar settlement proposal was a “token, bad faith offer,” Exelrod wrote.

From today’s filing: “Defendant’s offer essentially calculated Plaintiff’s damages following trial as much less than $304,000, a figure which is disproportionately low in comparison to Plaintiff’s maximum calculated economic damages of nearly $16 million and minimum economic damages well into the millions, not including attorney’s fees and costs under the FEHA and punitive damages. Given the incredibly high exposure that Defendant faced, and considering Plaintiff’s expenditures in fees and costs to that point (a sum which was reasonably known to the Defendant), Defendant’s offer had no reasonable expectation of acceptance.”

Asked for comment, Kleiner Perkins referred to its statement of April 23: “We believe that women in technology would be best served by having all parties focus on making progress on the issues of gender diversity outside of continued litigation.”

According to the processes previously set in motion by the court, Pao has until June 8 to file an appeal in the case. Her spokeswoman said in an email today that a decision to go forward has not been made.

She also offered this statement:

“Ellen Pao filed a motion challenging the $972,814 in costs that Kleiner is seeking to recover from her. Ms. Pao believes that under the law Kleiner is not entitled to any of the $972,814. Kleiner stated publicly that it was willing to waive its $972,814 in exchange for Ms. Pao waiving her appeal. Since Kleiner is not entitled to any costs, its offer was really an offer that had no value. A hearing on this matter will be held before Judge Kahn on June 18, 2015.”

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