A few weeks ago, Silicon Valley VC firm Kleiner Perkins won a jury verdict in former employee Ellen Pao’s high-profile gender discrimination jury trial. (See the Law Talk discussion of the verdict here.) An interesting (and expected) follow-up issue has now emerged: litigation costs.
In the United States, the winning party’s attorneys’ fees and litigation costs are generally not paid by the losing party. This rule, often called the “American Rule,” is subject to fee- and cost-shifting provisions found in contracts or statutes. (The contrasting “English Rule” would generally impose on the losing party the obligation to pay the winning party’s attorneys’ fees and litigation costs.) Ms. Pao’s lawsuit was brought under a California Government Code statute prohibiting gender-based discrimination, and that statute provides for a losing defendant to pay a winning plaintiff’s attorneys’ fees and litigation costs. It also provides for a losing plaintiff to pay a winning defendant’s litigation costs, but not attorneys’ fees.
Pursuant to this cost-shifting provision, Kleiner is now asking Ms. Pao to reimburse its litigation costs in the amount of $972,814: $864,680 in expert witness fees, $59,000 in deposition costs, and $40,000 in other costs. You can see here the memorandum of costs that Kleiner’s lawyers filed with the court.
Even more interesting, Kleiner is reportedly offering to waive its right to recover litigation costs if Ms. Pao agrees not to appeal the trial court decision. Christina Lee, a spokeswoman for Kleiner, had the following explanation in a statement quoted in several newspapers and magazines (including Forbes): “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.”
To be continued . . . .