There is a common misperception that defendants fear plaintiff attorneys and will negotiate a settlement even on cases that they think they can win in order to insure that their costs are contained and so that they will not be subject to a “runaway jury”. In fact, most jurors are very conservative here in Massachusetts, and plaintiff verdicts are relatively rare. As found out recently in California, plaintiffs should seriously consider the strengths of their cases before going forward with their case or rejecting a reasonable settlement offer.
A former partner in the venture capital firm of Kleiner Perkins Caufield and Byers, Ellen Pao, sued her former firm for discrimination. Unfortunately for her, she lost the suit, and her former firm sought $973,000 in legal fees to defend against her suit. While the court did not grant them the $973,000 in fees, the court did approve nearly $276,000 in fees for successfully defending itself during her discrimination lawsuit. Kleiner Perkins sought nearly $865,000 for its expert fees, but the judge said that a “fair approximation” of what the firm incurred for work central to beating back the discrimination claim was nearly $229,000.
The court’s decision states that the “allowable amount of those costs is limited to the work that was reasonably needed to respond to Ms Pao’s claims, and not for all the work that KPCB, its counsel, the experts or those working with them thought might in some way be helpful to KPCB’s position in this lawsuit.”
Kleiner Perkins partner Christina Lee said in a statement that this was a fair result. “This tentative ruling recognizes that our settlement offer was reasonable and made in good faith,” Lee said. “It also recognizes the cost rules still apply when a plaintiff refuses a reasonable settlement offer and forces the parties to go through an expensive trial.”
Kleiner Perkins had offered Pao, now interim chief executive of microblogging company Reddit, nearly $1 million to settle before her case went to trial. Pao did not accept and sought to convince a jury earlier this year that the venture capital firm had short-circuited her career because she is woman. The jury sided with Kleiner Perkins.
In a show of real hutzpah, Pao, who has said she would appeal, has offered to drop her case for $2.7 million. Why Kleiner Perkins would pay her that after they already won the case and were awarded $276,000 in fees I don’t know. Were Pao to lose her appeal, Kleiner Perkins could take her back to court for additional fees.
The moral to the story is story is think twice before you decide to go forward and bring a law suit against another, and when you find yourself in a hole, stop digging.
Thank you,
Michael K. Gillis, Esq.
GILLIS & BIKOFSKY, P.C.
1150 Walnut Street
Newton, MA 02461
Phone: 617-244-4300
Fax: 617-964-0862
E-mail: mgillis@gillisandbikofsky.com