Ellen Pao could get $160 million

Elizabeth Weise | USA TODAY

SAN FRANCISCO — In a surprise ruling that could push the case toward $160 million, the judge in the Ellen Pao case has ruled that the fired venture capitalist has the right to sue for punitive damages.

Pao is suing Kleiner Perkins Caufield & Byers for $16 million in lost wages and future earnings, alleging sex discrimination and retaliation by the Menlo Park, Calif., firm. But a ruling on Saturday could add as much as $144 million to the figure.

Last Tuesday Kleiner lawyer Lynne Hermle asked Judge Harold Kahn to dismiss the punitive damages claim, saying that Pao's complaint does not rise to the legal requirement of "malice, fraud or oppression."

On Saturday Kahn gave his answer: Pao has the right to sue for punitive damages.

"There is sufficient evidence from which a reasonable juror could conclude that Kleiner Perkins engaged in intentional gender discrimination, that Kleiner Perkins acted with malice, fraud or oppression," he said in his ruling.

The ruling must be "very disconcerting," for Kleiner, said Paul Millus, an employment law specialist with the Garden City, NY firm of Meyer Suozzi.

"What was a run of the mill discrimination lawsuit for the most part is a whole other animal when punitive damages are involved. Usually punitive damages are reserved for the worst of the worst behavior, which did not seem to be described in this case. The judge obviously believes otherwise or is erring on the side of caution for appeal purposes. Either way, this ups the ante for Kleiner Perkins exponentially," he said.

Punitive damages can be as much as nine times the figure awarded for compensatory damages and are meant as a punishment for the discriminating party.

In Pao's case, that could mean as high as $144 million, plus the $16 million for compensatory damages.

In a ruling against AutoZone in San Diego last November, a female employee who was demoted after she became pregnant was awarded $872,000 in compensatory damages and $185 million in punitive damages.

Kahn noted in his ruling that by law he's required to interpret the evidence in the plaintiff's favor.

He also said that there was sufficient evidence "from which a reasonable juror" could decide that Kleiner had retaliated against Pao for complaining about the sexual discrimination and retaliation she faced and for filing her lawsuit.

Attorneys for Kleiner declined to comment on the ruling.

Closing arguments in the trial are expected to begin on Tuesday.