Sanford Wadler v. Bio-Rad Laboratories, Inc. ( 2019 )

FILED
NOT FOR PUBLICATION
FEB 26 2019
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SANFORD S. WADLER, No. 17-16193
Plaintiff-Appellee, D.C. No. 3:15-cv-02356-JCS
v.
MEMORANDUM*
BIO-RAD LABORATORIES, INC., a
Delaware Corporation; NORMAN
SCHWARTZ,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of California
Joseph C. Spero, Magistrate Judge, Presiding
Argued and Submitted November 14, 2018
San Francisco, California
Before: GRABER and BENNETT, Circuit Judges, and KOBAYASHI,** District
Judge.
In this whistleblower retaliation case, we hold today, in a separately filed
opinion, that the district court’s instruction concerning the Sarbanes-Oxley Act of
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Leslie E. Kobayashi, United States District Judge for
the District of Hawaii, sitting by designation.
2002 (“SOX”) was erroneous, but that the instructional error did not taint the
Tameny claim. This disposition resolves the remaining issues in the case.
1. Plaintiff Sanford Wadler argues that the erroneous SOX instruction,
which stated that the Foreign Corrupt Practices Act (“FCPA”) is a “rule or
regulation of the SEC,” was harmless error with respect to the SOX claim. See
Clem v. Lomeli, 566 F.3d 1177, 1182 (9th Cir. 2009) (recognizing a rebuttable
presumption of prejudice when a district court gives an erroneous jury instruction
in a civil case); Saman v. Robbins, 173 F.3d 1150, 1155 (9th Cir. 1999) (“We
review the jury instructions for an abuse of discretion and will reverse only if any
error is not harmless.”). Wadler’s arguments on appeal differ markedly from those
that he raised in the district court and differ from those embodied in his proposed
instructions at trial. We therefore deem those arguments to have been abandoned,
forfeited, or waived.
2. With respect to the Dodd-Frank claim, we reverse with instructions to
enter judgment in favor of Bio-Rad. During the pendency of this appeal, the
Supreme Court held, in Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767, 778
(2018), that this statute does not apply to purely internal reports, such as the one at
issue here. Accordingly, the portion of damages attributable to Dodd-Frank’s
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doubling provision, 15 U.S.C. § 78u-6(h)(1)(C)(ii), which amounts to about $2.96
million plus interest, must be vacated.
3. We review the district court’s evidentiary rulings for abuse of discretion.
See United States v. Lynch, 437 F.3d 902, 913 (9th Cir. 2006) (en banc) (per
curiam) (stating standard with respect to a ruling that precluded testimony);
Tennison v. Circus Circus Enters., Inc., 244 F.3d 684, 688 (9th Cir. 2001) (same as
to exclusion of evidence under Federal Rule of Evidence 403).
(a) The district court permissibly precluded Defendants from calling
Cassingham as a witness to impeach Wadler. The court permissibly considered the
parties’ stipulation, reasonably concluded that Defendants could have anticipated
Wadler’s testimony when they withdrew Cassingham from their witness list, and
reasonably concluded that the testimony would not be offered for purely
impeachment purposes.
(b) The district court permissibly relied on Rule 403 to limit the questioning
of Wadler about his search for an employment lawyer before submitting the Audit
Committee Memo. The court reasonably considered the potential for jury
confusion and the potential for a mini-trial on a tangential issue.
VACATED in part, AFFIRMED in part, and REMANDED. The parties
shall bear their own costs on appeal.
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