9th Circuit hears oral arguments on overturning FCPA whistleblower retaliation award

DOJ SEC FCPA Whistleblower

On November 14, 2018, a three judge panel for the United States Court of Appeals for the Ninth Circuit heard oral arguments in Sanford Wadler v. Bio-Rad Laboratories, Inc., et al. Bio-Rad, a life science research and diagnostics company, is hoping to overturn a February 2017 jury verdict ordering the company to pay its former General Counsel and Secretary, Sanford Wadler, $11 million in punitive and compensatory damages. Wadler’s complaint alleged that the company had fired him for being an FCPA whistleblower. As detailed in a previous FCPA Scorecard post, Bio-Rad paid $55 million in November 2014 to settle DOJ and SEC allegations that the company violated the FCPA in Russia, Thailand, and Vietnam. Wadler’s report to the Audit Committee had involved separate allegations that the company violated the FCPA in China, allegations that did not result in additional penalties against Bio-Rad.

Bio-Rad appealed the Wadler award on the grounds that the jury was erroneously instructed that the SEC’s rules or regulations forbid bribery of a foreign official; that the company’s alleged FCPA violations were the result of Wadler’s lack of due diligence; that the trial court wrongly excluded certain impeachment testimony and evidence related to the timing of Wadler’s pursuit and hiring of a whistleblower attorney; and that Wadler did not qualify as a “whistleblower” under Dodd-Frank in light of his reporting only internally and not to the SEC (pursuant to the U.S. Supreme Court’s decision in Digital Realty Trust, Inc. v. Somers, No. 10-1276, 583 U.S. ___ (2018)). During the argument, one member of the circuit panel reportedly expressed doubt concerning Bio-Rad’s jury instruction argument, and another told counsel for Bio-Rad, “I don’t see how this can be reversed on the theory you’re offering.”

For prior coverage of the Bio-Rad matter, please see here and here.