Securities
Dec. 23, 2016
GC whistleblower claims not usurped by attorney-client privilege, judge says
A jury trial in a whistleblower retaliation case between a top Orange County life sciences company and its former general counsel will start in four weeks after the company's late-inning gambit to effectively junk the case failed.
Daily Journal Staff Writer
The trial in a whistleblower retaliation case between a top Orange County life sciences company and its former general counsel will start in four weeks after the company's late-inning gambit to effectively junk the case failed.
U.S. Magistrate Judge Joseph C. Spero denied Bio-Rad Laboratories Inc.'s motion to exclude what it deemed information protected by attorney-client privilege from the trial, which is scheduled to begin on Jan. 17.
In a stern, 37-page order on Tuesday, Spero said that Bio-Rad's new outside counsel from Quinn Emanuel Urquhart & Sullivan LLP ignored the court's prior order to specify documents from the case that may contain confidential information. Instead, the judge wrote, defendants unreasonably asked the court, "to exclude virtually all of the evidence and testimony plaintiff might rely upon to prove his case."
Messages left Wednesday with Bio-Rad attorneys James R. Asberger and John M. Potter of Quinn Emanuel were not returned.
Kevin B. Clune, partner at Kerr & Wagstaffe LLP and lawyer for plaintiff Sanford C. Wadler, said that Spero's order would not affect the start of the trial.
The general counsel at Hercules-based Bio-Rad for 24 years, Wadler was fired by the company in 2013.
Bio-Rad claimed its former top lawyer had anger problems, acting irate and hostile when information was requested of him.
But Wadler claimed in a lawsuit that his dismissal was a textbook case of whistleblower retaliation. The lawyer said that Bio-Rad shoved him out after he questioned whether the company violated the federal Foreign Corrupt Practices Act while doing business in China.
Linda M. Inscoe from Latham & Watkins LLP, Bio-Rad's prior outside counsel, failed in a motion to dismiss the case.
In September, Bio-Rad replaced Inscoe with Asberger and Potter. The new lawyers told Spero at a case management conference one month later that Wadler is possibly unable to prosecute his claims in the light of the attorney-client privilege that would apply to practically all the evidence Wadler must rely upon.
Spero informed the Quinn Emanuel lawyers that, having failed to file a summary judgment motion, they could not use the motion to exclude to get rid of the case.
"The court permitted Bio-Rad to bring a motion to exclude, but cautioned Bio-Rad's counsel that it would be required to 'delineate with precision' the specific evidence that Bio-Rad would seek to preclude, on a 'line-by-line' basis," Spero wrote.
The company instead relied on legal theories and case law for why state law on attorney-client privilege renders the lawsuit moot, Spero wrote.
Such arguments are preempted by federal whistleblower protections under the Dodd-Frank Act and Sarbanes-Oxley Act, Spero said. Also, he added, the judge wanted a discussion of evidence, not arguments against the case proceeding, which was, "exactly the sort of motion the court informed counsel ... it would not permit."
matthew_blake@dailyjournal.com
Matthew Blake
matthew_blake@dailyjournal.com
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