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Keywords

lawsuittortattorneyappealaffidavitsummary judgment

tortlitigationappealsummary judgmentpatent

Related Cases

Van Asdale v. International Game Technology, 577 F.3d 989, 92 Empl. Prac. Dec. P 43,644, Fed. Sec. L. Rep. P 95,314, 29 IER Cases 769, 2009 O.S.H.D. (CCH) P 33,015, 09 Cal. Daily Op. Serv. 10,331, 09 Cal. Daily Op. Serv. 10,417, 2009 Daily Journal D.A.R. 12,023

Facts

Shawn and Lena Van Asdale were hired as in-house attorneys by IGT in January 2001. They reported concerns about potential shareholder fraud related to IGT's merger with Anchor Gaming, particularly regarding undisclosed information that could affect the merger's valuation. After raising these concerns, both attorneys were terminated within months, leading them to file a lawsuit claiming retaliatory discharge under the Sarbanes-Oxley Act and various state torts. The district court initially granted summary judgment in favor of IGT, which the Van Asdales appealed.

According to Shawn, as part of his department's due diligence in connection with the proposed IGT–Anchor merger, he investigated this dispute by arranging to purchase a vintage Monte Carlo machine in Chicago and sending it to IGT's outside patent litigation counsel so that counsel could assess the impact of the machine on Anchor's patent.

Issue

Did the district court err in granting summary judgment in favor of IGT on the Van Asdales' claims of retaliatory discharge under the Sarbanes-Oxley Act and related state torts?

Rule

Under the Sarbanes-Oxley Act, an employee must demonstrate that they engaged in protected activity, the employer knew of this activity, the employee suffered an unfavorable personnel action, and there is sufficient evidence to suggest that the protected activity was a contributing factor to the adverse action.

Section 1514A(a)(1) of Title 18 prohibits employers of publicly-traded companies from 'discriminat[ing] against an employee in the terms and conditions of employment' for 'provid[ing] information … regarding any conduct which the employee reasonably believes constitutes a violation of … any provision of Federal law relating to fraud against shareholders.'

Analysis

The Ninth Circuit found that the Van Asdales had raised genuine issues of material fact regarding their claims. The court noted that the Van Asdales engaged in protected activity by reporting concerns about potential shareholder fraud, and that the district court had improperly dismissed their claims based on the sham affidavit rule without adequately considering the factual disputes. The court emphasized that the Van Asdales' disclosures were sufficiently related to shareholder fraud to qualify for protection under the Sarbanes-Oxley Act.

We agree with the district court that Shawn's conversations with Brown and Pennington satisfy this 'definitively and specifically' standard.

Conclusion

The Ninth Circuit reversed the district court's summary judgment in favor of IGT and vacated the dismissal of the Van Asdales' state-law claims, remanding the case for further proceedings.

We thus conclude that the Van Asdales raised a genuine issue of material fact regarding the cause of their terminations and that summary judgment should not have been granted.

Who won?

The Van Asdales prevailed in the appeal because the Ninth Circuit found that they had raised genuine issues of material fact regarding their claims, which warranted further examination rather than summary judgment.

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