A federal appeals court panel dealt the former general counsel for Bio-Rad Laboratories (NYSE:BIO) a blow, slicing his $11 million jury award by $6 million and sending his whistleblower retaliation lawsuit back to U.S. District Court for a possible new trial.
The three-judge panel sitting in San Francisco ruled that the U.S. District Court judge in the January 2017 trial had improperly instructed the jury that parts of the Federal Corrupt Practices Act (FCPA) are rules or regulations of the Securities & Exchange Commission (SEC).
That jury had also found that a February 2013 internal report, in which general counsel Sanford Wadler wrote of his suspicion that the company had violated the FCPA in China, was protected whistleblower activity and a significant reason for his firing later that year. The appeals court decided that the internal report did not violate a federal financial regulatory statute because it does not apply to “purely internal reports.”
The appeals court ruled in favor of Bio-Rad on that claim and vacated the $2.96 million in back pay and stocks that the jury had awarded to Wadler, plus the $2.96 million that was doubled under the law. The district court had also awarded Wadler $5 million in punitive damages against the company in 2017, bringing his total award to $10.92 million plus interest from the first trial.
Wadler, who was general counsel and executive vice president when Bio-Rad sacked him in June 2013, alleged that he was fired right before the company was slated to present findings from its investigation into bribery in Russia, Thailand, and Vietnam. Bio-Rad later agreed to a $55 million settlement with the U.S. Department of Justice and the SEC, which found that it paid $7.5 million in bribes to drum up some $35 million in profits.