Daily Labor Report®

Saturna Capital Bests Purported Whistleblower’s New Trial Bid

Dec. 26, 2018, 5:33 PM

A trial judge shouldn’t have excluded certain evidence in a securities whistleblower trial, the U.S. Court of Appeals for the Ninth Circuit held.

But the purported whistleblower won’t get a new trial despite the error because the evidence he wanted to present wouldn’t have led to a verdict in his favor, the appeals court said.

The jury ultimately found against Gordon Stroh in his lawsuit alleging his former employer, Saturna Capital Corp., fired him from his chief legal officer position because he reported legal and compliance issues.

He wanted to present evidence that the company chairman directed employees to install a backup computer system on his yacht and withhold certain information from the FBI if questioned.

The trial judge refused to allow the evidence because the employees didn’t follow through with installing the system, and the FBI didn’t question them.

Even if the jury had heard the evidence, it’s “highly unlikely” that it would have resulted in a different verdict, the appeals court said, noting the “overwhelming evidence” that Stroh was fired for reasons unrelated to his purported whistleblowing. The trial judge’s error isn’t grounds for a new trial because the abuse of discretion was harmless, the appeals court said.

Judges Susan P. Graber, M. Margaret Mckeown, and Morgan B. Christen served on the panel that issued the unsigned, unpublished opinion.

The case is Stroh v. Saturna Capital Corp., 2018 BL 476746, 9th Cir., No. 17-35607, unpublished 12/24/18.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; C. Reilly Larson at rlarson@bloomberglaw.com

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