On September 28, 2023, the U.S. District Court for the Southern District of California issued two separate orders in a long-running SOX whistleblower lawsuit. Following a jury trial, the court upheld the jury’s $1.5 million damages award and awarded the plaintiff $2.4 million in attorneys’ fees. Erhart v. BofI
Update on Bofl SOX Whistleblower Litigation
This is an update on our previous blog posts regarding the Erhart v. BofI Holding, Inc. case.
We previously reported in October 2017 and March 2017 on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (Bofl) internal auditor. In late 2018, the parties filed
Update on BofI Whistleblower Litigation
UPDATE: California Federal Court Permits Former Bank Internal Auditor’s Whistleblower Claims to Proceed
A California federal court—in Erhart v. BofI Holding, Inc., 2017 U.S. Dist. LEXIS 14755, Case No. 15-cv-02287 (S.D. Cal. Sept. 11, 2017)—recently denied BofI Federal Bank’s (“BofI’s”) motion to dismiss the Sarbanes-Oxley whistleblower claims plead in their former internal auditor Charles Erhart’s amended complaint. The court also denied BofI’s motion as to Erhart’s defamation claim, allowing it to proceed, but dismissed Erhart’s claims for (i) violation of the Confidentiality of Medical Information Act (“CMIA”); (ii) intentional infliction of emotional distress; and (iii) breach of the implied covenant of good faith and fair dealing.
California District Court Addresses Whistleblower’s Self-Help
In Erhart v. BofI Holding, Inc., Case No. 15-cv-02287, (S.D. Cal. Feb. 14, 2017), a bank’s internal auditor reported alleged misconduct to federal agencies, engaged in self-help discovery by appropriating the bank’s confidential information, and allegedly widely disseminated such information. When the bank alleged that this conduct violated the parties’ confidentiality agreement and state and federal law, the employee countered that his appropriation and disclosures were protected by whistleblower statutes. As discussed below, the court held that: (i) the employee’s disclosures to the government were protected; (ii) his alleged disclosures to the media were not; and (iii) any additional protection of his appropriation and disclosure of confidential information may turn on whether his actions were reasonably necessary to pursue whistleblower claims.
Whistleblower’s Attorney’s Communications with Regulators Found to be Protected by Work Product Doctrine
A California Magistrate Judge in BofI Federal Bank v. Erhart ruled that a whistleblower’s attorney’s communications sent to federal regulators were protected by the attorney work product doctrine. No. 15-cv-2353 (S.D. Cal. Aug. 5, 2016). The court concluded that the whistleblower’s attorney had not waived work product protection through her disclosure to third-party regulators, finding that she and the regulators shared a common interest.