Case 3:15-cv-02287-BAS-NLS Document 404 Filed 09/28/23 PageID.18385 Page 1 of 27
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`CHARLES MATTHEW ERHART,
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
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`Case No. 15-cv-02287-BAS-NLS
`consolidated with
`15-cv-02353-BAS-NLS
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`ORDER DENYING DEFENDANT’S
`RENEWED MOTION FOR
`JUDGMENT AS A MATTER OF LAW
`OR NEW TRIAL (ECF No. 386)
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`v.
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`BOFI FEDERAL BANK,
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`Defendant.
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`And Consolidated Case
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`Plaintiff Charles Matthew Erhart worked for Defendant BofI Federal Bank as an
`internal bank auditor. When Erhart discovered conduct that he believed broke the law,
`Erhart reported the conduct to his boss and eventually the Bank’s regulators. BofI
`terminated him.
`In the aftermath, BofI and Erhart told competing tales of what happened. BofI
`claimed Erhart abandoned his job and wanted to “bring down the bank.” Erhart, in turn,
`portrayed himself as an internal auditor in a turbulent corporate environment. Time and
`time again, Erhart battled against pressure from senior management as he discovered
`wrongful conduct. But when events were hitting a flashpoint, Erhart’s supervisor abruptly
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`quit instead of escalating the concerns to the Bank’s Audit Committee. Erhart then
`contacted the Bank’s regulators to report his findings before being later terminated.
`After years of litigation, the parties’ colliding stories came to a head in a three-week
`trial. To say the jury was called upon to make classic credibility determinations is an
`understatement. Erhart’s word was pitted against various current and former BofI
`employees, including the upper echelons of management. He prevailed. The jury
`unanimously found BofI violated whistleblower protections and defamed Erhart, awarding
`him $1.5 million.
`Now before the Court is BofI’s Renewed Motion for Judgment as a Matter of Law
`or a New Trial. The Bank attacks the sufficiency of the evidence for the jury’s verdict and
`asks for judgment in its favor. BofI alternatively asks the Court to order a new trial or
`remit the damages. Neither request is persuasive. Hence, for the following reasons, the
`Court denies BofI’s motion.
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`BACKGROUND
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`I.
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`Procedural History
`In October 2015, Erhart filed this action claiming BofI retaliated against him for
`reporting wrongdoing to his supervisors and the Government. His initial complaint
`included ten claims and described over a dozen instances of believed wrongdoing at the
`Bank. BofI responded with a countersuit against Erhart, claiming he breached an employee
`confidentiality agreement and violated his duty of loyalty to the Bank.
`After protracted motion practice and discovery, the case neared trial in 2020. The
`COVID-19 pandemic and scheduling accommodations added two more years, leading to
`the Court setting a three-week jury trial for 2022.
`Along the winding way, the Court made more rulings than can be fairly summarized
`here. Two bear further mention. First, at the summary judgment phase, the Court grappled
`with the core of Erhart’s lawsuit: his whistleblower retaliation and wrongful termination
`claims. (Summ. J. Order, ECF No. 192.) These claims required Erhart to show he
`reasonably believed BofI broke the law. (Id. 19:6–21:2; 53:1–54:8, 64:3–5.) He claimed
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`wide-ranging conduct did so, including BofI providing a misleading response to an SEC
`investment fraud subpoena, BofI making untimely payments to employees’ 401(k) plans,
`and BofI making unauthorized risky loans. (Id. 10:20–28.) Some of these factual
`predicates did not survive summary judgment, but many others remained for trial. (Id.
`88:21–89:28; see also ECF No. 200.)
`Second, at the motion in limine phase, the Court found Erhart failed to provide any
`estimate of his calculable damages throughout discovery. (Order on BofI’s Mot. in Limine
`No. 5, ECF No. 244.) Those damages included his “claims for future wages and earnings,
`lost employment benefits, bonuses, overtime, vacation benefits, medical expenses, and
`back pay.” (Id.) The Court also found he could not avoid the automatic sanction under
`Rule 37(c)(1). This ruling meant Erhart could seek only “emotional distress damages,
`reputational damages, and punitive damages” at trial. (Id.)
`II. Trial1
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`Ten claims reached the jury. Erhart brought four counts for (1) violation of
`Sarbanes-Oxley’s anti-retaliation provision, (2) violation of California Labor Code section
`1102.5—the state’s general whistleblower statute, (3) wrongful termination in violation of
`public policy, and (4) defamation. (Jury Verdict 1:1–6:4, ECF No. 314.) BofI brought six
`counterclaims for (1) breach of contract, (2) conversion, (3) breach of the duty of loyalty,
`(4) negligence, (5) violation of California Penal Code section 502, and (6) violation of the
`Computer Fraud and Abuse Act.2 (Id. 6:5–7:18.)
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`1 The Trial Transcript is organized into fifteen volumes, which the Court cites to using the leading
`numeral in the pincite—e.g., 3-760:13 cites to Volume 3, Page 760, Line 13. The volumes’ electronic
`case filing numbers are included below.
`Vol 1 (No. 289)
`Vol. 2 (285)
`Vol. 6 (No. 294)
`Vol. 7 (296)
`Vol. 11 (No. 308) Vol. 12 (310)
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`Vol. 3 (286)
`Vol. 8 (298)
`Vol. 13 (312)
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`Vol. 4 (290)
`Vol. 9 (300)
`Vol. 14 (315)
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`Vol. 5 (292)
`Vol. 10 (303)
`Vol. 15 (321)
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`2 Two other claims reached trial—but not the jury. First, considering the limitation on Erhart’s
`recoverable damages, the Court found there was insufficient evidence for his Dodd-Frank Act anti-
`retaliation claim. (Trial Tr. 10-2790:3 to 15.) Second, the Court put to rest BofI’s amorphous fraud and
`concealment claim after hearing no supporting evidence. (Id. 10-2790:16 to 10-2791:6.)
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`Erhart’s Perspective. From start to finish, the jury heard conflicting narratives about
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`what happened during Erhart’s tenure at the Bank, including the reasons for his
`termination. Indeed, a considerable portion of Erhart’s case was presented through BofI’s
`current or former employees, putting credibility determinations front and center. (Trial Tr.
`1-266:10 to 3-760:13.)
`Then, for several days of trial, Erhart told his perspective. The jury learned Erhart
`grew up in Kansas, studied finance at the University of Kansas, graduated with a 4.0 GPA,
`and then worked as an examiner for FINRA—the Financial Industry Regulatory
`Authority—for three and a half years. (Trial Tr. 3-761:10 to 3-766:19.) He then joined
`BofI as an internal auditor in September 2013. (Id. 3-769:16 to 3-773:6.) Although some
`of his experience at FINRA translated well to this new role, there was still “a huge learning
`curve.” (Id. 3-769:17 to 3-770:15.) Erhart was then twenty-seven years old. (Id. 3-773:11
`to 12.)
`Another key figure was Jonathan Ball, Erhart’s direct supervisor. (Trial Tr. 3-770:20
`to 22.) Erhart received most of his on-the-job education from Ball. (Id. 3-774:15 to 16.)
`Ball had previously been the head of internal audit at a bank that failed and shared his
`experiences with Erhart. (Id. 6-1734:20 to 6-1735:3.) When Erhart began to discover
`issues during his work, he repeatedly raised them to Ball and sought Ball’s experienced
`guidance, who was responsive to Erhart’s concerns. (E.g., id. 3-785:14 to 3-786:5, 3-848:7
`to 14.) Some senior members of management were not so supportive, however. In one
`instance, Erhart was asked to remove a negative finding from an audit report out of concern
`that it “could be discoverable in a class-action lawsuit” against the Bank. (Id. 3-819:2 to
`3-820:21.) Further, after Erhart put his concerns in writing, he received a less favorable
`performance evaluation, with management suggesting he rely less on email and “take a
`more proactive approach” by “getting out and meeting with data owners and business unit
`managers.” (Id. 2-454:22 to 2-457:5, Trial Ex. 25.) In another instance, the Senior Vice
`President of Audit and Compliance walked by Erhart, “and in passing, he said out loud, if
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`Matt continues to turn over rocks, he’s going to find a snake and get bit.” (Trial Tr. 3-
`880:20 to 3-881:25.)
`Then, as concerns piled up in the audit department, Ball made it clear to Erhart “that
`he was going to go to the [Bank’s] Audit Committee” with the issues. (Trial Tr. 5-1447:14
`to 16; see also, e.g., id. 3-847:10 to 12; 3-868:1 to 15; 3-890:2 to 10.) Congress enacted
`Sarbanes-Oxley “[t]o safeguard investors in public companies and restore trust in the
`financial markets following the collapse of Enron Corporation.” Lawson v. FMR LLC, 571
`U.S. 429, 432 (2014). Among other things, Sarbanes-Oxley mandates that the publicly-
`traded holding company for the Bank maintain an audit committee where “[e]ach member
`of the audit committee” is a member of the board of directors and “shall otherwise be
`independent.” 15 U.S.C. § 78j-1(m). Plus, there must be procedures for employees to raise
`“concerns regarding questionable accounting or auditing matters” to the audit committee.
`Id. (See also, e.g., Trial Tr. 1-292:1 to 1-293:2 (testifying about the composition and
`structure of BofI’s Audit Committee).)
`Events hit a flashpoint around February and March of 2015. BofI’s principal
`regulator—the Office of the Comptroller of the Currency (“OCC”)—was conducting a
`“full-scope examination” of the Bank, with on-site examiners. (Trial Tr. 2-507:4 to 2-
`509:4.) Erhart was concerned that the Bank was withholding information from the OCC.
`(E.g., id. 3-812:16 to 3-813:17, 3-852:7 to 10; 3-855:23 to 25.) His supervisor, Ball, “was
`the point person with the OCC” for audit functions at the Bank. (Id. 2-508:7 to 10.) Yet,
`on March 5, 2015, during the examination, Ball “walked out” on his job with no notice to
`Erhart. (Id. 3-865:16 to 3-866:2.)
`During the morning of the next day, which was a Friday, Erhart contacted the OCC
`to report his concerns, and a telephonic meeting was scheduled for the following Monday.
`(Trial Tr. 3-892:5 to 20.) Erhart “spent a big portion of [his] weekend combining all the
`issues, most of—a lot of them which were initially intended for the Audit Committee, into
`a document and provided a written document that was 10 to 15 pages, approximately, in
`length to the OCC via email.” (Id. 3-892:21 to 3-893:3.) He then met with the OCC and
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`had a follow-up meeting in person, where he brought his company-issued laptop computer.
`(Id. 3-895:12 to 3-896:21.)
`Termination Letter. The jury learned that around this same time, BofI was trying to
`summarily fire Erhart and recover his company-issued laptop, purportedly because he “was
`being dishonest” and not at work “for a critical meeting.” (Trial Tr. 2-544:13 to 25 (“I also
`said if he, you know, is sitting at home playing video games, that I felt like he should be
`terminated on the spot.”); see also id. 2-595:8 to 10 (failing to recall if there was any
`“mention that Mr. Erhart had done anything dishonest”).) This on-the-spot termination
`clashed with BofI’s attendance policy, which was to terminate employees if they had three
`days of unexplained absences—not just a single morning. (Id. 3-725:14 to 3-727:25.) And
`BofI was trying to terminate Erhart after it opened locked cabinets at his workstation and
`discovered an unfavorable memorandum about perceived wrongdoing involving the
`Bank’s Chief Executive Officer (“CEO”). (Id. 2-465:11 to 2-468:7.)
`After preparing a termination letter, BofI attempted to deliver it and obtain Erhart’s
`laptop, but the Bank was unsuccessful. (Trial Tr. 2-545:1 to 18, Trial Ex. 1156.) The
`Bank’s CEO, Greg Garrabrants, also became involved in the effort to recover the laptop,
`which was atypical. (Id. 2-600:24 to 2-603:9.) Nor was it normal for BofI to dispatch its
`head of information technology “to go out to collect company property” from an employee.
`(Id. 2-599:4 to 6; see also 2-545:11 to 15.)
`Termination. Before BofI could deliver its termination letter, Erhart requested
`medical leave. (Trial Tr. 2-549:5 to 2-551:4; 2-554:3 to 11.) BofI followed the law and
`processed Erhart’s leave request under the Family and Medical Leave Act and California’s
`Family Rights Act. (Id. 3-715:13 to 16.) BofI then sent Erhart a leave eligibility letter,
`which also requested the return of any “BofI laptop . . . as soon as possible.” (Id. 3-718:6
`to 3-719:2.) This request to return a laptop was not put in every medical leave letter. (Id.
`3-719:19 to 21.) And BofI’s Chief Performance Officer, who was responsible for human
`resources functions, testified that before Erhart, she had never collected a laptop from an
`employee who was out on medical leave. (Id. 2-588:22 to 25; 2-589:5 to 11; 2-603:15 to
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`18.) Erhart returned the laptop within a few days of receiving this leave notice. (E.g., 3-
`719:7 to 11; 4-1044:2 to 11.)
`After accepting Erhart’s medical certification, BofI informed him his twelve-week
`leave commenced as of March 6, 2015. (Trial Tr. 3-719 to 3-721:14, Trial Ex. 1175.)
`Normally, the BofI employee who coordinated medical leave would then reach out to an
`employee like Erhart before he was slated to come back from leave. (Trial Tr. 2-593:1 to
`8.) BofI did not do so or tell Erhart his leave expired. (Id. 3-724:10 to 23.) Instead, on
`June 9, 2015, the Bank sent a letter informing Erhart that he was being terminated for
`failing to report to work for more than three consecutive days—the same attendance policy
`referenced above. (Id. 3-725:14 to 3-726:2, Trial Ex. 1178.)
`Defamation. As for Erhart’s defamation claim, this claim centered on statements
`made by BofI’s CEO, Greg Garrabrants, during a transcribed call with investors and
`analysts. (Trial Tr. 7-1978:23 to 7-1979:10.) CEO Garrabrants called Erhart “an
`inexperienced, underperforming, junior audit team member.” (Trial Ex. 29 at 1, ECF No.
`386-12.) He similarly said Erhart “did not understand the Bank’s management reporting
`systems” and was a “poor performer.” (Id. at 2.) Garrabrants further said Erhart’s emails
`“were often incoherent and they did not elicit responses because of their incoherence.” (Id.
`at 3.)
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`Previously, however, the jury had heard from Erhart’s supervisor, Ball, about
`Erhart’s competency. Ball told Erhart on more than one occasion that he was doing a good
`job; the written quality of Erhart’s audits was generally better than other auditors in the
`department; Ball never put Erhart on a performance improvement plan; there was no reason
`to put Erhart on such a plan; and Ball never told Erhart he was in danger of losing his job.
`(Trial Tr. 6-1735:4 to 6-1737:3.) And the jury saw more than enough of Erhart’s work
`emails throughout the trial to determine whether they were “often incoherent” and “did not
`elicit responses because of their incoherence.” (E.g., Trial Ex. 97.)
`BofI’s Counter-Narrative. The Bank presented its own narrative through various
`witnesses and lengthy cross-examination of Erhart. The Bank elicited testimony
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`addressing Erhart’s believed wrongdoing, suggesting that nothing nefarious transpired
`during his tenure. (E.g., Trial Tr. 2-505:20 to 2-506:7, 6-1772:14 to 6-1773:15.) CEO
`Garrabrants claimed the Bank “knew [Erhart] was wrong about all these things.” (Id. 7-
`1991:3.) He contended that “Erhart deviated from his audit scope and pushed himself into
`areas in which he did not have the appropriate expertise, he jumped to conclusions, [and]
`those conclusions could have been corrected if he had better communication skills and
`simply got up and talked to the people that would have had that information.” (Id. 7-1991:9
`to 14.) Further, Ball unexpectedly walked out of his job during the middle of the OCC’s
`on-site examination because of burnout and back pain, not because of the problems raised
`by Erhart that needed to be addressed by the Audit Committee. (Id. 13-3356:21 to 24; see
`also id. 6-1759:8 to 24.)
`In addition, according to BofI, Erhart was terminated because he did not return after
`his medical leave, and his communications to his supervisor, senior management, and
`regulators about believed wrongdoing had nothing to do with it. (See Trial Tr. 3-725:2 to
`3-726:14.) The Bank also cast doubt on Erhart’s medical leave, revealing he visited the
`zoo with his father and girlfriend on the same day his leave commenced and never took
`recommended medication. (Id. 4-1187:18 to 23, 6-1608:23 to 6-1609:2.) Finally, the Bank
`sought to impugn Erhart’s credibility through a variety of evidence, including by
`introducing testimony that Erhart said “he hated being at the [expletive] bank” and wanted
`to bring down the Bank. (Id. 9-2440:12 to 9-2455:19.)
`Verdict. After more than a full day of deliberations, the jury reached a unanimous
`verdict. (Trial Tr. 13-3433:6, 14-3502:8.) BofI’s claims fell flat; the jury rejected all six
`of them. (Jury Verdict 6–7.) As for Erhart’s claims, the jury first found BofI violated
`Sarbanes-Oxley’s anti-retaliation provision and checked two out of the three options for
`specifying the conduct Erhart “reasonably believe[d] was a violation of law.” (Id. 1.) The
`jury rejected BofI’s affirmative defense “that it would have taken the same personnel action
`in the absence of Mr. Erhart’s protected activity.” (Id. 2.)
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`Next, the jury found BofI violated California Labor Code section 1102.5. (Jury
`Verdict 2.) For this claim, the jury checked all nine options for specifying the conduct
`Erhart “reasonably believe[d] was a violation of state, local or federal law or regulation.”
`(Id. 3.) The jury again rejected BofI’s affirmative defense. (Id.) And to wrap up the
`retaliation claims, the jury found BofI wrongfully terminated Erhart in violation of public
`policy, again rejecting the Bank’s affirmative defense. (Id. 3–4.) In line with the Court’s
`damages ruling mentioned above, the jury assessed Erhart’s “emotional distress or harm to
`his reputation” for these claims. (Id. 4.) The jury awarded him $1 million. (Id.)
`In addition, the jury found Erhart proved BofI defamed him. (Jury Verdict 4.) Of
`the four possible defamatory statements specified by the Court, the jury checked one: the
`statement that “Mr. Erhart was incompetent at his job.” (Id. 4–5.) The jury rejected BofI’s
`claim that this statement was “substantially true” and awarded $500,000 in damages for
`emotional distress and reputational harm.3 (Id. 5.) BofI now renews its request for
`judgment as a matter of law on Erhart’s claims and alternatively seeks a new trial.
`RENEWED JUDGMENT AS A MATTER OF LAW
`Legal Standard
`A motion under Rule 50(b) for judgment as a matter of law is not a standalone
`motion, but rather is “a renewed Rule 50(a) motion.” E.E.O.C. v. Go Daddy Software, Inc.,
`581 F.3d 951, 961 (9th Cir. 2009). If the court has either denied or deferred its ruling on
`the Rule 50(a) motion, and a jury returned a verdict against the moving party, that party
`may renew the motion under Rule 50(b). Id.; Nitco Holding Corp. v. Boujikian, 491 F.3d
`1086, 1089 (9th Cir. 2007). In ruling on a Rule 50(b) motion, the court may allow judgment
`on the verdict, order a new trial, or reverse the jury and direct the entry of judgment as a
`matter of law. Fed. R. Civ. P. 50(b).
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`I.
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`3 The jury also found BofI’s conduct warranted punitive damages under state law but deadlocked
`on the amount to award. (Jury Verdict 6.) The Court held a limited, one-week retrial on the punitive
`damages issue, and a second jury found punitive damages were not appropriate. (ECF No. 370.)
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`Because it is a renewed motion, a post-verdict motion under Rule 50(b) must be
`based on the same grounds asserted when the party moved under Rule 50(a) during pre-
`deliberation. E.E.O.C., 581 F.3d at 961. A party may not “raise arguments in its post-trial
`motion for judgment as a matter of law under Rule 50(b) that it did not raise in its pre-
`verdict Rule 50(a) motion.” Freund v. Nycomed Amersham, 347 F.3d 752, 761 (9th Cir.
`2003); see also Murphy v. City of Long Beach, 914 F.2d 183, 186 (9th Cir. 1990)
`(“[Judgment notwithstanding the verdict] is improper if based upon grounds not alleged in
`a directed verdict [motion].” (alterations in original)).
`Judgment as a matter of law under Rule 50(b) is appropriate “only if, under the
`governing law, there can be but one reasonable conclusion as to the verdict.” Winarto v.
`Toshiba Am. Elecs. Components, Inc., 274 F.3d 1276, 1283 (9th Cir. 2001). When
`evaluating such a motion, “the court must draw all reasonable inferences in favor of the
`nonmoving party, and it may not make credibility determinations or weigh the
`evidence.” Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 150 (2000); see also
`Winarto, 274 F.3d at 1283 (providing the court “must accept the jury’s credibility findings
`consistent with the verdict.”).
`The Ninth Circuit has made clear that a court “cannot disturb the jury’s verdict if it
`is supported by substantial evidence.” Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir.
`1999). Substantial evidence means “evidence adequate to support the jury’s conclusion,
`even if it is also possible to draw a contrary conclusion” from the same evidence. Castro
`v. Cnty. of Los Angeles, 833 F.3d 1060, 1066 (9th Cir. 2016) (internal quotation marks
`omitted). “Thus, although the court should review the record as a whole, it must disregard
`all evidence favorable to the moving party that the jury is not required to believe, and may
`not substitute its view of the evidence for that of the jury.” Reeves, 530 U.S. at 151.
`II. Analysis
`A. Retaliation Claims
`
`BofI argues the verdict on Erhart’s three whistleblower retaliation claims cannot
`stand as a matter of law for several reasons. (Mot. 4:2–22:3.) The Court first considers
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`BofI’s attack on the retaliation evidence because this issue concerns all three claims. The
`Court next turns to BofI’s challenge to the protected activity component of Erhart’s
`Sarbanes-Oxley claim. Last, the Court addresses BofI’s arguments regarding the
`sufficiency of evidence for the damages awarded on these claims.
`1.
`Evidence of Retaliation
`BofI contends there is insufficient evidence to support the jury’s determination that
`BofI retaliated against Erhart for reporting believed wrongdoing to his supervisor and the
`Bank’s principal regulator. (Mot. 9:20–12:15.) The Bank likewise contends the jury’s
`rejection of its affirmative defense to Erhart’s retaliation claims cannot stand.4 (Id. 12:16–
`14:13.)
`Erhart’s first three successful claims required that he show BofI retaliated against
`him in violation of the law. There are some nuances, but if the Bank terminated Erhart for
`engaging in protected activity, then this termination would satisfy the retaliation
`requirement for each claim. (Jury Instructions Nos. 14, 17, 18; ECF No. 319.) See 18
`U.S.C. § 1514A(a) (prohibiting various retaliatory conduct, including a “discharge”); Cal.
`Lab. Code § 1102.5(b) (providing an employer “shall not retaliate against an employee”);
`Tameny v. Atl. Richfield Co., 27 Cal. 3d 167, 178–79 (1980) (explaining California’s cause
`of action for wrongful discharge in violation of public policy). “Whether an adverse
`employment action is intended to be retaliatory is a question of fact that must be decided
`in the light of the timing and the surrounding circumstances.” See, e.g., Coszalter v. City
`of Salem, 320 F.3d 968, 978 (9th Cir. 2003); accord Yanowitz v. L’Oreal USA, Inc., 36 Cal.
`4th 1028, 1061–62 (2005) (state law).
`BofI’s Rule 50(b) challenge is not persuasive. The Bank claims it was
`“uncontroverted” at trial that BofI terminated Erhart “for job abandonment,” and therefore
`
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`4 BofI preserved these related challenges by making a motion to dismiss the retaliation claims
`after the close of Erhart’s case, where it raised arguments concerning the June 9 termination letter and the
`Bank’s claimed basis for ending Erhart’s employment. (Trial Tr. 8-2300:14 to 8-2301:17.) See E.E.O.C.,
`581 F.3d at 961.
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`“there was no evidence” that this termination “resulted from any reporting of alleged
`wrongdoing.” (Mot. 10:16–19, 12:12–13.) This framing of the evidence is not only one-
`dimensional, but it also overlooks the jury’s credibility determinations.
`As summarized above, there was substantial evidence for the jury to conclude that
`Erhart’s termination was motivated by his protected activity. Viewing the evidence in
`Erhart’s favor, he received a lower performance evaluation after he put concerns in writing.
`Erhart reported believed wrongdoing to his supervisor repeatedly. A senior executive told
`him that if he “continue[d] to turn over rocks, he [was] going to find a snake and get bit.”
`Then, when Erhart did not report to work the day after his boss “walked out” unexpectedly,
`the Bank opened locked cabinets at his workstation and discovered an unfavorable
`memorandum about perceived wrongdoing involving its CEO. On the same day, the Bank
`attempted to terminate Erhart as he was contacting its principal regulator. BofI’s CEO
`became involved in the effort to recover Erhart’s company-issued laptop, which was
`atypical. The termination letter was rescinded only after Erhart requested medical leave.
`Even still, the Bank insisted on the return of the laptop, which was again unusual. The
`Bank was aware Erhart was communicating with the OCC. And then the Bank later
`terminated him without reaching out about his medical leave, which was once again
`abnormal, and BofI apparently did so while applying the same attendance policy it
`bypassed when trying to fire Erhart the first time.
`Given this showing, there was ample evidence for the jury to conclude BofI
`terminated Erhart in retaliation for his protected activity. Indeed, BofI’s suggestion that
`the jury had to credit its stated reason for firing Erhart ignores the law. (Instruction No. 5
`(“You may believe everything a witness says, or part of it, or none of it.”).) See, e.g.,
`Newton v. Equilon Enters., LLC, 411 F. Supp. 3d 856, 868 (N.D. Cal. 2019) (“However, it
`is the jury’s purview to decide what the evidence means, whether it is credible, and how to
`weigh it.”). The jury was empowered to not only make credibility determinations, but also
`consider circumstantial evidence, including BofI’s knowledge that Erhart engaged in
`protected activity, the proximity in time between the protected activity and the retaliatory
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`employment decision, and the pattern of conduct consistent with retaliatory intent. See
`Coszalter, 320 F.3d at 978 (explaining whether adverse employment action is retaliatory
`depends on “surrounding circumstances”); Jordan v. Clark, 847 F.2d 1368, 1376 (9th Cir.
`1988) (noting retaliatory intent “may be established by an inference derived from
`circumstantial evidence”); see also Flores v. City of Westminster, 873 F.3d 739, 750 (9th
`Cir. 2017) (explaining that there is no bright-line rule about the timing of retaliation, and
`“[d]epending on the circumstances, three to eight months is easily within a time range that
`can support an inference of retaliation” (alteration in original)).
`BofI’s related challenge meets the same fate. As an affirmative defense to each
`retaliation claim, BofI needed to show, “by clear and convincing evidence,” that it would
`have terminated Erhart “for legitimate, independent reasons, even if Mr. Erhart had not
`engaged in the protected activity.” (Instruction No. 21.) BofI contends the jury’s decision
`to reject this defense cannot stand in light of the evidence. (Mot. 12:16–13:3.) This
`argument faces an uphill battle considering the heightened burden of proof for the defense.
`“When a party has the burden of proving any . . . defense by clear and convincing evidence,
`it means that the party must present evidence that leaves [the factfinder] with a firm belief
`or conviction that it is highly probable that the factual contentions of the . . . defense are
`true.” (Instruction No. 46.) Considering the evidence at trial and the credibility
`determinations that are consistent with the verdict, the Court does not hesitate to conclude
`this Rule 50(b) challenge is unpersuasive. See Winarto, 274 F.3d at 1283 (explaining the
`court can overturn the jury “only if, under the governing law, there can be but one
`reasonable conclusion as to the verdict”); see also Reeves, 530 U.S. at 151 (providing the
`court “must disregard all evidence favorable to the moving party that the jury is not
`required to believe”).
`Ultimately, BofI’s motion “rests not on a lack of substantial evidence, but on [its]
`own interpretation of that evidence.” See Newton, 411 F. Supp. 3d at 868. The Court
`denies the Rule 50(b) request based on the evidence of retaliation and the Bank’s
`affirmative defense to the retaliation claims.
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`Sarbanes-Oxley Protected Activity
`2.
`The Bank renews its request for judgment as a matter of law on Erhart’s Sarbanes-
`Oxley claim based on the protected activity element.5 (Mot. 4:2–9:19.) BofI argues no
`reasonable jury could conclude Erhart reasonably believed BofI was violating any of the
`laws encompassed by Sarbanes-Oxley’s anti-retaliation provision, 18 U.S.C. § 1514A.
`(Id.)
`
`The Court has already spilled a lot of ink on this topic. (Summ. J. Order 18:23–
`49:10; Second Dismissal Order 13:6–18:2, ECF No. 44; First Dismissal Order 18:1–27:2,
`ECF No. 22.) In a nutshell, Erhart needed to show he “reasonably believe[d]” the conduct
`he reported violated one of the laws enumerated in § 1514A. 18 U.S.C. § 1514A(a). The
`listed laws are mail fraud, wire fraud, bank fraud, securities fraud, “any rule o