Why it matters: This month, we highlight a few recent court rulings we found to be of interest.
Erhart v. BofI Holding, Inc.: On February 14, 2017, a Southern District of California judge ruled against the bank employer in the summary judgment stage of a whistleblower retaliation lawsuit, finding that the confidentiality provisions of an employment agreement (governed by California state law) are unenforceable as contrary to public policy to the extent that they run contrary to federal securities laws protecting whistleblowers who share confidential information with the SEC.
In re Search Warrant to Google: On February 3, 2017, a magistrate judge in the Eastern District of Pennsylvania ordered Google to comply with search warrants seeking customer emails stored outside of the U.S., finding that the transfer of emails stored on foreign servers to servers in the U.S. so as to enable FBI review did not qualify as an unlawful extraterritorial application of the Stored Communications Act (SCA) or an unlawful seizure under the Fourth Amendment. The judge's ruling was directly opposed to the July 2016 Second Circuit opinion in Microsoft v. United States (en banc review denied January 2017) that had reversed a district court ruling and held that Microsoft was not required to comply with a search warrant for customer emails stored on a server in Ireland because the SCA does not have extraterrestrial application and does not authorize U.S. courts to issue and enforce warrants for the seizure of emails stored exclusively on foreign servers.
Zayed (as court-appointed receiver for Oxford Global Partners, LLC et.al) v. Associated Bank, N.A.: On January 31, 2017, a District of Minnesota judge granted summary judgment in favor of Green Bay, Wisconsin-based Associated Bank, relieving it from a lawsuit that alleged that the bank knowingly aided a $194 million Ponzi scheme that defrauded nearly 700 investors nationwide. In throwing out the case against Associated Bank, the judge ruled that, in order to find the bank liable, Minnesota law requires evidence that the bank had "actual knowledge" of the fraud. After a review of the underlying factual record, the judge found that no "genuine issues of material fact" existed and that no reasonable jury would be able to reach the conclusion that the bank had "actual knowledge" of the fraud. The court-appointed receiver has filed an appeal to the Eighth Circuit.