Second Circuit vacates whistleblower verdict due to bad jury charge

The Court of Appeals vacates a $903,000 whistleblower verdict on the basis that the trial court did not properly charge the jury about the plaintiff's burden of proof. We have a strong dissent.

The case is Murray v. UBS Securities, LLC, issued on February 10. Plaintiff was fired after he reported to a supervisor that coworkers had violated Securities and Exchange Commission regulations. The case went to trial, plaintiff won, the Second Circuit took the verdict away, and the case went to the Supreme Court, which held that, contrary to the Second Circuit's analysis, plaintiff did not have to prove the employer acted with "retaliatory intent" because intent or "animus" is not an element of any retaliation claim under the Sarbanes-Oxley Act of 2002. On remand from the Supreme Court, the Second Circuit again erases the verdict and remands the case for new trial on the basis of defendant's other jury charm objections, which no appellate court has ruled upon until now.

Under the statute, the employer is liable if its whistleblowing was a contributing factor to the unfavorable personnel action, i.e., the plaintiff's termination. The trial court charged the jury as follows: a contributing factor is one that "tended to affect in any way UBS's decision to terminate plaintiff." The Court of Appeals, by a 2-1 vote, says this instruction was incorrect and a new trial is in order.

First, the Court holds, "tended in any way to affect" the decision to fire the plaintiff is wrong because the jury has to be told that the whistleblowing is at least "partly responsible for" the adverse action. But, the Court holds, this charge is bad because "[w]histleblowing may 'tend to affect' termination generally, without being partly responsible for a particular plaintiff's termination." Taken literally, this charge allows the jury to rule in the plaintiff's favor if the jury merely thinks that whistleblowing in general might tend to result in someone's termination, even if the whistleblowing did not affect this particular plaintiff's termination. In other words "the words 'tended to' 'increased the level of abstraction such that a jury might look beyond whether the whistleblowing activity caused the termination to whether it was the sort of behavior that would tend to affect a termination decision."

Second, the Court holds, the "in any way" language was misleading because it allowed the jury to consider effects that did not contribute to plaintiff's termination. The Court reasons that "in any way" might produce a plaintiff's victory even if the employer's reaction to the whistleblowing was not actually a contributing factor, such as if the whisteblowing caused the company to consult counsel to weigh the risk of a potential lawsuit before terminating the employee, as the "whistleblowing could be said to have 'affected' that termination by 'producing an . . . alteration' in how it came about, even if the decision to terminate was not 'based on whistleblowing -- not even a little bit."

In dissent, Judge Perez writes that the majority's reasoning "takes a pessimistic view of the jury's grasp of the trial proceedings (and of the English language) because no reasonable juror would be so myopic as to be knocked off course by six words in a charge comprising more than fifty-seven hundred," and the charge as a whole accurately conveyed plaintiff's burden of proof by variously stating that plaintiff must prove his whistleblowing "was a contributing factor in the termination of his employment." We usually examine jury charges as a whole and examine the offending language in context. Judge Perez says "'tended' to affect' is a reasonable, nontechnical way of conveying that burden -- that is, of conveying that Murray needed to show that his whistleblowing increased the probability that UBS would fire him but not that it was a but-for cause of him being fired" As for the "affect in any way" portion of the charge, that was proper because "surely a reasonable juror would know that Murray did not sue UBS because of the manner in which he was fired." Rather plaintiff sued "because he was fired."

A couple of observations here. First, Judge Park wrote the majority ruling, and Judge Menashi agreed with it. Judge Perez wrote the dissent. We have two Trump appointees in the majority and a Biden appointee in dissent. This case shows us the ideological divide on the Second Circuit, though not every case has this particular panel. Second, I wonder what the jury in this case would think of this ruling? The jury probably does not know this case is still going on, years after it rendered its verdict. Nor is the jury likely to know that the case went to the Supreme Court, or that the Court of Appeals just vacated the verdict because it thinks the jury could have been misled by the jury instructions. Jurors reach a verdict and then leave the courthouse to return to their lives. They never know that the case is far from over, or that judges and lawyers might spend the next several years picking through the case and evaluating how the jury might have analyzed the case.