Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Defendant was convicted of possession of child pornography and appealed a judgment that included, as a condition of supervised release, a requirement that monitoring technology be installed on his computer-related devices. The court rejected defendant's argument that his conditions of supervised release should be vacated because he was not afforded adequate notice that the district court was considering imposing them where his procedural rights were not violated. The court also rejected defendant's claims that the computer monitoring condition imposed on him occasioned a greater deprivation of liberty than was reasonably necessary because the term "monitoring" was imprecise and encompassed a broad swath of surveillance methods, some of which would be unnecessary or intrusive. The court noted, however, that in situations like this one, where technological considerations prevent specifying in detail years in advance how a condition was to be effectuated, district courts should be flexible in revisiting conditions imposed to ensure they remain tailored and effective. Accordingly, the court affirmed defendant's sentence.

The SEC brought suit against senior officers of Gateway Incorporated ("Gateway") claiming that they unlawfully misrepresented Gateway's financial condition in the third quarter of 2000 in order to meet financial analysts' earnings and revenue expectations. After a three week trial, a jury found former Gateway financial executives, John J. Todd and Robert D. Manza, liable on all claims by the SEC. All parties appealed the district court's order in part. The court reversed the district court's order granting in part Todd's and Manza's motions for judgment as a matter of law on the antifraud claims under the Securities and Exchange Act of 1934, 15 U.S.C. 78a et seq., because substantial evidence supported the jury's verdict that Todd and Manza at least recklessly misrepresented revenue related to the Lockheed transaction, and that Todd recklessly misrepresented revenue as to the VenServ transaction, in the third quarter of 2000. The court also reversed the district court's order granting Jeffrey Weitzen's, former Gateway President and CEO, motion for summary judgment as to the Section 10(b) and Rule 10b-5 violations because there were genuine issues of material fact regarding whether Weitzen knowingly misrepresented Gateway's financial growth as "accelerated" given his knowledge of the unusual Lockheed and AOL transactions. There were also issues of material fact as to whether Weitzen was a "control person" under Section 20(a). The court affirmed Weitzen's motion for summary judgment as to the Rule 13b2-2 claim because there was no evidence that Weitzen signed a letter to Gateway's auditors knowing that it misrepresented Gateway's financial position. The court also affirmed the district court's order denying in part Todd's and Manza's motions for judgment as a matter of law on the aiding and abetting claims and their motions for a new trial.

Plaintiffs, working as auditors in The Boeing Company's ("Boeing") IT Sarbanes-Oxley ("SOX") Audit group, filed SOX whistleblower complaints under the Sarbanes-Oxley Act, U.S.C. 1514(a)(1), with the Occupation Safety and Health Administration after they were terminated by Boeing when they spoke with a reporter from the Seattle Post-Intelligencer ("Post-Intelligencer") about Boeing's compliance with SOX. At issue was whether plaintiffs' disclosures to the Post-Intelligencer were protected under section 1514(a)(1), which protected employees of publicly-traded companies who disclose certain types of information. The court held that section 1514(a)(1) did not protect employees of publicly-held companies from retaliation when they disclosed information regarding designated types of fraud or securities violations to members of the media.