Gillis v,. Warner Bros. Home
Entertainment





















Filed 11/20/12 Gillis v,. Warner Bros. Home
Entertainment CA2/7









>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

>





California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.





IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND
APPELLATE DISTRICT



DIVISION
SEVEN




>

JASON GILLIS, Plaintiff and Appellant, v. WARNER BROS. HOME ENTERTAINMENT INC., Defendant and Respondent.

B231922 (Los Angeles County Super. Ct. No. BC429905)

APPEAL from
a judgment of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Rita J. Miller, Judge.
Affirmed.

Law Offices
of Victor L. George, Victor L. George and Wayne C. Smith for Plaintiff and
Appellant.

Manatt,
Phelps & Phillips, Esra Acikalin Hudson, Joanna S. McCallum and Joanna H.
Sattler for Defendant and Respondent.



______________________



>INTRODUCTION



Plaintiff
Jason Gillis appeals from a summary
judgment in favor of defendant Warner Bros. Home Entertainment Inc. (Warner
Bros.) in his action for retaliation in violation of public policy. He contends triable issues of material fact
exist, and the trial court erred in denying him a continuance to complete
discovery. We affirm.



FACTS



A. Plaintiff’s
Employment by Warner Bros.

In August
1999, plaintiff was hired by Warner Home Video (WHV) as an analyst in the
Credit and Customer Operations Department (CCO). The CCO manages WHV’s receivables from the
sale of home videos to large retail outlets.
When he was hired, plaintiff signed a document acknowledging that he was
an at-will employee.

Plaintiff
was promoted several times and ultimately was promoted to director in the CCO
in 2006. Plaintiff and another director,
Donald Mouck (Mouck), reported to CCO’s executive director, Darryl Banks, who
reported to CCO’s vice president, Rohit Patel (Patel). When Darryl Banks was transferred in February
2007, plaintiff and Mouck reported directly to Patel while a search was
undertaken for a new executive director.
Patel hired a new executive director in July 2007, Robert Lahr (Lahr),
and plaintiff and Mouck then reported to Lahr.

As a
director, plaintiff received increases in his annual salary and bonuses every
year, approved by Patel. These continued
through 2009.



B. Warner
Bros. Contracts with High Radius

In 2006,
WHV hired High Radius, a software development company, to develop an automated
system to enable CCO to improve efficiency and decrease errors. To enable High Radius to tailor the system to
WHV’s needs, Patel provided High Radius access to CCO’s personnel, customer
websites and accounts. High Radius
signed a nondisclosure agreement prior to being given access, and Patel
informed plaintiff of High Radius’s agreement with WHV and nondisclosure
agreement.

In 2007,
CCO began implementing an enterprise resource planning system, called SAP,
which would integrate all of its supply chain processes into a single automated
system. High Radius had dispute
management software, Dispute Resolution Accelerator, that was compatible with
SAP. Patel recommended that WHV contract
with High Radius to acquire the software.

After
conducting a competition analysis and evaluating the software, Warner Bros. Procurement
Group concluded that High Radius’s software was unique and unavailable from
other providers due to its compatibility with SAP and its features which met
WHV’s requirements. The procurement
group also concluded that even though High Radius was a relatively new company,
the risk to Warner Bros. would be relatively low because the cost of the
software was a very small portion of the amount Warner Bros. was spending on
improvements to its global supply chain functions. The procurement group approved hiring High
Radius to provide the software.

Warner
Bros. and High Radius executed a Master Software License Agreement and an
Independent Contractor Services Agreement in mid-2007. Both contained confidentiality and
nondisclosure agreements.



C. Plaintiff’s
Complaints to Human Resources

In the
spring and summer of 2007, plaintiff began complaining to WHV’s Human Resources
(HR) department about Patel. He
complained that Patel was causing morale problems by setting unrealistic
deadlines, imposing an excessive workload, giving conflicting directives, and
blaming subordinates for his own mistakes.

In April
2007, plaintiff met with Shelly Hance (Hance), Manager of Human Relations,
about Patel. One of the concerns he
expressed to her was that CCO staff was being used to start up High Radius.

On June 28, 2007, plaintiff and Patel
attended a meeting with Enrique Carvajal (Carvajal), Vice President of Human
Resources, regarding the issues plaintiff had raised with Human Resources. Plaintiff sent an email to HR on June 29, and
it was forwarded to Patel. Patel was
disappointed about his team’s lack of communication with him. Plaintiff was dismayed to learn that his
email had been forwarded to Patel.href="#_ftn1"
name="_ftnref1" title="">^>[1]

Patel met
with plaintiff on July 10, 2007. Patel said he wanted to go over an email
plaintiff had sent to HR, point by point, to show plaintiff how he could have
saved his career at WHV. Patel was very
angry that he had been given a three-page write-up of issues he needed to work
on.

After the
meeting, Patel took actions which plaintiff interpreted as being
retaliatory. These included not
providing training he had promised to plaintiff, imposing short deadlines for
work and requiring plaintiff to do work which plaintiff considered to be
unnecessary and a waste of time.

Late on
September 21, 2007, Patel sent an email to Carvajal and Tony Rodriguez
indicating that plaintiff and Mouck had met with Lahr after Patel left work for
the evening. Patel wrote that Lahr said
“that he informed [plaintiff and Mouck] of the vision [Patel had] for the
department and asked if they were on board.
[Lahr] said [plaintiff] was; but did not comment on [Mouck]. I am going to use [Lahr] as a filter to manage
my requests in a timely manner. [Lahr]
is doing his best to handle the situation; but I can not [sic] run a department that has staff on it that does not support
the long term vision.

“I was also
informed that [plaintiff] did go to HR again, but I am unaware of the
circumstances. At our meeting several
months ago, we asked that the directors come to me should they have any issues
with me first. This I thought would be
courteous to the head of the department; but what do I know? If his visit to HR was related to me, then
there is no trust with [plaintiff] and it is beyond repair. I need to send a message that if they are not
on board, then they should not be part of the department. I will require your assistance as I will not
tolerate this type of behavior an[y] longer.
[¶] [Lahr] and I have worked with
other key managers and they are on board with the vision and any resistance
from the Directors will set the department back many years.”

Tony
Rodriguez responded that he supported Patel’s position and was “ready to help
HR make the right moves to get the CCO team all rowing in the same
direction. Don’t let this get you down,
we just need to get over this challenge so you and [Lahr] can focus on the
positives and leverage your good players to make the right contributions.” Rodriguez said he would “make best efforts to
join [Patel and Carvajal] to begin next steps.”

After this,
Patel took actions which plaintiff again considered to be retaliatory. Patel stopped holding business council
meetings; plaintiff acknowledged, however, that no one told him why business
council meetings had been canceled. When
plaintiff and Mouck made recommendations to hire certain candidates, Patel did
not follow those recommendations and “hired a candidate on his own without
consulting [them].” Patel removed
plaintiff from the Community of Practice membership without giving plaintiff
advance notice.



D. Plaintiff’s
Complaints to Employee Relations and Legal Department

Plaintiff
also voiced concerns about High Radius to the Employee Relations department and
members of the corporate legal department.
He was concerned that Patel hired High Radius to develop a tool for
addressing returns; plaintiff believed this was a bad business decision because
CCO already had an effective tool for that.
He also complained that High Radius founder Sashi Narahari used WHV
resources to form the company after a meeting with members of CCO to outline
CCO’s dispute resolution processes.
Plaintiff also expressed his belief that High Radius was sharing WHV’s
processes with other companies.
Plaintiff believed that WHV could “potentially lose a competitive
advantage that [it] currently hold[s] over other companies” if High Radius sold
software that it created as a result of its relationship with WHV to WHV’s
competitors.

Plaintiff
told Employee Relations and members of the legal department that he believed
Sashi Narahari had a brother, Sreedhar Narahari, who worked for Warner
Bros. He also told them that Patel and
Sashi Narahari were friends. According
to plaintiff, during a CCO management meeting, Patel said that he “should have
Sashi throw a party for CCO instead of taking my kickback.” Based on this comment, plaintiff complained
to Employee Relations and members of the legal department that Patel had a
kickback agreement with High Radius.

Plaintiff
complained that when he discussed with Patel the possibility of using another
company as an alternative to High Radius, Patel agreed on condition that
Sreedhar Narahari sit in on the meeting as a “mole.” Plaintiff also complained that when WHV paid
for Patel to attend credit industry conferences, Patel spoke about High Radius.

In written
documents he submitted to Employee Relations and the legal department in early
2008, plaintiff wrote that he felt he was “required to come forward with the
information that [he] passed along [about High Radius] due to [his] signing
Warner Bros. Standards of Business Conduct, and Warner Bros. Conflict of
Interest documents.” On February 21, he
was notified that his “concerns regarding HighRadius [sic] have been forwarded to Leigh Chapman (Chapman), Senior Vice
President, Chief Employment Counsel & Deputy General Counsel.”

On July 21,
2008, plaintiff sent an email to Chapman, with a cc to Stephanie McNutt
(McNutt), Vice President and Senior Employment Counsel. Plaintiff thanked Chapman and McNutt “for
looking into the High Radius situation, which appeared to violate company
policy . . . .” He
stated that he appreciated the fact Chapman told him that he “did exactly what
you would hope employees would do in these situations with regard to company
compliance issues.” After reviewing
Chapman’s findings that he had a reason to come forward based on what appeared
to be suspicious activity, but that there was nothing inappropriate in the
relationship between Patel and Warner Bros., and Sashi Narahari and High
Radius, plaintiff stated: “I would like
to follow up briefly to make sure that I fully understood Warner Bros. position
on a couple of issues, and primarily to confirm that I have fully met any obligation
that I have to Warner Bros. with regard to Warner Bros. compliance policies,
such as, Conflicts of Interest, Ethical Business Practices Agreement, Standards
of Business Conduct, Protecting Confidential Information, or any other policy
to which I am accountable. . . .” He summarized his concerns as follows: (1) “Have I fully met my obligation to the
company on this matter?” (2)
“Confirmation that sharing CCO process flows with Sashi in Jan. 2006 was to be
found in line with Company policy?” (3)
“Confirmation that pitching High Radius processes developed by WHV to
competitors is OK per Company policy.”
He also sought clarification on whether it was appropriate for Patel to
provide Sashi Narahari with CCO process flows prior to the formation of High
Radius, and whether it was appropriate for Patel to pitch High Radius to Warner
Bros. competitors.

McNutt
responded to plaintiff on July 31 that Warner Bros. “did a comprehensive and
thorough investigation and [is] satisfied that the issues you raised have been
resolved.” McNutt reminded plaintiff
that she told him “that while there was an element of truth to some of the
allegations, not all of them were true and we also did not find any misconduct,
injury or damage to the Company.” The
investigation found nothing inappropriate in “the sharing of CCO process flows
with High Radius.” Rather, “it was
necessary for this to occur in order for High Radius to identify information
gaps and to design the functionality for us that we needed. When [Patel] was first dealing with Mr.
Narahari, his company was formed under a different name. At the time the contracts were signed, the
name had changed to High Radius.

“With
respect to ‘pitching’ High Radius to competitors, we advised you that it is
fairly common in most businesses when one company has found a vendor who
supplies a superior product or service to recommend that vendor to his or her
counterparts at other companies. We
found that this is what [Patel] may occasionally have done which is not
prohibited by any Company policy.”
McNutt reiterated that she appreciated his bringing his concerns to her
attention and providing the opportunity to investigate them, but the
investigation found no unlawful conduct or violation of company policy. She also reassured him that he had fulfilled
his obligations to Warner Bros.



E. Plaintiff’s
Termination

In 2008,
Patel began introducing a “process improvement” function in CCO. This function examined systematic, repetitive
issues in processes and identified solutions to remedy these issues.

Patel
recommended that WHV hire Claudia Daniel (Daniel), an auditor and Warner Bros.
employee involved in the implementation of the SAP program, to lead the process
improvement function in CCO. Daniel
began working as the Director – Process Improvement in October 2008. Some of plaintiff’s responsibilities were
transferred to Daniel.

At this
same time, Warner Bros. was working on an Alternative Sourcing Program (ASP),
in which Warner Bros. retained outside consultants from CapGemini, a global
provider of technology, consulting and outsourcing services. As part of the ASP process, a team of Human
Resources staff, counsel from the legal department, and CapGemini consultants,
with input from Patel, Lahr and Daniel, conducted a functional analysis to
determine whether certain CCO functions could be outsourced to CapGemini.

The
functional analysis involved analyzing the overall purpose of CCO and each of
its functions—as opposed to each position in CCO—to determine which body of
work could be effectively outsourced.
The body of work that could be outsourced was characterized in terms of
full-time equivalent positions, i.e., if it took 40 hours to perform a function
or group of functions, then one full-time equivalent position could be
outsourced.

The ASP
team then calculated the number of full-time equivalent employees that could be
retained to perform functions that would not be outsourced and tried, using
organizational charts, to redesign the structure of the CCO. As part of the redesigning process, the team
evaluated both supervisory and lower level positions.

Prior to
the redesign, CCO had 35 lower level employees who reported to five
supervisors. Those five supervisors
reported to the two directors, plaintiff and Mouck, who reported to the
executive director, Lahr. As part of the
redesign, the ASP team determined that it was unnecessary to have a layer of
management between the supervisors and the executive director, and the director
positions could be eliminated.

Using the
redesigned organizational structure, the ASP team made the determination as to
which employees would perform the retained functions. The ASP team eliminated 18 CCO positions,
including plaintiff’s.href="#_ftn2"
name="_ftnref2" title="">^>[2] Lahr and Daniel recommended that plaintiff be
terminated, and Patel concurred.href="#_ftn3"
name="_ftnref3" title="">^>[3]

On January
22, 2009, Lahr and Human Resources representative Maria Huntsberry informed
plaintiff that his position had been eliminated. When plaintiff arrived for work the following
Monday, he and two other CCO employees were locked out of the building.

At a
meeting for all CCO employees on January 27, Senior Officer David Hettlar
(Hettlar) said that no customer-facing jobs would be affected by
outsourcing. Plaintiff asked why his job
was affected, since it was 100 percent customer-facing. Hettlar said his situation was different, and
it would be better to address it offline.
In fact, none of plaintiff’s job functions were outsourced.

Plaintiff
was terminated as of March 27, 2009.
Within the next week, plaintiff learned a new Director of Credit
position had been created in CCO.
Plaintiff did not apply for the position.

Karen
Kerns, a former CCO manager, was promoted to the position of Director of Credit
and Collections in CCO. Hettlar and
Patel never discussed offering the job to plaintiff. Patel could not recall whether plaintiff was
considered for the position, and he could not think of any reason why plaintiff
would not be suitable to fill the position.

At a much
later date, there were talks about elevating another manager, Laura Bermudez,
to a director position. Bermudez had
attended some ASP meetings because she was knowledgeable about the SAP
workflow.



F. Sarbanes-Oxley
Act

Warner
Bros. is a publicly traded stock company.
Documents are prepared in CCO “relating to the Sarbanes-Oxley Act
(“SOX”) that relate to various processes in the CCO.” Operational reports are prepared “related to
the various processes performed in the CCO Dept.” on a daily and weekly basis
and reviewed monthly.

The
operational reports are reviewed by Patel, auditors, and others in Warner
Bros. The auditors check to make sure
the invoicing and pricing of credits are correct and that customer master
information is accurate.



>DISCUSSION



A. Standard of Review

Summary
judgment properly is granted if there is no question of material fact and the
issues raised by the pleadings may be decided as a href="http://www.mcmillanlaw.com/">matter of law. (Code Civ. Proc., § 437c, subd. (c); >Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 843.) To secure summary
judgment, a moving defendant may show that one or more elements of the cause of
action cannot be established or that there is a complete defense to the cause
of action. (Code Civ. Proc.,
§ 437c, subd. (p)(2); Aguilar, >supra, at p. 849.) The defendant must “demonstrate that under no
hypothesis is there a material factual issue requiring a trial.” (Rosenblum
v. Safeco Ins. Co. (2005) 126 Cal.App.4th 847, 856; accord, Guz v.
Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.)

Once the
moving defendant has met its burden, the burden shifts to the plaintiff to show
that a triable issue of material fact exists as to the cause of action or the
defense thereto. (Code Civ. Proc.,
§ 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra,
25 Cal.4th at p. 849.) All doubts as to
the propriety of granting the motion are resolved in favor of the opposing
party. (Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502.)

Additionally,
Code of Civil Procedure section 437c, subdivision (c), provides that “[i]n
determining whether the papers show that there is no triable issue as to any
material fact the court shall consider all of the evidence set forth in the
papers, except that to which objections have been made and sustained by the
court, and all inferences reasonably deducible from the evidence, except
summary judgment may not be granted by the court based on inferences reasonably
deducible from the evidence, if contradicted by other inferences or evidence,
which raise a triable issue as to any material fact.” The papers submitted by the parties must set
forth evidentiary facts. (>Sheppard v. Morgan Keegan & Co.
(1990) 218 Cal.App.3d 61, 67; see also Miller
v. Bechtel (1983) 33 Cal.3d 868, 874.)
“Mere conclusions of law or fact are insufficient to satisfy the
evidentiary requirements for a summary judgment.” (Perkins
v. Howard (1991) 232 Cal.App.3d 708, 713; Sheppard, supra, at p.
67.)

We review a
grant of summary judgment de novo to determine whether triable issues of
material fact exist. (>Wiener v. Southcoast Childcare Centers, Inc.
(2004) 32 Cal.4th 1138, 1142.) We
examine the facts presented to the trial court and determine their effect as a
matter of law. (Parsons v. Crown Disposal Co. (1997) 15 Cal.4th 456, 464; >Hagen v. Hickenbottom (1995) 41
Cal.App.4th 168, 172.) We may affirm a
summary judgment on any correct legal theory, even if the trial court relied on
a different theory to reach the same conclusion. (Carnes
v. Superior Court (2005) 126 Cal.App.4th 688, 694; California School of Culinary Arts v. Lujan (2003) 112 Cal.App.4th
16, 22.)



B. Wrongful Termination

In >Tameny v. Atlantic Richfield Co. (1980)
27 Cal.3d 167, the Supreme Court held that an employer’s right to discharge an
at-will employee is subject to limits imposed by fundamental public policy
concerns. (Id. at pp. 172, 178.) Public
policy concerns fall into four categories: termination for (1) refusing to
violate a statute; (2) performing a statutory obligation; (3) exercising a
constitutional or statutory right or privilege; and (4) reporting a statutory
violation for the benefit of the public.
(Green v. Ralee Engineering Co.
(1998) 19 Cal.4th 66, 76.) The public
policy must be “‘tethered to’ either a specific constitutional or statutory
provision,” it “must be ‘public’ in that it ‘affects society at large’ rather
than the individual, must have been articulated at the time of discharge, and
must be ‘“fundamental”’ and ‘“substantial.”’
[Citations.]” (>Ibid.)

The
Sarbanes-Oxley Act provides that “‘[n]o [publicly-traded company]
. . . may discharge, demote, suspend, threaten, harass, or in any
other manner discriminate against an employee in the terms and conditions of
employment because of any lawful act done by the employee (1) to provide
information, cause information to be provided, or otherwise assist in an
investigation regarding any conduct which the employee reasonably believes
constitutes a violation of [18 U.S.C] section 1341 [mail fraud], 1343 [wire
fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation
of the Securities and Exchange Commission, or any provision of Federal law
relating to fraud against shareholders, when the information or assistance is
provided to or the investigation is conducted by (C) a person with supervisory
authority over the employee (or such name="citeas((Cite as: 716 F.Supp.2d 539, *550">other person working for
the employer who has the authority to investigate, discover, or terminate
misconduct) . . . .’
18 U.S.C. § 1514A(a)(1)(C).”
(Sequeira v. KB Home (S.D.Tex.
2009) 716 F.Supp.2d 539, 549-550.) This
“whistleblower” protection “serves to ‘encourage and protect [employees] who
report fraudulent activity that can damage innocent investors in publicly
traded companies.’” (>Day v. Staples, Inc. (1st Cir. 2009) 555
F.3d 42, 52.)href="#_ftn4" name="_ftnref4"
title="">^[4]

The
reasonable belief requirement of Sarbanes-Oxley has both a subjective and an
objective component. (>Day v. Staples, Inc., >supra, 555 F.3d at p. 54.) The employee must make his complaints in
“subjective good faith,” that is, the employee must “‘actually believe[] the
conduct complained of constituted a violation of pertinent law.’” (Id.
at p. 54 and fn. 10.) The employee must
also have “an objectively reasonable belief that the conduct constituted
securities fraud or shareholder fraud,” specifically one of the types of fraud
specified in the act. (>Id. at pp. 54-55.)

In order
“[t]o have an objectively reasonable belief there has been shareholder fraud,
the complaining employee’s theory of such fraud must at least approximate the
basic elements of a claim of securities fraud.
‘Securities fraud’ itself has additional relevant elements. The elements of name="SDU_56">a cause of
action for securities fraud ‘resembl[e] . . . common-law tort actions
for deceit and misrepresentation.’
[Citation.] Those elements
typically include a material misrepresentation or omission, scienter, loss, and
a causal connection between the misrepresentation or omission and the
loss. [Citation.] Securities fraud under section 10(b) and Rule
10b–5 requires: ‘(1) a material misrepresentation or omission; (2) scienter;
(3) connection with the purchase or sale of a security; (4) reliance; (5)
economic loss; and (6) loss causation.’
[Citation.] The employee need not
reference a specific statute, or prove actual harm, but he must have an
objectively reasonable belief that the company intentionally misrepresented or
omitted certain facts to investors, which were material and which risked
loss.” (Day v. Staples, Inc., supra,
555 F.3d at pp. 55-56.)

Complaints
about internal company practices that may not maximize shareholder profit, may
result in a loss of revenue or cost the company money do not support an
objectively reasonable belief that shareholders have been or are likely to be
defrauded. (Day v. Staples, Inc., supra,
555 F.3d at p. 56.) Complaints about
internal practices which are not reported to shareholders likewise do not
support an objectively reasonable belief in shareholder fraud. (Id.
at p. 58.) Rather, the complaints “‘must
“definitively and specifically” relate to [one] of the listed categories of
fraud or securities violations under 18 U.S.C. [section] 1514A(a)(1).’” (Van
Asdale v. International Game Technology (9th Cir. 2009) 577 F.3d 989,
996-997; Welch v. Chao (4th Cir.
2008) 536 F.3d 269, 275.)

In granting
the summary judgment motion, the trial court found that plaintiff could not
“establish an essential element of his [Tameny]
cause of action—that his complaints were a protected activity.” The court explained: “Plaintiff claims that his complaints to
defendant were complaints for violations of the Sarbanes-Oxley Act, designed to
address a fraud on company shareholders that arose from plaintiff’s
supervisor’s alleged conflict of interest and taking of kickbacks in connection
with the supervisor’s relationship with a company called High Radius, which did
business with defendant and allegedly was owned by a friend of plaintiff’s
supervisor.

“Plaintiff’s
complaint was not sufficiently tethered to the statutory provisions of
Sarbanes-Oxley to be sufficiently ‘public,’ ‘substantial and fundamental’ to
support his Tameny claim here. He has not revealed any evidence showing that
he actually meant to address a Sarbanes-Oxley violation when he reported his
supervisor’s alleged conflict of interest to the company, or that any complaint
by him that Sarbanes-Oxley had been violated was subjectively or objectively
reasonable. The court would not expect
him to use particular ‘buzz words’ in making the complaint, but would expect
that the complaints to management would have been articulated in a way to
indicate some logical nexus to the provisions of Sarbanes-Oxley. It was not.”

Specifically,
the trial court found that plaintiff failed to show that he could present any
evidence that Patel’s “relationship with High Radius was something that he ever
reasonably would have expected to be disclosed to shareholders or relied on by
shareholders. Plaintiff has not pointed
to any portion of Sarbanes-Oxley that would require the relationship between
High Radius and his supervisor to be disclosed publicly. Therefore, he has not shown that he can
present evidence of any subjectively or objectively reasonable belief that
there would be a misrepresentation to shareholders or any intent by anyone to
induce reliance, or any causation of shareholder reliance or damages. Nor is there any indication that any loss of
corporate revenues that might have resulted from a conflict of interest would
have been sufficiently significant to be ‘material.’ These types of things would have to be needed
for there to have been a subjectively or objectively reasonable belief that a
shareholder fraud was threatened as a result of the supervisor’s alleged
conflict of interest or relationship with High Radius. (E.g.,
Day v. Staples, Inc.[, supra,]
555 F.3d [at pp.] 52-58.)
[¶] . . . [¶]

“An
employee’s mere concern that a corporate policy is wasteful, inefficient,
imprudent, risky, involves accounting or other financial irregularities, or
will result in reduced revenues due to things like crime or embezzlement, does
not automatically rise to the level of a Sarbanes-Oxley violation. [Citations.]
[¶] If it did, employees could
refuse to cooperate with, obstruct and resist all manner of management
decisions, reached through the exercise of management’s business judgment,
without fear of discipline or termination.
As the court stated in an analogous situation in Patten v. Grant Joint Union High School Dist.[, >supra, 134 Cal.App.4th at p.] 1385: “‘To exalt . . . exclusively
internal personnel disclosures with whistleblower status would create all sorts
of mischief. Most damagingly, it would
thrust the judiciary into micromanaging employment practices and create a
legion of undeserving protected ‘whistleblowers’ arising from the routine
workings and communications of the job site.’”

Plaintiff
argues that he complained to Warner Bros. that Patel “had an illegal conflict
of interest with a vendor called High Radius that was materially damaging the
company’s shareholders by: 1) siphoning off company resources to aid in its
start up; 2) allowing access to and theft of proprietary accounting
processes used to reconcile millions of dollars in accounts that were then
offered to business competitors; 3) ‘descoping’ a valuable reconciliation
tool in order to create a ‘gap’ to allow High Radius to create a fix, that
placed untold millions of dollars at risk because Patel’s conduct prevented the
CCO department from reconciling its vendor accounts; 4) which directly
implicated the company’s SOX compliance functions related to internal controls,
risk accrual and the quarterly audits to verify the company’s risk provision,
bad debt provision, debt reconciliation and to test the department’s
assumptions regarding debt reconciliation.”

Plaintiff’s
argument is not based on the evidence presented on summary judgment. Rather, he is attempting to transform his
complaints about Patel’s management and violations of company policy into
complaints about a Sarbanes-Oxley violation.

Plaintiff’s
initial complaints to HR were focused on Patel’s management of CCO, that Patel
was causing morale problems by setting unrealistic deadlines, imposing an
excessive workload, giving conflicting directives, and blaming subordinates for
his own mistakes. Among his other
complaints about Patel, plaintiff expressed his concern that CCO staff was
being used to start up High Radius.

When
plaintiff subsequently complained to Employee Relations and the legal
department, he expressed concern that Patel’s hiring of High Radius to develop
a tool for addressing returns was a bad business decision because CCO already
had an effective tool for that. He also
complained that WHV resources were used to form High Radius, and High Radius
was sharing WHV’s processes with other companies. Plaintiff believed that WHV could
“potentially lose a competitive advantage that [it] currently hold[s] over
other companies” if High Radius sold software that it created as a result of
its relationship with WHV to WHV’s competitors.
Plaintiff additionally complained that Patel had a kickback agreement
with High Radius, and that when WHV paid for Patel to attend credit industry
conferences, Patel spoke about High Radius.

In written
documents he submitted to Employee Relations and the legal department in early
2008, plaintiff wrote that he felt he was “required to come forward with the
information that [he] passed along [about High Radius] due to [his] signing
Warner Bros. Standards of Business Conduct, and Warner Bros. Conflict of
Interest documents.” In his July 21,
2008 email to Chapman and McNutt, plaintiff thanked them “for looking into the
High Radius situation, which appeared to violate company
policy . . . .” He
stated that he appreciated the fact Chapman told him that he “did exactly what
you would hope employees would do in these situations with regard to company
compliance issues.”

Plaintiff
wrote that he wanted to confirm that he met his obligations “to Warner Bros.
with regard to Warner Bros. compliance policies, such as, Conflicts of
Interest, Ethical Business Practices Agreement, Standards of Business Conduct,
Protecting Confidential Information, or any other policy to which I am
accountable. . . .” He
summarized his concerns as follows: (1)
“Have I fully met my obligation to the company on this matter?” (2) “Confirmation that sharing CCO process
flows with Sashi in Jan. 2006 was to be found in line with Company
policy?” (3) “Confirmation that pitching
High Radius processes developed by WHV to competitors is OK per Company
policy.”

Nothing in
the foregoing supports a finding that plaintiff believed in good faith that the
conduct complained of constituted shareholder fraud within the meaning of
Sarbanes-Oxley. (Day v. Staples, Inc., supra,
555 F.3d at p. 54 and fn. 10.) His
stated concerns were “Warner Bros. compliance policies, such as, Conflicts of
Interest, Ethical Business Practices Agreement, Standards of Business Conduct,
Protecting Confidential Information.” He
sought confirmation that Patel did not violate “Company policy.” None of his complaints related to the
specific types of shareholder fraud listed in Sarbanes-Oxley. (Van
Asdale v. International Game Technology, supra, 577 F.3d at pp. 996-997; Welch v. Chao, supra, 536
F.3d at p. 275.) His complaints about
violations of company policy do not support a subjectively reasonable belief in
shareholder fraud of the types specified in Sarbanes-Oxley. (Day,
supra, at pp. 56-58; see, e.g., >Platone v. U.S. Dept. of Labor (4th Cir.
2008) 548 F.3d 322, 326-327 [plaintiff’s complaints about billing discrepancies
without any attempt to tie them to a securities violation and shareholder fraud
insufficient establish a Sarbanes-Oxley violation].) Plaintiff’s belated attempt to tie his
complaints to Sarbanes-Oxley compliance finds no support in the evidence.

In
addition, there is nothing in the evidence which would support an objectively
reasonable belief that Patel’s conduct constituted mail fraud, wire fraud, bank
fraud or securities fraud. (>Day v. Staples, Inc., >supra, 555 F.3d at pp. 54-55; >Sequeira v. KB Home, >supra, 716 F.Supp.2d at pp.
549-550.) Plaintiff’s complaints, which
essentially were that Patel’s conduct was costing the company money and aiding
the company’s competitors, do not support an objectively reasonable belief that
shareholders have been or are likely to be defrauded. (Day,
supra, at pp. 56, 58.)

In sum, none
of the evidence plaintiff presented established a triable issue of material
fact as to whether plaintiff was terminated for complaining about a
Sarbanes-Oxley violation. The trial
court therefore did not err in granting summary judgment on his >Tameny cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar
v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 849.)



C. Completion
of Discovery

Code of
Civil Procedure section 437c, subdivision (h), provides: “If it appears from the affidavits submitted
in opposition to a motion for summary judgment or summary adjudication or both
that facts essential to justify opposition may exist but cannot, for reasons
stated, then be presented, the court shall deny the motion, or order a
continuance to permit affidavits to be obtained or discovery to be had or may
make any other order as may be just.”
If, and only if, the conditions of this subdivision are met, a
continuance or denial of the summary judgment motion is required. (Scott
v. CIBA Vision Corp. (1995) 38
Cal.App.4th 307, 313-314; Wachs v. >Curry (1993) 13 Cal.App.4th 616,
623.) In order to obtain a continuance
pursuant to subdivision (h) of Code of Civil Procedure section 437c, a party
must submit an affidavit showing: “(1) the facts to be obtained are essential
to opposing the motion; (2) there is reason to believe such facts may exist;
and (3) the reasons why additional time is needed to obtain these facts.” (Wachs,
supra, at p. 623.)

Plaintiff
contends that he was entitled to complete his discovery in order to obtain
information regarding Warner Bros.’s “investigation of the conflict of interest
charges against Patel; whether Warner Bros. believed Plaintiff’s complaints
were a ‘protected activity’; whether Plaintiff was retaliated against; the causal
link between reporting the conflict of interest and retaliation; and the issue
of pretext. These were crucial issues in
the case.”

We agree
with the trial court that “the materials sought cannot change the nature of the
complaint made by plaintiff and cannot affect the outcome of [the summary
judgment] motion. The court need not
reach the balance of the parties’ arguments, as the foregoing is
dispositive.” Plaintiff failed to make
the requisite showing, and the trial court did not err in refusing to grant a
continuance to plaintiff to complete further discovery.

DISPOSITION



The
judgment is affirmed. Warner Bros. is to
recover its costs on appeal.





JACKSON,
J.





We concur:







PERLUSS,
P. J.







ZELON,
J.