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Parexel International Corp. v. Feliciano

December 3, 2008

PAREXEL INTERNATIONAL CORPORATION, PAREXEL INTERNATIONAL TRUST, AND BARNETT INTERNATIONAL, PLAINTIFFS AND COUNTERCLAIM DEFENDANTS,
v.
OSWALDO FELICIANO AND INNOVATIVE MEDIA MACHINE, INC., DEFENDANTS AND COUNTERCLAIM PLAINTIFFS.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM AND ORDER

Presently before the Court are Counterclaim Defendants' ("Defendants") Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial on the Sarbanes-Oxley claim, Defendants' Motion for Remittitur of the Punitive Damages Award or, in the Alternative, for a New Trial (Doc. No. 176), Counterclaim Plaintiffs' ("Plaintiffs") Response thereto (Doc. No. 179), Defendants' Reply (Doc. No. 188), Defendants' Supplement to Their Memoranda of Law in Support of Their Post-Trial Motions (Doc. No. 200), and Plaintiff's Response to Parexel's Supplement to its Post-Trial Motions (Doc. No. 201). For the reasons set forth below, Defendants' motions are DENIED.

BACKGROUND

In August of 2004, Parexel brought suit against former employee Oswaldo Feliciano and Innovative Media Machine, Inc. ("IMM") for tortious interference with contract relations, commercial disparagement, misappropriation of confidential or proprietary information, breach of contract and defamation. Feliciano, who worked as a Managing Systems Architect for Barnett,*fn1 brought counter-claims alleging that he was terminated for refusing to engage in illegal activity in violation of Pennsylvania public policy when requested to do so by his supervisor and in retaliation, in violation of the Sarbanes-Oxley Act of 2002 ("SOX"), for reporting his supervisor's allegedly illegal activities. Specifically, Feliciano claimed that Ann Carraher, Vice President of Barnett Educational Systems, wrongfully obtained the membership records of various private organizations and authorized the incorporation of these records into a Parexel marketing database. Between July of 2003 and October of 2003, Feliciano made complaints regarding the allegedly unlawful use of the database to various Barnett employees, including Ms. Carraher herself and Lisa Roth, head of Human Resources. Upon Ms. Roth's request, Lorrie Ferraro, Human Resources Director at Parexel, commenced an investigation of the matter which resulted in Ms. Carraher's termination in April of 2004. On June 21, 2004, Feliciano himself was terminated.

Counter-claim Defendants ("Defendants") contended that Feliciano was terminated because he had an undisclosed ownership interest in an outside company, in violation of the terms of his employment agreement. The company in question, IMM, provided services to Parexel during the course of Feliciano's employment, and it was alleged that Feliciano was involved in approving payments to IMM, but never disclosed his conflict of interest.

In an Order dated June 30, 2008, this Court granted summary judgment in favor of Counter-claim Plaintiff ("Plaintiff") on Defendants' claims of tortious interference, commercial disparagement, breach of contract and misappropriation of proprietary information. On September 4, 2008, the parties filed, and the Court signed, a Stipulation and Joint Motion for Entry of a Permanent Order that fully and finally resolved all claims asserted by Defendants against Plaintiffs. A trial commenced on the remaining claims on September 9, 2008. At the conclusion of trial, the jury found that Parexel had retaliated against Feliciano in violation of SOX and had terminated Feliciano's employment because he refused to engage in illegal conduct in violation of Pennsylvania public policy. The jury awarded Feliciano $94,000 in back pay and compensatory damages and $1.7 million in punitive damages on the wrongful termination claim. The jury also awarded IMM $45,000 for its breach of contract claim against Parexel.

At the conclusion of trial, Defendants moved for judgment as a matter of law on the SOX claim. Defendants have now renewed their motion for judgment as a matter of law or, in the alternative, for a new trial pursuant to Fed. R. Civ. P. 50(b) and have moved for remittitur of the punitive damages award or, in the alternative, for a new trial on the wrongful termination claim.*fn2

DISCUSSION

I. Defendants' Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial

A. Rule 50 Motion for Judgment as a Matter of Law

Upon the renewed motion of a party, a trial court may enter judgment as a matter of law after the conclusion of a jury trial if there was no "legally sufficient evidentiary basis" for the jury reasonably to have found for the opposing party. Fed. R. Civ. P. 50(a), (b). Such judgment may be entered "only if, as a matter of law, the record is critically deficient of that minimum quantity of evidence from which a jury might reasonably afford relief." Trabal v. Wells Fargo Armored Serv. Corp., 269 F.3d 243, 249 (3d Cir. 2001). Judgment as a matter of law should be granted sparingly and the Court may not weigh the evidence, determine the credibility of witnesses, or substitute its own version of the facts for that of the jury. Marra v. Phila. Housing Auth., 497 F.3d 286, 300 (3d Cir. 2007); Lightning Lube v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993). Rather, we must view the evidence in the light most favorable to the nonmoving party and, "giving it the advantage of every favorable inference," determine if "there is insufficient evidence from which a jury reasonably could find liability." Marra, 497 F.3d at 300.

Defendants have moved for the Court to enter judgment as a matter of law on Plaintiff's retaliation claim brought under Section 806 of the Sarbanes-Oxley Act of 2002 ("SOX"), codified at 18 U.S.C. § 1514A. Section 1514A provides protection for an employee of a publicly traded company who reports information that the employee reasonably believes constitutes mail fraud, wire fraud, bank fraud, or securities fraud, any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders.

18 U.S.C. § 1514A(a)(1).*fn3 To establish a retaliation claim under SOX, a plaintiff must prove by a preponderance of the evidence that (1) he engaged in protected activity or conduct, (2) his employer knew or suspected, actually or constructively, that he engaged in the protected activity, (3) he suffered an unfavorable personnel action, and (4) the circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the unfavorable action. 29 C.F.R. § 1980.104 (2004). To be protected, an employee's belief that the reported conduct violates one of the six enumerated categories must be both objectively and subjectively reasonable, however it need not be correct. Allen v. Administrative Review Bd., 514 F.3d 468, 477 (5th Cir. 2008). A mistaken but reasonable belief is still protected under SOX. Id.

Defendants assert that Plaintiff failed to introduce legally sufficient evidence to support his claim that he objectively reasonably believed that Defendants' theft of marketing contacts and continued use of the stolen marketing contacts violated any of the enumerated categories in Section 1514A. Defendants argue that to be protected under Section 1514A, Plaintiff must have reasonably believed that Defendants' conduct constituted the Black's Law Dictionary definition of fraud.*fn4 Specifically, Defendants claim that Plaintiff failed to present evidence that Defendants used the stolen marketing database to deceptively "induce another to act to his or her detriment." Defs.' Br. 9. Defendants claim that the misconduct reported by Plaintiff and presented to the jury "was at worst theft" and that Plaintiff never tried to prove that he reasonably believed that defendants used the stolen marketing contacts deceptively to "induce another to act to his or her detriment." ...


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