Sunday, April 4, 2010

News America Whistleblower Emmel Files Appellate Brief Challenging Injunction

On Friday, former News America Marketing employee and whistleblower Robert Emmel filed his opening brief appealing a district court's imposition of an injunction barring him from disclosing confidential News America information.

Mr. Emmel had complained to government authorities about News America Marketing's anti-competitive business practices prior to his termination by News America in 2006. He shared information about News America with government authorities until he signed a non-disclosure agreement with News America after his termination. His last disclosure was a letter he sent to the investigative counsel for the Senate Judiciary Committee the day before signing the non-disclosure agreement.

News America wanted to prevent Mr. Emmel from serving as a witness in several lawsuits pending against News America, and filed suit against Emmel alleging that he unlawfully shared the information, and that he unlawfully kept an electronic copy of numerous News America documents. The pending lawsuits against News America were filed by News America competitors Floorgraphics, Valassis, and Insignia Systems, each of which alleged that News America had engaged in anti-competitive business practices, consistent with Mr. Emmel's allegations.

Although News America's attorneys had possession of Mr. Emmel's documents, they did not timely disclose those documents to Floorgraphics in discovery. When Mr. Emmel revealed the existence of the documents, Floorgraphics was able to use the documents and his live testimony in its trial against News America, which ended in a $29.5 million settlement. Valassis later won a $300 million judgment against News America in state court, and settled that lawsuit and related suits for $500 million. Mr. Emmel appeared at the Valassis trial via a videotaped deposition. The Insignia lawsuit is scheduled for trial later this year.

In News America's suit against Mr. Emmel, the lower court found that Mr. Emmel's mailing the day before signing the non-disclosure agreement was in breach of the agreement. The court entered an injunction against Mr. Emmel barring him from disclosing any News America information. The court also found that a jury trial was required on the issue of whether News America was entitled to any of its attorneys' fees in the case, which exceeded $1.5 million. In response, Mr. Emmel declared bankruptcy.

In his appeal, Mr. Emmel argues that the non-disclosure agreement was not intended to apply retroactively to the mailing, and he argues that News America failed to prove that the mailing was ever received. Further, he states that disclosure to government authorities of alleged wrongdoing is protected on public policy grounds, that the injunction is overly broad, and contrary to his rights under the First Amendment.

While it appears that Mr. Emmel's appeal may have merit, it is unclear whether he will receive a ruling on his appeal before the Insignia v. News America trial at which he could potentially serve as a witness.


The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies

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