Wendy Cunning v. Skye Bioscience, Inc.
23-55248
| 9th Cir. | Oct 22, 2024Background
- Plaintiff Wendy Cunning alleged retaliatory termination by Skye Bioscience, Inc. under the Sarbanes Oxley Act and California Whistleblower Protection Act.
- Skye moved for judgment as a matter of law and for a new trial, both denied by the district court.
- The trial included contested admission of evidence, including rumors of board misconduct and a board member’s later guilty plea and SEC judgment.
- The district court also allowed evidence of Cunning’s emotional distress, both before and after her termination.
- The district court granted Cunning equitable tolling on the WPA statute of limitations as a matter of law.
- The Ninth Circuit vacated the judgment and remanded for a new trial due to evidentiary and legal errors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admission of rumor evidence | Rumors explained Cunning's state of mind; not admitted for truth | Rumors were hearsay and unfairly prejudicial | Admitting was proper for state of mind, not for the truth |
| Admission of board member’s guilty plea & SEC judgment | Showed Cunning’s concerns were legitimate | Highly prejudicial and irrelevant to her claim | Admission was reversible error – lacked probative value, prejudiced Skye |
| Emotional distress damages pre-termination | Relevant to overall harm caused by workplace environment | Only damages tied to termination are relevant | District court erred by admitting pre-termination distress; only termination-related evidence permitted |
| Equitable tolling of WPA statute of limitations | Entitled as a matter of law due to administrative action | Disputed facts, should be resolved by jury | Should be submitted to jury, not granted as a matter of law |
| Denial of bifurcation | No error; within trial court’s discretion | Should have bifurcated liability and damages | No abuse of discretion; issue left to court’s discretion on remand |
Key Cases Cited
- Janes v. Wal-Mart Stores Inc., 279 F.3d 883 (9th Cir. 2002) (de novo review standard for denial of judgment as a matter of law)
- Doe ex rel. Rudy-Glanzer v. Glanzer, 232 F.3d 1258 (9th Cir. 2000) (abuse of discretion for evidentiary rulings)
- United States v. Wiggan, 700 F.3d 1204 (9th Cir. 2012) (evidence of slight probative value should be excluded if prejudicial)
- Graves v. Arpaio, 623 F.3d 1043 (9th Cir. 2010) (trial management left to district court’s broad discretion)
- Dupree v. Younger, 598 U.S. 729 (2023) (preservation of purely legal issues for appeal)