In  Garrabrants v. Erhart,  the Court of Appeal addressed privacy rules within the context of a whistleblower’s use of purportedly private information of another employee to blow the whistle.  The facts were as follows:

Charles Matthew Erhartwasan internal auditor at BofI Federal Bank (BofI) who “blew the whistle” on his employer. Erhart copied, transmitted to multiple regulatory authorities, and subsequently retained various documents he believed evidenced possible wrongdoing, some of which contained the personal and confidential information of BofI’s Chief Executive Officer (CEO), Gregory Garrabrants.  Garrabrants sued Erhart for accessing, taking, and subsequently retaining his personal information.  By special verdict, a jury awarded Garrabrants $1,502 on claims for invasion of privacy, receiving stolen property in violation of Penal Code section 496 subdivision(a), and unauthorized access to computer data in violation of Penal Code section 502 subdivision (c).  Post-judgment, the trial court awarded Garrabrants (1) costs totaling $65,887.34as the prevailing party,and (2) attorney fees totaling $1,314,260 pursuant to Penal Code sections 496, subdivision (c) and 502, subdivision (e)(2)

The Court of Appeal reversed, finding that privacy is context-specific and the CACI instruction failed to account for whether whether a bank president had a reasonable expectation of privacy in his financial records which he knew would be audited to comply with regulatory requirements.

In this consolidated appeal, Erhart seeks complete reversal of the judgment due to (1)purported prejudicial errors of law in the jury instructions, (2) the trial court’s refusal to instruct on requested “whistleblower” affirmative defenses, and (3)the court’s alleged abuse of discretion in restricting evidence of Erhart’s whistleblowing activities. He also requests reversal of the award of costs and attorney fees to Garrabrants. As to his appeal of the judgment, we conclude Erhart’s first argument is meritorious. In our view, the contested special instructions requested by Garrabrants contained erroneous statements of law. First, the trial court erred in instructing the jury that bank customers have an unqualified reasonable expectation of privacy in financial documents disclosed to banks. While California recognizes a constitutional right to privacy in financial matters, whether an expectation of privacy is reasonable in any given situation is a contextual and fact-specific determination. Second, the trial court erred in instructing the jury that Erhart’s whistleblower justification defense depended on proving at least one legally unsupported element.  Third, the instructions given for Penal Code section 496 misstated the law by defining “theft” in a manner that essentially renders receiving stolen property a strict liability offense. Fourth, the special instruction on Penal Code section 502erroneously removed from the jury’s consideration the foundational issue of whether Garrabrants “owned” the data about him residing in BofI’s computer systems such that he could pursue a civil action under the statute. In light of the record evidence, we further conclude there is a reasonable possibility a jury could have found in Erhart’s favor on each of Garrabrants’ claims absent the erroneous instructions, making them prejudicial. We thus reverse the judgment in all respects, including its award of costs and fees to Garrabrants ,and remand. We accordingly dismiss as moot Erhart’s appeal to the attendant award of costs and fees.