Court reinstates IGT whistleblower suit

By Cy Ryan

Friday, Aug. 14, 2009 | 9:12 a.m.

A federal appeals court has reinstated a whistleblower suit against International Game Technology filed by a couple who claimed they were fired for reporting alleged fraud in a company merger.

The 9th U.S. Circuit Court of Appeals says Shawn and Lena Van Asdale, both lawyers hired in 2001 by IGT, should have a chance to present their case that information was withheld from IGT shareholders when it merged with Anchor Gaming.

The ruling overturns the decision of U.S. District Judge Robert A. McQuaid, who granted a pretrial summary judgment in favor of IGT, a major gaming supply company. The court also ordered the state suits by the Van Asdales reinstated.

Prior to the merger, the couple maintained they raised questions whether Anchor Gaming had an actual patent on a so-called “wheel” in a slot machine. The “wheel,” according to the court, was a valuable asset. There was a dispute between Anchor and Bally Gaming over the patient.

The Van Asdales suggest this question over the validity of the patent was never relayed by Anchor officials to shareholders of IGT. They say they informed IGT officials prior to the merger of the possibility that Anchor deal was overvalued because of the question on the patent, but the deal went forward.

After the merger, some top officials in Anchor were installed in IGT management. Shawn and Lena were then dismissed on grounds of poor performance.

Judge Jay S. Bybee, who wrote the unanimous opinion, said, “It is not critical to the Van Asdales’ claim that they prove that Anchor officials actually engaged in fraud in connection with the merger; rather the Van Asdales only need show that they reasonably believed there might be fraud and were fired for even suggesting further inquiry.”

Bybee said he was not suggesting that former Anchor officials actually did engage in wrongdoing prior to the merger.