# Amicus Curiae Brief — Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 43 (2017) (No. 16-1276)

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0745%3A05

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2017

## Text

No. 16-1276

Supreme Court of the United States

DIGITAL REALTY TRUST, INC.,

Petitioner,

v.
PAUL SOMERS,
Respondent.

On PETITION FoR A Writ OF CERTIORARI TO THE
U.S. Court or APPEALS FOR THE NINTH Circurr

BRIEF OF THE CHAMBER OF COMMERCE
OF THE UNITED STATES OF AMERICA
AS AMICUS CURIAE IN SUPPORT

OF PETITIONER
KaTE COMERFORD Topp STEVEN J. PEARLMAN
Sreve P. LEHOTSKY Counsel of Record
JANET GALERIA Epwarp C. YOUNG
U.S. CHAMBER PROSKAUER Rose LLP
LITIGATION CENTER, INC. 70 W. Madison, Suite 3800
1615 H Street, N.W. Chicago, IL 60602
Washington, D.C. 20062 (312) 962-3550
(202) 463-5337 spearlman@proskauer.com

Counsel for Amicus Curiae

Libeary of Congee=
8 oes EL rery

i

TABLE OF CONTENTS

Page
pe Re Be oy. er er i
pe OE ete yg 6 lt «Sr ere ii
INTEREST OF AMICUS CURIAE .............54. }
INTRODUCTION AND SUMMARY OF THE
IES 65 oc awa e335 Nadpae es cawakernenetes 2
PINES 5 aire S6a'se Caw scd bers cen eedaseeNt: 3
I. The Ninth Circuit’s Decision Is Incorrect and
Deepens A Conflict Among The Circuits... .... 3
Il. The Ninth Circuit’s Decision Presents
An Issue of Exceptional Importance .......... 9

Be nee reer re an eraees eee 13

il

TABLE OF AUTHORITIES
Page

CASES
Ahmad v. Morgan Stanley & Co.,

2. Sapp. 34 401 G.IDN.Y. S014)... 2c cieeccss 8
Asadi v. G.E. Energy (USA), LLC,

720 F.3d 620 (6th Cir. 201%)... ........000. 3, 5, 6, 7
Banko v. Apple Tnc.,

20 F. Supp. 3d 749 (N.D. Cal. 2013) .............6. 7
Berman v. Neo@Ogilvy LLC,

OE Fe Bie Ge Cee SOD ons Wee scceesevesss 3,7
Bilski v. Kappos,

ee Oe Es ccaccehes ures edebetnean 1
Bullock v. BankChampaign, N.A.,

Se as CI ce cS ve itetas eaesdaeee en g
Bussing v. COR Clearing, LLC,

20 F. Supp. 3d 719 (D. Neb. 2014)................. 8
Connolly v. Remkes,

No. 14-ev-01344, 2014 WL 5473144

Se Se CU EE Sac oeapsucs vassncecs 7-8

Davies v. Broadcom Corp.,
130 F. Supp. 3d 1843 (C.D. Cal. 2015) ............. 6

ill

Deykes v. Cooper-Standard Auto., Inc.,
No. 16-ev-11828, 2016 WL 6873395

(E.D. Mich. Nov. 22, 2016). ..............

Dressler v. Lime Energy,
No. 14-cv-07060, 2015 WL 4773326

CRAs NEN SI MIND x -6.co so ew 6 oe wees Ss

Duke v. Prestige Cruises Int'l, Inc.,
No. 14-ev-23017, 2015 WL 4886088
(S.D. Fla. Aug. 14, 2015), appeal filed,
No. 16-cv-15426, 2015 WI. 4886088

tho Te ee ee

Egan v. TrudingScreen, Inc.,
No. 10-ev-8202, 2011 WL 1672066

2 Rok a |) A

Ellington v. Giacoumakis,

977 F. Supp. 2d 42 (D. Mass. 2013)........

Englehart v. Career Educ. Corp.,
No. 14-cv-444, 2014 WL 2619501

CEE 0 . Uilg OE on ccc nennceecers

Genberg v. Porter,

934 F. Supp. 2d 1094 (D. Colo. 2013), aff'd im
part on other grounds and dismissed in part,
566 Fed. App’x. 719 (10th Cir, 2014).......

Page

aTeT ere 6

sete bke 8

iv

Kansas v. Marsh,

EE RA SE a cet en vincvennngerecsssis

Khazin v. TD Ameritrade Holding Corp.,
No. 13-ev-4149, 2014 WL 940703 (D.N.J.
Mar. 11, 2014), aff'd on other grounds,

773 F.3d 488 (8d Cir. 2014) ..... 2. cece eee eee

Kramer v. Trauns—Lux Corp.
No. 11-ev-1424, 2012 WL. 4444820

ee ee ere

Kuhns v. Ledger,

202 F. Supp. 3d 433 (S.D.N-Y. 2016). ....-......

Lamb v. Rockweti Automation, Inc.,
No. 15-ev-1415, 2016 WL 4273210

(E.D. Wis. Aug. 12, 2016).............0..008:

Lutzeter v. Citigroup Inc.,
No. 14-cv-183, 2015 WL 7306443

Ci Se BGM o 6 ino wets cvewwakene

Murray v. UBS Sec., LLC,
No. 12-ev-5914, 2013 WL 2190084

GR ARES. SEM BAp MD oo cdverscecuseneces

Noliner v. S. Baptist Convention, Inc.,

852 F. Supp. 2d 986 (M.D. Tenn. 2012) ........

rr.

Olekanma. v. Wolfe,
No. 15-cv-0984, 2017 WL 784121

Cee ee NG a ok 6d weeeecinteces os

Peters v. LifeLock Inc.,
No. 14-ev-00576, 2014 WL 12544495

Ch Artes le Oe cee snes

Puffenbarger v. Engility Corp.,

151 F. Supp. 3d 661 (B.D. Va. 2015) ...........

Rosenblum v. Thomson Reuters (Mkts) LLC,

984 F. Supp. 2d 141 (S.D.N.Y. 2013)...........

Sarkisov v. Stonemor Partners L.P.,
No. 13-cv-04834, 2014 WL 12644016

Co IS: 6 a n dood cwewaane

Somers v. Digrttal Reality Trust, /nc.,

850 F.3d 1045 (9th Cir. 2016). ................

Verble v. Morgan Stanley Smith Barney, LLC,
148 F. Supp. 3d 644 (.D. Tenn. 2015), affd on
other grownds, No. 15-ev-6397, 2017 WL 129040
(6th Cir. Jan. 13, 2017), cert. dented, No. 16-cv-

946, 2017 WL 434012 (U.S. Mar. 20, 2017) .....

Verfuerth v. Orion Hnergy Sys., Inc.,

65 F. Supp. 3d 640 (E.D. Wis. 2014)...........

oe

Page

Wadler v. Bio-Rad Labs., lie.,

141 F. Supp. 3d 1005 (N.D. Cal. 2015), motzon

to certify appeal denied, No. 15-cv-02356,

2015 WL 8753292 (N.D. Cal. Dee. 15, 2015)........ 7
Wagner v. Bank of Am. Corp.,

No. 12-ev-00381, 2013 WL 3786643

(D. Colo. July 19, 2013), affd on other grounds,

571 F. App’x 698 (10th Cir. 2014) ......... 2.64055. 7
Wiggins v. ING U.8., Inc.,

No. 14-ev-01089, 2015 WL 8779559

Co ED, hc cad ee b occu vi¥ae we dwn 7
Yang v. Navigators Grp., Inc.,

18 F. Supp. 3d 519 (S.D.N.Y. 2014) ................ 8
Yates v. United States,

Se EES os cic eeu n ox boekn cde crews vie 1]
STATUTES
aE cine ine cnslnwe hep anseemad 3, 3, 6, 7
Me OA eh Ris obs ce kia curv resceas 2,4, 5,6
te PN alia anc cca ite 9 ae nse «othe t aed 4

Pe Gees SE oisiion wha eke ee beeen kre ekea' li

vii

Page
16 USA. § TOu-CORIMAD so vnc acvescviiesvesaae 5,6
16 U.S.C. § T6u-GORMI MD) . 02 ce cccccenncscccsens 5
1G UBL. § THa-CO I) oc ccc cvvenssesannneny 5
IB. UBL. § TOn-CID s os cc ccocsecnsuunueenan
1B URAL, § 1GRCAD ono dsce vk aces neeneeoeeeee 9
18 U.S.C. § ISRGAGD ioe civievncetsecsberceeeeeene 9
18 U.S. § ICAO i cess scsuvevespasaul 10
1S U.S. § IGIGAIRIMAD oo ioe cicesdsvecs caeneues 10
18 UBL. § 1GIGACIIED ioc cccndcackescs¥axeu 10
18 U.S.C. § UAAGIGRAAD. oo cccecvctetsvaenenmona 10
18 U.S.C. § 1GAGAGIUIERD. «ooo cannsacwatnewenel 10
1S UBC. 3 IGA AGGIEA...< 06 sicwnideuescotdeupenane 10
49 U.S.C. § SEED os se ec nt ch pn ctnen tae 10

OTHER AUTHORITIES

29 C.F... FOS IGOR IOS 6 cccoscess visnsvaree humane 10

vill

Page
becca ccdieecnssccseceves 10
i svcd ees Wiese cccscrscces 10
I sr cnc ceccccesveernescones 10
UIE ELE ccc aces cccccscecvreveccees 10
156 Cong. Rec. $5929 (daily ed. July 15, 2010)......... 4
H.R. 4173, 11]th Cong. § 922(e)(1) (2010) ............ 10
eee 3
ncaa Gwewesncsecdeesecccese l
re awe eecectetestene 1

Mark J. Oberti, Employment Law: Recent
Developments in Retaliation and
Whistleblowing Law, 69 The Advocate 31 (2014). . .11

Occupational Safety and Health Administration,
CPL 02-03-007, Whistleblower Investigations
ee ee Wicd ees ccevecscesers 12

]
INTEREST OF AMICUS CURIAE'

The Chamber of Commerce of the United States
of America is the wor!d’s largest business federation.
It represents 300,000 direct members and indirectly
represents the interests of more than three million
companies and professional organizations of every size, in
every industry sector, from every region of the country.
An important function of the Chamber is to represent
the interests of its members in matters before Congress,
the Executive Branch, and the courts. To that end, the
Chamber regularly files amicus ewrtae briefs in cases that.
raise issues of concern to the Nation’s business community.

The Chamber's members have a strong interest in the
application of the “whistleblower” provisions of the Dodd-
Frank Wall Street Reform and Cunsumer Protection Act
of 2010 (““Dodd-Frank Act” or “Act”) in accordance with
the terms of the statute and the purposes of the Act,
and in the speedy dismissal of whistleblower retaliation
claims that fall outside the Act’s scope. Meritless claims
and expanding litigation costs have a direct impact on the
viability, growth, and survival of businesses nationwide.

1. Pursuant to this Court’s Rule 37.2(), all partics have
consented to the filing of this brief. Counsel of record for all parties
received notice at least 10 days prior to the due date of Amicus
Curiae’s intention to file this brief. Pursuant to Rule 37.6, Amicus
Curiae atfirms that no party or party’s counsel authored this brief
in whole or in part. And nu party, party’s counsel, or other person
other than Amicus Curiae, iis counsel, and its members made a
monetary contribution intended to fund this brief’s preparation
or subrnission.

2

The interpretation of the Dodd-Frank Act espoused
by the Ninth Circuit in this case would greatly expand the
number of employees authorized to pursue the enhanced
remedies of the Act, and the period of time in which they
may sue for alleged retaliation, without yielding the law
enforcement benefits Congress intended when it enacted
a “bounty” and heightened protections for persons who
complain to the Securities and Exchange Commission.
The carefully crafted procedures established in 2002
in the Sarbanes-Oxley Act would become largely moot
and obsolete under the Ninth Circuit’s interpretation,
depriving Chamber members of the limitations and
protections established by that earlier law.

INTRODUCTION AND SUMMARY
OF THE ARGUMENT

The l)odd-Frank Act defines “whistleblower” to mean
“any individual who provides, or 2 or more individuals
acting jointly who provide, information relating to a
violation of the securities laws to the Commission.” 15
U.S.C. § 78u-6(a\6) (emphasis added). This case presents
the question whether an individual] who does not satisfy
the express statutory definition of “whistleblower” may
nevertheless seek relief under the Act’s anti-retaliation
protections for whistleblowers.

This issue is important, frequently recurring, and the
subject of a split among the federal courts of appeals. The
Fifth Circuit has correctly held that the Dodd-Frank Act’s
anti-retaliation provision protects only “whistleblowers” —
i.e., individuals who provide information relating to a
violation of the securities laws to the Securities and
Exchange Commission (“SEC” or the “Commission”.

3

See Asadi v. G.E. Energy (USA), LLC, 720 F.3d 620 (5th
Cir. 2013). By contrast, divided panels of the Ninth and
Second Circuits have held that the Dodd-Frank Act’s
anti-retaliation provision protects all those who report to
the SEC and those who report internally. See Somers v.
Digital Realty Trust, Inc., 850 F.3d 1045 (9th Cir. 2016);
Berman v. Nea@Ogtivy LLC, 801 F.3d 145 (2d Cir. 2015).

The interpretation of the Dodd-F rank Act espoused by
the Ninth and Second Circuits has profound implications
for employers across the country and in every industry.
If allowed to stand, it would severely disrupt the carefully
constructed anti-retaliation programs established by
Congress, and open the door to countless lawsuits that
Congress never intended Dodd-F rank to cover.

For these and additional reasons discussed below, this
Court should grant the petition for certiorari and reverse
the decision below.

ARGUMENT

I. The Ninth Cireuit’s Decision Is Incorrect and
Deepens A Conflict Among The Circuits

The Dodd-Frank Act sought to further enforeement
of the securities laws by establishing a “bounty” for
“whistleblowers” who provide information to the SEC that
leads to successful enforcement actions. 15 U.S.C. § 78u-6;
see S. Rep. No. 111-176, at 110 (2010) (“The Whistleblower
Program aims to motivate those with inside knowledge to
come forward and assist the Government to identify and
prosecute persons who have violated securities laws and
recover money for victims of financial fraud.”’).

4

A “whistleblower” is defined in the Act as:

[A|jny individual who provides, or 2 or more
individuals acting jointly who provide,
information relating to a violation of the
securities laws to the Commission, in a manner
established, by rule or regulation, by the
Commission.

15 U.S.C. § 78u-6(a)(6) (emphasis added).

Whistleblowers who assist in successful enforeement
actions are entitled to recover 10-30% of “what has been
collected of the monetary sanctions imposed in th[at]
action.” § 78u-6(b)(1).*

In addition to granting this bounty to “whistleblowers,”
the Act also protects them from retaliation, providing:

No employer may discharge, demote, suspend,
threaten, harass ... or in any other manner
discriminate against[{] a whistleblower in the
terms and conditions of employment because
of any lawful act done by the whistleblower—-

(i) in providing information to the Commission in
accordance with this section;

2. See 156 Cong. Ree. 85929 (daily ed. July 15, 2010)
(statement of Sen. Chris Dodd) (“The Congress intends that the
SEC make awards that are sufficiently robust to motivate potentia!
whistleblowers to share their information and to overcome the
fear of risk of the loss of their positions. Unless the whistleblowers
come forward, the Federal Government will not know about the
frauds and miseconduct.”).

5

(ii) in initiating, testifying in, or assisting in any
investigation or judicial or administrative action
of the Commission based upon or related to such
information; or

(iii) in making disclosures that are required or
protected under the Sarbanes-Oxley Act of 2002
(15 U.S.C. § 7201 et seq.), this chapter, including
section 78j-1(m) of this title, section 1513(e) of
Title 18, and any other law, rule, or regulation
subject to the jurisdiction of the Commission.

§ 78u-6(h)(1)(A) (emphasis added). Whistleblowers who
experience retaliation in violation of this provision may
sue directly in federal district court as many as 10 years
after the retaliatory action, and monetary damages are
doubled. § 78u-6(h)(1)(B)(i), (h)(1)(B)Gii), (AYC)(C) Gi).

The language of Section 78u-6 unambiguously
provides a cause of action only to individuals who have
provided information to the SEC. ‘I'he statute clearly
defines “whistleblowers” as those who “provide| |
information relating to a violation of the securities laws
to the Commission, in a manner established” by the
Commission’s whistleblower “bounty” rules. § 78u-6(a)(6).

And the Fifth Circuit correctly applied the statute
according to its plain terms in Asudi v. G.E. Energy
(USA), LLC, 720 F.3d 620 (5th Cir. 2013).

In Asadi, an employee made an internal report
reyarding a potential violation of securities laws, but did
not report the potential violation to the SEC. Jd. at 621.
‘The employee was later discharged and filed a complaint

6

in district court, alleging a violation of Dodd-Frank’s anti-
retaliation provision. Jd. The district court dismissed the
complaint, but did not reach the issue regarding the scope
of Dodd-F rank’s anti-retaliation provision. Jd.

The Fifth Circuit affirmed, holding that Dodd-Frank’s
anti-retaliation provision protects only individuals who
report information to the SEC. The court explained
that. the “whistleblower” definition in Section 78u-6(a)(6)
establishes “who is protected,” while the anti-retaliation
provision in Section 78u-6(h)(1)(A) specifies “what
actions” taken by that person are protected. /d. at 624-
26. The court stressed that any other reading of Section
78u-6 “would read the words ‘to the Commission’ out
of the definition of ‘whistleblower’ for purposes of the
whistleblower-protection provision.” /d. at 628, The court
declined to defer to the SEC’s regulation because the
statute is “unambiguous },” and because the regulation
“redefines ‘whistleblower’ more broadly” than the statute.

Id. at 629-30.*

3. At least twelve district courts have followed the Fifth
Circuit’s interpretation. See Olekanma v. Wolfe, No, 15-ev-0984,
2017 WI. 784121, at *3 (D. Md. Mar. 1, 2017); Deykes v. Cooper-
Standard Auto., Inmc., No. 16-ev-11828, 2016 W L 6873395, at *2-4
(E.D. Mich. Nov. 22, 2016); Lamb v. Rockwell Automation, Inc.,
No. 15-cv-1415, 2016 WL 4273210, at *3-4(E.D. Wis. Aug. 12, 2016);
Puffenburger v. Engility Corp., 151 F. Supp. 3d 651, 663-65 (F..D.
Va. 2015); Verble v. Morgan Stanley Smith Barney, LLC, 148 F.
Supp. 3d 644, 640 (#.D. Tenn. 2015), aff'd on other grounds, No.
15-ev-6397, 2017 WL 129040 (6th Cir. Jan. 13, 2017), cert. denied,
No. 16-ev-946, 2017 WL 434012 (U.S. Mar. 20, 2017); Davies v.
Broadcom Corp., 130 F. Supp. 3d 1343, 1348-49 (C.D. Cal. 2015);
Duke v. Prestige Cruises Int'l, Inc., No. 14-cv-23017, 2015 WL
4886088, at *3 (8.1. Fla. Aug. 14, 2015), appeal filed, No. 16-cv-
15426, 2015 WI. 4886088 (llth Cir. Aug 11, 2016); Verfuerth v.

7

The Seeond and Ninth Circuits have expressly
rejected Asadi, deviating from the plain terms of the
statute. In Berman v. Neo@Ogilvy LLC, a divided panel
of the Second Circuit held that Section 78u-6 is ambiguous
and deferred to the SEC’s regulation extending protection
to anyone who makes a report, whether the report is made
internally or to the SEC. 801 F.8d at 146 (concluding
that “the pertinent provisions of Dodd-Frank create
a sufficient ambiguity to warrant our deference to the
SEC’s interpretive rule”), In the decision below, a divided
panel of the Ninth Circuit went even further and held that
Dodd-Frank unambiguously compels the interpretation
adopted by the SEC. Somers, 850 F.3d at 1047 (concluding
that “the SEC regulation correctly reflects congressional
intent to provide protection for those who make internal
disclosures as well as to those who make disclosures to
the SEC”).*

Orion Energy Sys., Inc., 65 F. Supp. 8d 640, 643-46 (E.D. Wis.
2014); Sarkisov v. Stonemor Partners L.P., No. 13-ev-04834, 2014
WL 12644016, at *3-4 (N.D. Cal. June 25, 2014); Anglehart »v.
Career Educ. Corp., No. 14-cv-444, 2014 WL 2619501, at *9 (M.D.
Fla, May 12, 2014); Banko v. Apple /nc., 20 F. Supp, 3d 749, 756-57
(N.D. Cal. 2013); Wagner v. Bank of Am. Corp., No. 12-ev-00381,
2013 WL 3786648, at *4-6 (D. Colo. July 19, 2013), aff'd on other
grounds, 571 F. App’x 698, (10th Cir, 2014),

4. Atleast eighteen district courts have followed the Second
and Ninth Circuits, See Kuhns v. Ledger, 202 F. Supp. 3d 433, 438
n.1 (S.D.N.Y. 2016); Wiggins v. ING US., Inc., No. 14-ev-01089,
2015 WL 8779559, at *1 (D. Conn. Dec. 15, 2015); Lutzeier ».
Citigroup Inc., No. 14-ev-188, 2015 WL 7306443, at *2 (B.D. Mo.
Nov. 19, 2015); Wadlerv. Bio-lad Labs., Inc., 141 F. Supp. 3d 1005,
1024-27 (N.D. Cal. 2015), motion to cerlify appeal denied, No. 15-
ev-02356, 2015 WI 8758292 (N.D. Cal. Dec. 15, 2015); Dressler v.
Lime Energy, No. 14-ev-07060, 2015 WL 417733826, at *6-16(D.N.J.
Aug. 13, 2015); Connolly v. Remkes, No. 14-ev-0'1344, 2014 WI.

8

The SEC and these Circuits misapprehend the
structure of the statute. In finding that the protections
of clause (iii) of the anti-retaliation provision extend
coverage to a wider class of persons than the Act’s
definition of “whistleblower,” they flip the statute's
language: their approach makes what ihe retaliation
was for determinative of who is protected, rather than
first determining who is protected under the statutory
definition of “whistleblower.” The “whistleblower”
definition governs clause (iii), not vice versa.

This circuit split should be resolved as speedily as
possible. The conflict between the Fifth Circuit on the
one hand, and the Second and Ninth Circuits on the other,
creates an uneven playing field for employers, subjecting
them to vastly different risks based on their geographic

5473144, at *4-6(N.D. Cal. Oct. 28, 2014); Peters v. LyeLock Inc.,
No, 14-cv-00576, 2014 WL 12544495, at *3-7 (D. Ariz. Sept. 19,
2014); Bussing v. COR Clearing, LLC, 20 F. Supp. 3d 719, 727-33
(D. Neb, 2014); Yang v. Navigators Grp., Inc., 18 F. Supp. 3d 519,
531-84 (S.D.N.Y. 2014); Khazin v. 7D Ameritrade Holding Corp.,
No. 18-ev-4149, 2014 WL 940703, at *3-6 (D.N.J. Mar. 11, 2014),
aff'd on other grounds, 773 V.3d 488 (38d Cir. 2014); Ahmad v.
Morgan Stanley & Co., 2 F. Supp. 3d 491, 496 n.5 (S.D.N.Y 2014);
Rosenblum v. Thomson Reuters (Mkts) LLC, 984 F. Supp. 2d 141,
146-48 (S.D.N_Y. 2013); Bllington v. Giacowmakis, 977 F. Supp. 2d
42, 44-46 (D. Mass. 2013); Murray v. UBS Sec., LLC, No. 12-ev-
5914, 2013 WL 2190084, at *3-7(S.D.N.Y. May 21, 2012); Genberg
v, Porter, 935 F. Supp. 2d 1094, 1106-07 (D. Colo, 2013), aff'd in
part on olhker yrounds and dismissed in part, 566 K’ed. App’x, 719
(10th Cir. 2014); Kramer v. Trans-Lux Corp., No. 1L-ev-1424, 2012
WL 4444820, at *4(D. Conn. Sept. 25, 2012); Nollner v. 8. Baptist
Convention, Inc., 852 F, Supp. 2d 986, 992-95 (M.D. Tenn. 2012);
Egan v. TradingSereen, Inc., No. 10-cv-8202, 2011 WL 1672066,
at *3-5 (S.D.N.Y. May 4, 2011).

9

location alone. See Bullock v. BankChampaign, N.A.,
133 8S. Ct. 1754, 1761 (2018) (“[1)]t is important to have a
uniform interpretation of federal law”); Kansas v. Marsh,
548 U.S. 163, 183 (2006) (Scalia, J., concurring) (“Our
principal responsibility .. . is to ensure the integrity
and uniformity of federal law”)). So long as the decision
below is left uncorrected, employers in the Second and
Ninth Circuits face the threat of liability for claims that
Congress never intended.

Il. The Ninth Circuit’s Decision Presents An Issue of
Exceptional Importance

The Ninth Circuit’s counter-textual interpretation
of the Dodd-Frank Act, if left to stand, wil! result in a
number of harmful consequences. Among them, it will
undermine the carefully constructed anti-retaliution
provisions and procedures of the Sarbanes-Oxley Act,
and impose unwarranted litigation costs on employers.

Less than 10 years before enacting the Dodd-Frank
Act, Congress established a comprehensive regime to
protect, among others, the “internal” whistleblowers that
the Ninth Circuit sought Lo cover with its reading of Dodd-
Frank. [n the Sarbanes-Oxley Act, Congress authorized
employees to file a complaint with the U.S. Department
of Labor (“DOL”) if they believe they have suffered
retaliation for reporting, internally or externally, mail
fraud, wire fraud, bank fraud, securities fraud, a violation
of any rule or regulation of the SEC, or any provision of
federal law relating to fraud against sharcholders. 18
U.S.C. § 1514 A(a)-(b). The complaint is investigated by the
Occupational Safety and Health Administration “OSHA”),
which renders findings and may order reinstatement of

10

an employee who has been improperly removed from his
or her position. 18 U.S.C. §§ 1514A(b)(2)(A), (@)(2)(A); 29
C.F.R. Part 1980,104.

Kither party may appeal OSHA’s decision to an
Administrative Law Judge (“ALJ”), who will permit
discovery, conduct a bench trial, and issue a decision that
may be appealed to the Administrative Review Board
(“ARB”). 29 C.F.R. Parts 1980.106, 107, 109, 110. An ARB
decision may be appealed to a federal court of appeals.
18 U.S.C. § 1514A(b)(2)(A); 49 U.S.C. § 42121(b)4). If a
final DOL decision does not issue within 180 days of the
employee's initial complaint, the complainant has the
option of removing the case to a federal district court,
where they may proceed de novo. 18 U.S.C § 1514A(b)(1)
(B).

The Sarbanes-Oxley regime imposes important
constraints. It provides for initial investigation by the
DOL, which can lead to the prompt termination of baseless
claims. Resolution within the Department is the preferred
outcome, although complainants may “kick-out” the case
to federal court in certain circumstances. The limitations
period is short—the Sarbanes-Oxley Act prescribed a 90-
day limitation period, which the Dodd-Frank Act extended
to 180 days. 18 U.S.C. § 1514A(b)(2)(1)); see H.R. 4173,
Lllth Cong. § 922(c)(1) (2010). Monetary relief is limited
to compensatory damages, which may include back pay,
litigation costs, and reasonable attorneys’ fees, § 1514A(c)
(2)(B)-(C).

[f claimants may proceed under the Dodd-F rank Act’s
whistleblower provision even when they do not meet its
definition of “whistleblower,” there will be a proliferation

11

of whistleblower litigation under the Dodd-Frank Act,
and the strictly cireumscribed scheme of the Sarbanes-
Oxley Act will be undermined. See Mark J. Oberti,
Kmployment Law: Recent Developments in Retaliation
and Whistleblowing Law, 69 The Advocate 31, 38 (2014)
(“Depending on how this conflict is resolved in various
jurisdictions, it could result in a dramatic reduction
of OSHA charges of SOX retaliation and a significant
increase in federa! court SOX litigation brought through
Dodd-Frank.”). Extending the statute of limitations
period to bring whistleblower-retaliation claims to 10
years from 180 days will significantly increase the number
of stale cases brought, as claimants who are timed-barred
under the Sarbanes-Oxley Act proceed under the Dedd-
Frank Act instead. Furthermore, even claimants who are
not otherwise time-barred will often prefer the double
damages available under the Dodd-F rank Act; certainly,
the plaintiffs’ bar will feel the inexorable pull of a greater
recovery.

That. plainly is not what Congress intended when it
narrowly defined “whistleblower” in the Dodd-I*rank Act
and simultaneously amended several features of the more
capacious Sarbanes-Oxley Act’s regime. It would make no
sense for Congress to retain a confined limitations period
for Sarbanes-Oxley Act claims, while simultaneously
giving those same claimants—on the same facts—as many
as 10 years to sue for the more generous relief available
under subsection 78u-6(h)(1). See Yates v. United States,
135 S. Ct. 1074, 1085 (2015) (“We resist a reading of [a
statute] that would render superfluous an entire provision
passed in proximity as part of the same Act.”); Bilski v.
Kappos, 561 U.S. 593, 607-08 (2010) “(T]he canon against
interpreting any statutory provision in a manner that

12

would render another provision superfluous . . . applies
to interpreting any two provisions in the U.S, Code, even
when Congress enacted the provisions at different times.”
(citation omitted)).

What is more, construing the Dodd-Frank Act to
provide a cause of action for a violation of the Sarbanes-
Oxley Act without a requirement to exhaust administrative
remedies deprives employers of the considerable benefits
that the Sarbanes-Oxley Act’s administrative scheme
provides, us proceeding through the DOL’s OSHA fosters
early settlements and dismissals. See Occupational Safety
and Health Administration, CPL 02-03-007, Whistleblower
Investigations Manual 6-12 to -13 (2016) (“Voluntary
resolution of disputes is often desirable, and investigators
are encouraged to actively assist the parties in reaching
an agreement, where appropriate. It is OSHA policy to
seek settlement. of all cases determined to be meritorious
prior to referring the case for litigation. furthermore,
at any point prior to the completion of the investigation,
OSHA will make every effort to accommodate an early
resolution of complaints in which both parties seek it.”).

13
CONCLUSION

Kor the foregoing reasons, the Chamber respectfully
requests that the Court grant the petition for a writ of
certiorari.

Respectfully submitted,

Kare Comerrorp Topp STEVEN J, PEARLMAN

Sreve P. Lexorsky Counsel of Record

JANET GALERIA Epwarp ©. Younc

U.S, CHAMBER PrRoskaubR Rose LLP
LitiGaTion CENTER, INC. 70 W. Madison, Suite 38800

1615 H Street, N.W. Chicago, LL 60602

Washington, D.C. 20062 (312) 962-3550

(202) 463-5337 spearlman@proskauer.com

Counsel for Amicus Curiae

May 25, 2017

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0745%3A05. Public record. Not legal advice.