Supreme Court to Decide Significant Whistleblower Issue
In granting a petition to review the Ninth Circuit's decision in Somers v. Digital Realty, the Supreme Court will resolve a circuit court split on the issue of whether Dodd-Frank prohibits retaliation against internal whistleblowers who did not report their concerns about potential securities law violations to the SEC.
In March, partners Todd Kerr and Michael Clyde reported on Somers, which held that internal whistleblowers are protected, joining the Second Circuit on this issue. See Berman v. Neo@Ogilvy LLC, 801 F.3d 145, 155 (2d Cir. 2015). The Fifth Circuit, the first circuit court to address the issue, has taken a different view, holding, "[u]nder Dodd-Frank's plain language and structure, there is only one category of whistleblowers: individuals who provide information relating to a securities law violation to the SEC." Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620, 621 (5th Cir. 2013). Both the Ninth and Second Circuits referenced the SEC's interpretation of the relevant statute, as set forth in Exchange Rule 21F-2: employees who report violations internally are protected regardless of whether they report to the SEC. To the extent the circuit courts' rulings were based on Chevron deference to the SEC's interpretation, that could set up an interesting battle at the Supreme Court, where its newest Justice is an outspoken critic of such deference.
Print and share
Authors
Notice
Before proceeding, please note: If you are not a current client of Perkins Coie, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Perkins Coie has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing or retaining a lawyer. An attorney-client relationship with Perkins Coie or any lawyer at Perkins Coie is not established until and unless Perkins Coie agrees to such a relationship as memorialized in a separate writing.
Notice
Before proceeding, please note: If you are not a current client of Perkins Coie, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Perkins Coie has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing or retaining a lawyer. An attorney-client relationship with Perkins Coie or any lawyer at Perkins Coie is not established until and unless Perkins Coie agrees to such a relationship as memorialized in a separate writing.
Explore more in
White Collar Briefly
Drawing from breaking news, ever changing government priorities, and significant judicial decisions, this blog from Perkins Coie’s White Collar and Investigations group highlights key considerations and offers practical insights aimed to guide corporate stakeholders and counselors through an evolving regulatory environment.