The backdrop

Digital Realty Trust hired Paul Somers in 2010 and fired him in 2014, allegedly in retaliation for reporting to senior management that his supervisor had eliminated internal controls in violation of the Sarbanes-Oxley Act of 2002. Although Sarbanes-Oxley has its own remedial scheme for retaliation against whistleblowers (including those filing only internal reports), Somers did not utilize it, perhaps because of its brief, 180-day statute of limitations. Instead, seven months after the alleged retaliation, he filed a lawsuit in the U.S. District Court for the Northern District of California claiming protection under the Dodd-Frank Act of 2010. The Dodd-Frank provision he invoked grants a remedy for retaliation against whistleblowers for, among other things, internal reporting of Sarbanes-Oxley violations. As compelling a fit for a Dodd-Frank retaliation claim as Somers’ alleged facts and requested remedy first might seem, Digital Realty moved to dismiss on the grounds that “whistleblower” is defined for Dodd-Frank purposes as “any individual who provides … information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.” A person reporting only within the employing organization, like Somers, literally is not covered.

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In its conference of December 1, 2017, the court will consider petitions involving issues such as whether orders denying state-action immunity to public entities are immediately appealable under the collateral-order doctrine; whether Pena-Rodriguez v. Colorado created a new constitutional claim; and whether Richardson v. United States precludes a double jeopardy appeal based on evidentiary insufficiency when the jury returns a guilty verdict that is set aside for a new trial.

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Wednesday round-up

By on Nov 29, 2017 at 7:02 am

This morning the justices will hear oral argument in a high-profile Fourth Amendment case, Carpenter v. United States, which asks whether the government must obtain a warrant before obtaining cell-site-location information from cellphone service providers. Amy Howe had this blog’s preview. Madeline Horn and Conley Wouters preview the case for Cornell Law School’s Legal Information Institute. For The Washington Post, Robert Barnes reports that the case calls on the justices to “undertake[] a potentially landmark examination of how law enforcement’s use of technology impacts the American notion of privacy.” Additional coverage comes from Erin Fuchs at Yahoo Finance and from Jess Bravin and Ryan Knutsen for The Wall Street Journal, who report that “there is widespread criticism that allowing authorities to compile such granular data about an individual’s life, without a judicial warrant, no longer meets society’s ‘reasonable expectation of privacy’—the touchstone of the Supreme Court’s approach to constitutional limits on searches and seizures.” Commentary on the case comes in a Daily Journal podcast and from Elizabeth Wydra in an op-ed for the Cleveland Plain Dealer.

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The key word in today’s argument in Cyan, Inc. v. Beaver County Employees Retirement Fund was “gibberish” – the characterization by several of the justices of the text Congress provided in the Securities Litigation Uniform Standards Act of 1998. The argument revealed the justices’ frustration at the statute’s sloppy craftsmanship.

The case involves the interplay between two sections of the federal securities laws. 15 U.S.C. § 77v states that the “district courts … shall have jurisdiction … , concurrent with State … courts, except as provided in section 77p of this title with respect to covered class actions, of … actions … to enforce any liability … created by [the Securities Act of 1933].” However, as I explained in more detail in my preview, nothing in Section 77p restricts the jurisdiction of state courts over actions to enforce the Securities Act of 1933. The petitioner, Cyan (the defendant in the class action), argues that the provision bars concurrent jurisdiction over all “covered class actions,” whether based on state law or federal law, pointing to a definition of covered class actions in Section 77p. The class-action plaintiffs, Beaver County Employees Retirement Fund and others, argue that the provision bars jurisdiction over “mixed” state- and federal-law actions, pointing to a provision in Section 77p that bars securities class actions that rely on state (as opposed to federal) law. The government, offering yet another reading, agrees with the plaintiffs that the statute bars only the actions that rely on state law, but argues that defendants can remove all actions (based on state or federal law) from state court to federal court.

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Petitions of the day

By on Nov 28, 2017 at 8:20 pm

The petitions of the day are:

17-627

Issues: (1) Whether the U.S. Court of Appeals for the 5th Circuit erred by rejecting the Federal Communications Commission’s determination that failure to pay a tariffed charge is not a violation of the Communications Act—which would have the effect of turning the FCC into a “collection agency” contrary to the FCC’s view of its proper role; and (2) whether the U.S. Court of Appeals for the 5th Circuit erred by rejecting the FCC’s determination that it has exclusive jurisdiction over “information services,” instead holding that states may regulate intrastate information services.

17-628

Issue: Whether the U.S. Court of Appeals for the 8th Circuit erred by rejecting the Federal Communications Commission’s determination that it has exclusive jurisdiction over “information services,” instead holding that states may regulate intrastate information services.

Without hearing anything from the Internal Revenue Service, a taxpayer destroys business records that show cash receipts, cash outlays and failure to pay income tax or remit withholding tax. Can he be found to have “corruptly” “obstruct[ed] the due administration of” the tax law, which is a felony? The Supreme Court will consider this question when it hears argument next week in Marinello v. United States. The court’s recent case law suggests that it may be inclined to reach a result that curtails the government’s ability to bring obstruction charges in this kind of circumstance. In Yates v. United States, in 2014, for instance, the court held, 5-4, that a fishing boat captain who threw undersized fish overboard did not obstruct justice by destroying a “tangible object” within the meaning of 18 U. S. C. §1519.

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Argument transcripts

By on Nov 28, 2017 at 3:16 pm

The transcript in Cyan, Inc. v. Beaver County Employees Retirement Fund is available on the Supreme Court’s website; the transcript in Digital Realty Trust, Inc. v. Somers is also available.

 

Posted in Merits Cases
 
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[Editor’s note: An earlier version of this post ran on September 11, as an introduction to the blog’s symposium on Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commissionas well as at Howe on the Court, where it was originally published.]

Colorado’s anti-discrimination law bars places of public accommodation – that is, businesses that sell to the public – from discriminating based on (among other things) sexual orientation. In 2012, Charlie Craig and David Mullins went to Masterpiece Cakeshop, a Denver-area bakery, to order a cake to celebrate their upcoming wedding. But the couple left empty-handed … and upset. Masterpiece’s owner, Jack Phillips, is a Christian who closes his business on Sundays and refuses to design custom cakes that conflict with his religious beliefs – for example, cakes that contain alcohol, have Halloween themes or celebrate a divorce. And because Phillips also believes that marriage should be limited to opposite-sex couples, he told Craig and Mullins that he would not design a custom cake for their same-sex wedding celebration.

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Relist Watch

By on Nov 28, 2017 at 2:11 pm

John Elwood reviews Monday’s relists.

Just two new relists this week. If you were trying to come up with a case caption that could make complete strangers blanch in horror and dread, this week’s first relist would be hard to beat: It takes a special person not to wince when confronted with a name like Salt River Project Agricultural Improvement and Power District v. SolarCity Corp., 17-368. If it were possible to combine ERISA, CERCLA, FIFRA, RCRA, and, well, a couple of made up acronyms in one place, it would probably be in a case with a name like that. But if we have learned anything as a people, it’s that you can’t judge a book by looking at the cover. And as it happens, the case whose caption we are unwilling to repeat further is way more interesting than the name lets on. To be sure, it’s nowhere near as interesting as, say, a member of another country’s royal family becoming engaged or an independent agency having a succession kerfuffle. But it’s not bad for a weeknight.

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The second case of yesterday’s Supreme Court patent day was SAS Institute v. Matal. I would not have been surprised if this little statutory case had been a letdown after the constitutional concerns with which the justices began their morning in Oil States Energy Services v. Greene’s Energy Group. But the justices seemed just as engaged in this one as they were in Oil States and, if anything, even less settled on how to move forward. Indeed, it is not much of an exaggeration to suggest that there were as many views on SAS Institute as there were talkative justices.

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