The Whistleblower Lawyer

What is a Whistleblower? The Supreme Court Will Decide

Whistleblower Lawyer

One thorny issue in whistleblower law involves deciding exactly how existing laws might protect a whistleblower from retaliation in certain cases. While it could appear as if it would be easy to define whistleblowing, in reality the many complex laws and situations can quickly muddy the waters when it comes to a clear definition.

One such case has been taken on by the Supreme Court. In late June 2017, the Court agreed to take on the case of Digital Realty Trust, Inc. v. Paul Somers by their act of granting certiorari. The case will decide this crucial whistleblowing question: Do the protections of the Dodd-Frank Act extend to a whistleblower who reported internally only, and not to the SEC?

Granting a writ of certiorari means that at least four of the nine Supreme Court justices have decided that the issues detailed in the petition to the court have enough merit to be reviewed. It does not follow, however, that the granting of certiorari means that the Supreme Court is in agreement with the lower court’s decision.

Background of the Case

A former Digital Realty Trust vice president, Paul Somers, claims that he reported a number of possible violations of securities laws to the company’s senior management. Although Somers was fired before he could inform the SEC of his allegations concerning securities law violations, he proceeded to file as a whistleblower under the Dodd-Frank Act.

The Ninth Circuit court then handed down a ruling regarding Digital Realty Trust, Inc. v. Paul Somers. The 2-1 decision in early March of 2017 determined that Dodd-Frank’s anti-retaliatory provisions supported a case where an employee files only internal complaints and not with the SEC.

On April 25, 2017, Digital Realty asked the U.S. Supreme Court to decide on the internal complaint matter. In Digital Realty’s opinion, reviewing this decision would allow the Court to resolve a split between the Ninth and Second Circuits and the Fifth Circuit. The Fifth has held that a whistleblower is required to report retaliation concerns to the SEC, not just internally, to receive Dodd-Frank protections.

Dodd-Frank and Sarbanes-Oxley

Why is there so much concern about internal whistleblowers bringing a case under Dodd-Frank when a complaint could be brought under Sarbanes-Oxley? Three possible reasons exist:

  • Sarbanes-Oxley requires that a whistleblower first file with the U.S. Department of Labor (DOL). Some contend that the DOL is generally not nearly as responsive to whistleblower claims as Dodd-Frank is.
  • The statute of limitations is much stricter under Sarbanes-Oxley.
  • Back pay can be doubled under Dodd-Frank.

What Happens Next?

Now that the justices have granted a writ of certiorari, their next step is to hear oral arguments. If they believe that the constitutional issues are not presented clearly, or if another good reason exists for them to wait for a more suitable case to be presented to the Court, the Supreme Court can still decline to review the case further. In such a case, the justices can dismiss the case, ruling that the writ of certiorari was “improvidently granted,” essentially saying they never should have accepted the case. Often this is done with no explanation. But if the case survives oral arguments, a decision is usually handed down by the Court.

The Digital Realty case has some things in common with recent changes made by the Commodity Futures Trading Commission (CFTC) regarding their whistleblower statutes. These recent changes added additional protections against retaliation.

Making a difference.

If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.

Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.


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