Digital Realty Trust, Inc. v. Somers

Case Updates

The Supreme Court unanimously held that the Dodd-Frank Act’s whistleblower protections do not cover employees who report a violation of the securities laws to their employer but do not report it to the SEC. The Dodd-Frank Act became a font of litigation for the plaintiffs’ bar because it allows plaintiffs to recover attorneys’ fees and double backpay. The Court’s ruling ensures the speedy dismissal of whistleblower retaliation claims that fall outside the Act’s scope.

The Supreme Court granted certiorari to resolve a split over whether the anti-retaliation provision for “whistleblowers” in the Dodd-Frank Act extends to individuals who have not reported alleged misconduct to the SEC and thus fall outside the Act’s definition of “whistleblower.” The U.S. Chamber filed an amicus brief on the merits, explaining that the Fifth Circuit correctly held that the statute extends protection only to individuals who have reported to the SEC, while the Second Circuit and the Ninth Circuit erroneously held that the statute protects anyone who makes a report, whether the report is made internally or to the SEC.

Steven J. Pearlman and Edward C. Young of Proskauer Rose LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.

The U.S. Chamber filed an amicus brief urging the Supreme Court to grant review to decide whether an individual who does not meet the definition of “whistleblower” in the Dodd-Frank Act may nevertheless seek relief under the Act’s anti-retaliation protections for whistleblowers.

The Chamber’s brief argues that 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 SEC. 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.

The brief argues that the interpretation of the Dodd-Frank 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-Frank to cover.

Steven J. Pearlman and Edward C. Young of Proskauer Rose LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.