Every now and again, a case comes before the Court that raises a multitude of important public policy questions, involves a set of politically salient issues, and garners widespread attention in the media. Digital Realty Trust is not really that case. However, the issue raised in the question presented is no less important given it requires the Court to grapple yet again with fundamental statutory interpretation questions to decide who is protected, and who is not, under Dodd-Frank.
In the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Congress enacted legislation to protect whistleblowers from retaliation. Specifically, the law provides:
No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, 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 [SEC] in accordance with this section; (ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the [SEC] based upon or related to such information; or (iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 . . . this chapter . . . and any other law, rule, or regulation subject to the jurisdiction of the [SEC].
15 U.S.C. 78u-6(h)(1)(A). Earlier in the same section of the statute, the Act defines “whistleblower” as
any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the [SEC], in a manner established, by rule or regulation, by the [SEC].
15 U.S.C. 78u-6(a)(6).
The question presented by the case is straightforward enough, then:
[Does] the anti-retaliation provision for “whistleblowers” in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 extend to individuals who have not reported alleged misconduct to the Securities and Exchange Commission and thus fall outside the Act’s definition of a “whistleblower”[?]
To rephrase slightly, can “providing information to the SEC” mean “providing information to the SEC [or other entities]”? Or is that just a “bit of interpretive jiggery-pokery”? King v. Burwell, 135 S. Ct. 2480, 2500 (2015) (Scalia, J., dissenting). Or, to add a wrinkle, is the statute ambiguous enough to allow the SEC to construe the statute as it will, meriting Chevron deference? The Court will hear argument tomorrow to decide which road to travel.
Paul Somers was an employee of Digital Realty Trust, Inc., a real-estate investment trust that develops data centers. He was eventually fired, after which he sued under the anti-retaliation provision of Dodd-Frank. Somers had blown the whistle internally, reporting possible securities violations to senior management, and he felt he had been terminated wrongly on account of doing so.
Did his conduct come within the protections of Dodd-Frank, rendering his termination unlawful? The courts of appeals have split on the question.
The Fifth Circuit was evidently first to deal with this question, and it held that, to be a “whistleblower” under Dodd-Frank, a person has to report information to the SEC. Asadi v. G.E. Energy (USA), L.L.C., 720F.3d 620 (5th Cir. 2013). The Second Circuit took the middle road, concluding that the statute is ambiguous, giving the SEC plenty of play in the joints to redefine “whistleblower” so as to include those who report information internally as well as to the SEC. Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015). The Ninth Circuit went further, rejecting a retreat to Chevron, finding instead that the SEC’s expansive definition “correctly reflects congressional intent to provide protection for those who make internal disclosures as well as to those who make disclosures to the SEC.” Somers v. Digital Realty Trust Inc., No. 15-17352 (9th Cir. Mar. 8, 2017), slip op. at 4-5.
The Ninth Circuit began by looking to “the background of twenty-first century statutes to curb securities abuses.” Id. at 6. One such statute, Sarbanes-Oxley, “expressly protects those who lawfully provide information to federal agencies, Congress, or ‘a person with supervisory authority over the employee.'” Id. (quoting 18 U.S.C. 1514A(a)). The Ninth Circuit read Dodd-Frank to be “[l]ike Sarbanes-Oxley,” and reasoned that the definition in Dodd-Frank “should not be dispositive of the scope of [Dodd-Frank’s] later anti-retaliation provision.” Id. at 9. To the Ninth Circuit, Dodd-Frank “unambiguously and expressly protects from retaliation all those who report to the SEC and who report internally.” Id. (citing King, 135 S. Ct. at 2493 n.3).
There was, however, a short dissent to the Somers panel. Judge Owens simply noted in passing his agreement with the Fifth Circuit’s view before criticizing the majority’s reliance on King:
In my view, we should quarantine King and its potentially dangerous shapeshifting nature to the specific facts of that case to avoid jurisprudential disruption on a cellular level. Cf. John Carpenter’s The Thing (Universal Pictures 1982).
Id. at 13 (Owens, J., dissenting). See also King, 135 S. Ct. at 2507 (Scalia, J., dissenting) (“The somersaults of statutory interpretation the[ majority] performed . . . will be cited by litigants endlessly, to the confusion of honest jurisprudence.”).
That brings us to the present. The Court has teed up the issue and will hear argument to decide who is right in this three-way split.
It may be true that “plain meaning . . . is sometimes in the eye of the beholder.” Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 737 (1985). Nevertheless, language is not so hopelessly indeterminate that a statute that comes with its own glossary cannot be understood based on the provided definitions. Rather, “if the language of a statute is clear, that language must be given effect . . . in the absence of a patent absurdity.” INS v. Cardoza-Fonseca, 480 U.S. 421, 452-53 (1987) (Scalia, J., concurring).
After all, it is not the Court’s “function to engraft on a statute additions which we think the legislature logically might or should have made.” United States v. Cooper Corp., 312 U.S. 600, 605 (1941). Courts simply are not free to “replace the actual text with speculation as to Congress’ intent.” Magwood v. Patterson, 561 U.S. 320, 334 (2010); see also Mich. v. Bay Mills Indian Cmty., 134 S. Ct. 2024, 2034 (2014) (“This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language on the view that . . . Congress ‘must have intended’ something broader.”). Instead, “in interpreting a statute a court should always turn first to one, cardinal canon before all others. . . . that courts must presume that a legislature says in a statute what it means and means in a statute what it says there.” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992).
Here, it is difficult to avoid the plain meaning of the statute and the definition of “whistleblower” provided within it, as Somers essentially argues. Indeed, Somers tacitly seems to acknowledge as much by leading with the argument that “[t]his is a Chevron case.” Resp. Br. at 17. However, this argument falls flat, not merely because it is painfully indicative of the strength (or lack thereof) of the respondent’s reading of the statute. After all, a “whistleblower” is straightforwardly defined in that very section of the statute as someone who “provides . . . information . . . to the [SEC].” As other laws, and even other provisions of Dodd-Frank, show, “Congress plainly knew how to draft an anti-retaliation provision that covered a broader category of individuals, but it conspicuously did not do so in the provision at issue here.” Pet’rs Br. at 23-24; see, e.g., 18 U.S.C. 1514A(a)(1) (providing “[w]histleblower protection for employees of publicly traded companies” by prohibiting retaliation against “an employee” who reports information to any one of a number of entities, including but not limited to the SEC). Somers argument hits a brick wall out of the gate insofar as he has to ask the Court to ignore the definition staring it in the face.
Somers decries the “wooden rule” that definitions sections in statutes should control absent clear indication otherwise, see Resp. Br. at 18, and he takes umbrage with his former employer’s reading of Dodd-Frank, which ostensibly “directly undermine[s] the statutory scheme,” id. at 19. But it is hard to imagine a means by which Congress could more plainly speak to the “precise question” of the meaning of a term in a statute than by providing a definition for that word in that very section of the statute. FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000).
Somers struggles to explain why the definition of “whistleblower” in Dodd-Frank should “not include Dodd-Frank’s anti-retaliation provision.” Resp. Br. at 24. Reading Somers’ brief in isolation, one would think that the definition of “whistleblower” appears in some distant section of the Act, far removed from the anti-retaliation provision. If this were so, perhaps Somers’ contention that the “definitional section is not automatically controlling” would have a bit more persuasive force. Id.; see Yates v. United States, 135 S. Ct. 1074, 1082 (2015) (“[I]dentical language may convey varying content when used in different statutes, sometimes even in different provisions of the same statute.”). However, the definition of “whistleblower” in Dodd-Frank appears in the same exact section of the law–a section that opens unequivocally with the directive that “[i]n this section the following definitions shall apply.” 15 U.S.C. 78u-6(a). The fact that the definition is only “seven subsections” away, Resp. Br. at 26, makes this case worlds apart from all the cases upon which Somers relies to try to convince the Court to ignore the definition staring at it at the very beginning of the statutory section.
It takes an even greater suspension of disbelief to accept the argument that “Congress . . . . did not treat the word [‘whistleblower’] as a term of art with a defined meaning” when Congress, in fact, gave the term a defined meaning just a few hundred words above where it appears. Resp. Br. at 27. Somers does himself no favors in this regard by then arguing that the Court should “adopt the reading that gives meaning to each word”—each word, it seems, except the words Congress used in the definitions section of the statute, in which case the Court should apply the definition only sometimes, if at all. Resp. Br. at 31.
Somers ultimately drives himself headlong into Digital Realty’s reading of the statute. He asks the Court to look to cross-referenced sections of other statutes instead of comparing provisions of Dodd-Frank itself to ascertain the meaning of “whistleblower.” Resp. Br. at 32. In arguing that the Court should do so, Somers reasons that if Congress “was inspired to use any terms, it likely took that inspiration based on the provisions more immediately relevant to its task at hand.” Id. at 32-33. “Indeed!”, Digital Realty Trust would likely respond – and the provisions “more immediately relevant to [the Court’s] task at hand” are the definitions that “shall apply” throughout the section in which the anti-retaliation provision appears. Somers’ argument collapses under its own weight.
Digital Realty Trust may not change the world a la Obergefell or what have you, but it will test the Court’s commitment “to apply, not amend, the work of the People’s representatives.” Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1726 (2017). It may very well be better policy for Congress to expand the scope of Dodd-Frank’s protections to shield internal whistleblowers as well as those who go right to the SEC. If that is the case, Congress should get on with it, because, in our tripartite system of government, the Court cannot save Congress or do its job for it:
If Congress enacted into law something different from what it intended, then it should amend the statute to conform to its intent. ‘It is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think . . . is the preferred result.’ This allows both of our branches to adhere to our respected, and respective, constitutional roles.
Lamie v. United States Tr., 540 U.S. 526, 542 (2004) (quoting United States v. Granderson, 511 U.S. 39, 68 (1994) (Kennedy, J., concurring)).