Dodd-Frank – Statutory Interpretation

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United States Supreme Court

Case Name: Digital Realty Trust, Inc. v. Somers

Case No.: 16-1276

Focus: Dodd-Frank – Statutory Interpretation

Respondent Paul Somers alleges that petitioner Digital Realty Trust, Inc. (Digital Realty) terminated his employment shortly after he reported to senior management suspected securities-law violations by the company. Somers filed suit, alleging, inter alia, a claim of whistleblower retaliation under Dodd-Frank. Digital Realty moved to dismiss that claim on the ground that Somers was not a whistle- blower under §78u–6(h) because he did not alert the SEC prior to his termination. The District Court denied the motion, and the Ninth Circuit affirmed. The Court of Appeals concluded that §78u–6(h) does not necessitate recourse to the SEC prior to gaining “whistleblower” status, and it accorded deference to the SEC’s regulation un- der Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837.

The question presented: Does the anti-retaliation provision of Dodd-Frank extend to an individual who has not reported a violation of the securities laws to the SEC and therefore falls outside the Act’s definition of “whistleblower”? Pet. for Cert. (I). We answer that question “No”: To sue under Dodd-Frank’s anti-retaliation provision, a per- son must first “provid[e] . . . information relating to a violation of the securities laws to the Commission.” §78u–6(a)(6).

Reversed and Remanded

Dissenting:

Concurring: SOTOMAYOR, J., filed a concurring opinion, in which BREYER, J., joined. THOMAS, J., filed an opinion concurring in part and concurring in the judgment, in which ALITO and GORSUCH, JJ., joined.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.