In April 2017, a defendant company, Digital Realty Trust, asked the Supreme Court in Digital Realty Trust, Inc. v. Somers, to review a March decision by the Ninth Circuit holding that Dodd-Frank’s anti-retaliation employment protections apply to whistleblowers who report alleged wrongdoing to agencies or persons other than the SEC. See Petition for Writ of Certiorari, Digital Realty Trust, Inc. v. Somers, No. 16-1276 (Apr. 25, 2017). That decision widened a circuit split on that question: the Fifth Circuit held in 2013 that whistleblowers must report to the SEC for the anti-retaliation provisions to apply, while the Second Circuit held in 2015 that because the anti-retaliation provisions are ambiguous, courts must defer to the SEC’s guidance as to how widely they apply.
In Somers, the Ninth Circuit held that the district court correctly denied Digital Realty’s motion to dismiss a lawsuit by one of its former Vice Presidents, who alleges he was fired in retaliation for complaining to senior management that his supervisor eliminated internal controls required by Sarbanes-Oxley. In May 2017, the plaintiff, former VP Paul Somers, filed a brief arguing that Supreme Court review of the circuit split is not appropriate at this time because the lower courts need more time to develop a broader record on the issue, and the Fifth Circuit may choose to reconsider its decision in light of more recent precedent on the other side. Brief for Respondent, Digital Realty Trust, Inc. v. Somers, No. 16-1276 (U.S. May 30, 2017), cert. granted, 85 U.S.L.W. 3594 (U.S. June 26, 2017). Somers did, however, admit that the issue was important and recurring. On the merits, Somers said that Digital Realty Trust’s interpretation would upset the proper operation of Dodd-Frank and Sarbanes-Oxley by discouraging internal reporting. Four amicus briefs were filed in support of Digital Realty including from the US Chamber of Commerce. On June 26, 2017, the Supreme Court granted the defendant’s petition for writ of certiorari.