Whether a whistleblower must report complaints to the SEC in order to be a “whistleblower” for purposes of the Dodd-Frank Act anti-retaliation provisions continues to be the subject of stark disagreement among federal courts. In Connolly v. Wolfgang Remkes, 2014 U.S. Dist. LEXIS 153439 (N.D. Cal., Oct. 28, 2014), a federal court in the Northern District of California noted the split of authority regarding whether a Dodd-Frank whistleblower must report directly to the SEC. The court observed that “a large majority of district courts” have declined to follow Asadi v. GE Energy (USA), LLC, 720 F.3d 620 (5th Cir. 2013). The court adopted the majority view, finding ambiguity in the statute and holding that the plaintiff was not required to report misconduct to the SEC. The court also concluded that the SEC’s interpretation that a whistleblower need not report to the SEC was a reasonable one that warranted deference.
Just one week later in Verfuerth v. Orion Energy Systems, Inc., 2014 U.S. Dist. LEXIS 156620 (E.D. Wis., Nov. 4, 2014), the United States District Court for the Eastern District of Wisconsin reached the opposite conclusion. The court found no ambiguity in the Dodd-Frank Act. Despite what it viewed as a “surprising number of courts” that had accepted plaintiffs’ arguments that that statute is ambiguous, the court disagreed. The court said that the ambiguity argument was “based solely on a disagreement about public policy, not statutory interpretation,” and the courts rejecting Asadi simply believed that “it would have made more sense to provide whistleblower protection to any individual who engages in protected activity, regardless of whether he followed the rules for reporting to the SEC.” The court approvingly noted that the Asadi court “did not fall for this argument.” Because the plaintiff conceded that he had not reported to the SEC, the court easily concluded that he was not a whistleblower as defined by the statutory language, and his Dodd-Frank retaliation claim was dismissed.