Andrea Jones v. Southpeak Interactive Corporation
777 F.3d 658
| 4th Cir. | 2015Background
- Andrea Jones was SouthPeak’s CFO; she questioned an unrecorded $307,400 wire and refused to sign an amended SEC filing that denied intentional misstatement; she was terminated on August 14, 2009.
- Jones filed an OSHA complaint on October 5, 2009 naming SouthPeak and listing Melanie Mroz and Terry Phillips as persons alleged to have violated the Sarbanes‑Oxley Act; OSHA informed SouthPeak but did not separately notify the individual executives.
- After 180 days without a final OSHA decision, Jones elected to pursue a federal suit and filed suit on June 18, 2012 against SouthPeak, Mroz, and Phillips under 18 U.S.C. § 1514A (Sarbanes‑Oxley) and also asserted Dodd‑Frank claims (later dismissed).
- A jury found all three defendants liable; initial verdicts and post‑verdict communications produced confusion about allocation of back pay and compensatory damages, leading to supplemental deliberations, a remittitur, and acceptance of reduced awards.
- The district court awarded Jones back pay, emotional‑distress/compensatory damages (after remittitur), and attorneys’ fees; defendants appealed on statute‑of‑limitations, exhaustion, damages availability/amount, verdict consistency, and fee‑calculation/allocation grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable statute of limitations for § 1514A retaliatory‑discharge claims | Jones: suit filed within four‑year catchall (28 U.S.C. § 1658(a)) so timely | SouthPeak: § 1658(b) two‑year rule for claims involving securities fraud applies | Court held § 1658(a) governs; § 1658(b) applies only to claims requiring proof of fraudulent scienter, which Jones’s SOX retaliation claim does not require |
| Exhaustion of administrative remedies as to individual executives (Mroz, Phillips) | OSHA complaint named the individuals and alleged retaliatory termination; timely and OSHA delays authorize federal suit | Defendants: OSHA complaint did not adequately identify Mroz and Phillips; Jones should have pressed OSHA further | Court held exhaustion satisfied: complaint reasonably identified individuals; employer had notice and was not prejudiced |
| Availability and reasonableness of emotional‑distress/compensatory damages under § 1514A(c) | Jones: § 1514A(c)(1) grants “all relief necessary to make the employee whole,” allowing noneconomic damages | Defendants: subsection (c)(2) lists exclusive categories and precludes emotional‑distress awards | Court held emotional‑distress damages are available under § 1514A(c); district court’s remittitur to $50,000 each was not an abuse of discretion |
| Inconsistent jury verdicts, and attorneys’ fees calculation/allocation | Jones: supplemental instruction and resumed deliberations cured confusion; fee award reflects lodestar and success | Defendants: court should have accepted first verdict or ordered new trial; fee calculation omitted McAfee step and joint‑and‑several allocation was improper | Court affirmed redeliberation and the Final Verdict as not irreconcilably inconsistent; upheld fee award process and joint‑and‑several allocation as within district court discretion |
Key Cases Cited
- Sewell Coal Co. v. Director, Office of Workers’ Comp. Programs, 523 F.3d 257 (4th Cir.) (standard of review for statute‑of‑limitations legal issues)
- Jones v. R. R. Donnelley & Sons Co., 541 U.S. 369 (Sup. Ct.) (§ 1658(a) as catchall limitations provision)
- In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189 (3d Cir.) (§ 1658(b) applies to claims requiring proof of fraudulent intent)
- Merck & Co. v. Reynolds, 130 S. Ct. 1784 (Sup. Ct.) (discovery rule in § 1658(b) requires discovery of scienter for securities fraud accrual)
- Hensley v. Eckerhart, 461 U.S. 424 (Sup. Ct.) (standards for awarding attorneys’ fees based on degree of success)
- Halliburton, Inc. v. Administrative Review Board, 771 F.3d 254 (5th Cir.) (§ 1514A(c) permits noneconomic compensatory damages)
- Lockheed Martin Corp. v. Administrative Review Board, 717 F.3d 1121 (10th Cir.) (same conclusion on availability of emotional‑distress damages)
- Hafner v. Brown, 983 F.2d 570 (4th Cir.) (supplemental instructions and resubmission appropriate when jury appears confused)