Cerny v. SEC
16-934-ag
2d Cir.Sep 7, 2017Background
- Petitioners Charles M. Cerny and Cliff Buxbaum filed timely petitions for review after the SEC denied their whistleblower award claims as untimely.
- A SEC "Notice of Covered Action" listing a June 3, 2012 filing deadline made them potentially eligible; petitioners submitted separate award claims in 2014.
- The SEC rejected the claims as barred by the 90‑day filing rule in 17 C.F.R. § 240.21F‑10(a) and declined to waive the deadline, finding no "extraordinary circumstances."
- Petitioners argued the quality of their earlier submissions and the SEC’s alleged failure to catalogue those submissions warranted equitable relief from the deadline.
- Petitioners also argued they never received actual notice from the SEC of their potential eligibility; the SEC relied on its published‑notice regime instead.
- The Second Circuit reviewed the SEC’s decision under the Administrative Procedure Act standard (5 U.S.C. § 706) and denied the petition for review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / extraordinary‑circumstances standard | Cerny/Buxbaum: their circumstances (quality of prior submissions; SEC catalogue errors) justify waiver of the 90‑day rule | SEC: its regulation requires showing failure beyond claimant's control; petitioners did not meet that standard | Court: AFFIRMS—SEC’s interpretation controlling; petitioners failed to show extraordinary circumstances |
| Requirement of actual notice | Petitioners: they never received actual notice, so filing deadline should be excused | SEC: regulation requires publication on website, not individualized notice | Court: AFFIRMS—publication suffices; no entitlement to actual notice |
| Deference to agency interpretation | Petitioners: SEC’s interpretation is incorrect or inconsistent with regs | SEC: its interpretation of "extraordinary circumstances" is reasonable and controlling | Court: AFFIRMS—applies Auer/Encarnacion deference to agency interpretation |
| Procedural requests (record completion; amicus briefs) | Petitioners (and movants): requested completion of administrative record; non‑parties sought leave to file amicus briefs | SEC: opposed or not implicated | Court: DENIES those motions as noted in footnote |
Key Cases Cited
- Encarnacion ex rel. George v. Astrue, 568 F.3d 72 (2d Cir. 2009) (agency interpretation of its regulations is controlling unless plainly erroneous or inconsistent)
- Auer v. Robbins, 519 U.S. 452 (U.S. 1997) (deference to an agency’s interpretation of its own ambiguous regulation)
- PennMont Secs. v. SEC, [citation="414 F. App'x 465"] (3d Cir. 2011) (discussing parallels between Commission’s extraordinary‑circumstances standard and equitable tolling)