Jane Doe v. SEC, 28 F.4th 1306

Background

The SEC investigated Novartis for FCPA violations (2009–2013 conduct; investigation opened 2012 and settled 2016) and recovered roughly $25 million in sanctions.
After the Covered Action notice, 12 individuals applied for SEC whistleblower awards; Claims Review Staff (CRS) determined only Claimants 1 and 2 provided information that "led to" the Novartis enforcement action and awarded them jointly.
Claimants 11 and 12 (petitioners) had reported alleged misconduct by Novartis competitors to the SEC and to the media; media stories allegedly prompted Novartis to review practices later included in the SEC action.
CRS denied Claimants 11 and 12 awards because their submissions did not meet any of the three circumstances in Rule 21F-4(c): their information did not cause the SEC to open/reopen an investigation, did not significantly contribute to an investigation already underway, and was not submitted through an entity’s internal reporting that then provided related findings to the SEC.
The petitioners argued the Rule’s three listed fact patterns are not exclusive and that other circumstances (e.g., media-driven causal chains) can satisfy the statutory "led to" standard; the SEC affirmed its longstanding view that the three scenarios are exclusive and denied awards.
The D.C. Circuit held Rule 21F-4(c) is genuinely ambiguous but that the SEC’s consistent, authoritative interpretation (treating the three scenarios as exclusive) merits deference under Kisor; the petitioners’ alternative argument that they satisfied (c)(2) was forfeited for failing to raise it before the SEC. Petition denied. Concurring judge would have found the rule unambiguous and thus not reached Kisor.

Issues

Issue	Petitioners' Argument	SEC's Argument	Held
Are the three circumstances listed in Rule 21F-4(c) exclusive for satisfying the statutory "led to" requirement?	The prefatory phrase "any of the following" doesn’t say "only"; other causal scenarios (e.g., media reports triggering a company review that leads to SEC action) can satisfy "led to."	The rule and the SEC’s adopting release show the list was meant to be exclusive; the SEC has consistently applied the rule as exhaustive.	Rule 21F-4(c) is ambiguous, but the SEC’s longstanding, authoritative interpretation that the three scenarios are exclusive is reasonable and entitled to Kisor deference; petitioners lose.
Did petitioners satisfy Rule 21F-4(c)(2) (original information about conduct already under investigation that significantly contributed)?	Their submissions prompted Novartis’s internal review (via media) which produced findings used in the SEC action, so they significantly contributed.	Their submissions concerned competitors, were not used in the SEC investigation, and petitioners did not present this specific (c)(2) argument to the SEC.	Argument forfeited: petitioners failed to raise (c)(2) before the SEC and offer no reasonable excuse, so the court did not decide the merits.
Is the SEC’s interpretation inconsistent with Dodd‑Frank (warranting Chevron rather than Kisor scrutiny or invalidating the rule)?	Petitioners contended the rule as applied frustrates Dodd‑Frank’s intent to broadly reward whistleblowers whose information leads to enforcement.	The SEC’s rule implements Dodd‑Frank and the agency reasonably constrained the ‘‘led to’’ standard to administrable fact patterns.	Petitioners’ statutory-challenge argument is meritless; the SEC’s interpretation is consistent with its statutory authority.

Key Cases Cited

Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (framework for deference to agency interpretations of genuinely ambiguous rules)
Nat’l Lifeline Ass’n v. Fed. Commc’ns Comm’n, 983 F.3d 498 (D.C. Cir. 2020) (applying Kisor guideposts to agency interpretation)
Springsteen‑Abbott v. SEC, 989 F.3d 4 (D.C. Cir. 2021) (forfeiture doctrine: issues not raised before the SEC generally cannot be litigated in court)
Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (agency deference under statutory ambiguity)
City of Arlington v. FCC, 569 U.S. 290 (2013) (limits and context for agency expertise and deference)
NLRB v. SW Gen., Inc., 137 S. Ct. 929 (2017) (use and limits of expressio unius canon)
Mercy Hosp., Inc. v. Azar, 891 F.3d 1062 (D.C. Cir. 2018) (textual clarity can resolve ambiguity without deference)