Leshinsky v. Telvent GIT, S.A.
873 F. Supp. 2d 582
S.D.N.Y.2012Background
- Plaintiff Leshinsky alleges retaliation for whistleblowing under Sarbanes-Oxley § 1514A (Section 806).
- Pre-2010, it was unclear whether subsidiaries of public companies were protected by § 1514A(a).
- Dodd-Frank amended § 1514A to cover subsidiaries or affiliates whose financial information is included in the public company’s consolidated statements.
- Plaintiff worked for Farradyne and Caseta, non-public subsidiaries of Telvent GIT, S.A., the public company.
- Defendants moved to dismiss for lack of subject matter jurisdiction, arguing no coverage under pre- amendment § 1514A.
- Court holds the 2010 amendment applies retroactively as a clarification, giving § 1514A jurisdiction over the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of the Dodd-Frank amendment | Amendment clarifies pre-existing law, applies retroactively. | Amendment changes law; retroactivity may be improper. | Amendment retroactively clarifies scope; jurisdiction exists. |
| Whether subsidiaries of a public company fall within § 1514A(a) post-amendment | Subsidiaries included if consolidated in parent’s financials. | Coverage limited to employees of public parent unless agency/veil piercing shown. | Subsidiaries included under the amended § 1514A. |
| Deference to agency interpretations | DOL/OSHA/SEC interpretations deserve Chevron/Skidmore deference. | Agency interpretations are not controlling and ARB is not binding. | Deference applied where appropriate, but court independently agrees with retroactivity and scope. |
| Consistency with prior statutes and history | Remedial purpose supports broad coverage of subsidiaries. | Text ambiguity prior to amendment warrants limited scope. | Amendment is a reasonable clarification aligned with remedial purpose. |
Key Cases Cited
- Lawson v. FMR LLC, 670 F.3d 61 (1st Cir. 2012) (limits coverage to those who retaliate, not necessarily who is covered)
- Rao v. DaimlerChrysler Corp., No official reporter cited here (E.D. Mich. 2007) (early district court on subsidiary coverage; addressed text ambiguity)
- Johnson v. Siemens Building Technology, Inc., 2011 WL 1247202 (DOL ARB 2011) (ARB held amendment retroactive as clarification)
- Piamba Cortes v. American Airlines, Inc., 177 F.3d 1272 (11th Cir. 1999) (clarification retroactivity discussed in context of amendments)
- Levy v. Sterling Holding Co., LLC, 544 F.3d 493 (3d Cir. 2008) (factors for retroactivity clarification analysis)
- Brown v. Thompson, 374 F.3d 253 (4th Cir. 2004) (clarifying amendments often retroactive)
- Carnero v. Boston Scientific Corp., 433 F.3d 1 (1st Cir. 2006) (subsidiaries and consolidated financials context)