Sharkey v. J.P. Morgan Chase & Co.
2011 U.S. Dist. LEXIS 92953
S.D.N.Y.2011Background
- Sharkey filed an OSHA SOX complaint on Oct 22, 2009; OSHA dismissed it on Apr 12, 2010; she filed a federal SOX suit on May 10, 2010.
- The court’s Jan 14, 2011 order found protected activity but insufficiently alleged the illegal conduct in the OSHA complaint and granted leave to replead.
- Sharkey filed an Amended Complaint on Feb 14, 2011 alleging multiple reports to JPMC executives about the Suspect Client’s alleged fraud, money laundering, and Know Your Customer (KYC) violations.
- Defendants moved to dismiss under Rule 12(b)(1) and 12(b)(6) arguing lack of jurisdiction for new AC facts not in OSHA, pleading deficiencies, and lack of knowledge, among others.
- The court denied the motion, holding: (i) the AC is within SOX exhaustion jurisdiction; (ii) the AC states a SOX whistleblower claim; (iii) the AC adequately alleges the conduct reported and the defendants’ knowledge of protected activity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AC falls within SOX exhaustion jurisdiction | AC facts amplify OSHA charge and are reasonably related | New facts not in OSHA deprive jurisdiction | AC is within jurisdiction |
| Whether AC states a valid SOX whistleblower claim | Plaintiff reasonably believed violations; need not specify exact statute | Plaintiff must specify a particular statute or violation | AC adequately states a SOX whistleblower claim |
| Whether AC adequately alleges the conduct reported and defendants’ knowledge | AC details communications to Defendants about Suspect Client misconduct | AC lacks specificity about to whom reports were made | AC adequately alleges protected activity and knowledge |
Key Cases Cited
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (jurisdiction and standard for jurisdictional dismissal analysis)
- Mills v. Polar Molecular Corp., 12 F.3d 1170 (2d Cir. 1993) (pleading standards and reviewing complaints under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading plausibility standard under Twombly/Iqbal)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standards to state a plausible claim)
- Fraser v. Fiduciary Trust Co. Int’l, 417 F. Supp. 2d 310 (S.D.N.Y. 2006) (discusses exhaustion and scope in SOX claims (Fraser II))
- Jute v. Hamilton Sundstrand Corp., 420 F.3d 166 (2d Cir. 2005) (scope of EEOC-related investigations and relating claims)