DIGITAL REALTY TRUST, INC. v. SOMERS
No. 16-1276
SUPREME COURT OF THE UNITED STATES
February 21, 2018
583 U. S. ____ (2018)
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337 (1906).
SUPREME COURT OF THE UNITED STATES
Syllabus
DIGITAL REALTY TRUST, INC. v. SOMERS
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
No. 16-1276. Argued November 28, 2017—Decided February 21, 2018
Endeavoring to root out corporate fraud, Congress passed the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Both Acts shield whistleblowers from retaliation, but they differ in important respects. Sarbanes-Oxley applies to all “employees” who report misconduct to the Securities and Exchange Commission (SEC or Commission), any other federal agency, Congress, or an internal supervisor.
The SEC‘s regulations implementing the Dodd-Frank provision contain two discrete whistleblower definitions. For purposes of the award program,
Respondent Paul Somers alleges that petitioner Digital Realty Trust, Inc. (Digital Realty) terminated his employment shortly after he reported to senior management suspected securities-law violations by the company. Somers filed suit, alleging, inter alia, a claim of whistleblower retaliation under Dodd-Frank. Digital Realty moved to dismiss that claim on the ground that Somers was not a whistleblower under
Held: Dodd-Frank‘s anti-retaliation provision does not extend to an individual, like Somers, who has not reported a violation of the securities laws to the SEC. Pp. 9-19.
(a) A statute‘s explicit definition must be followed, even if it varies from a term‘s ordinary meaning. Burgess v. United States, 553 U. S. 124, 130 (2008). Section
The whistleblower definition operates in conjunction with the three clauses of
(b) The Court‘s understanding is corroborated by Dodd-Frank‘s purpose and design. The core objective of Dodd-Frank‘s whistleblower program is to aid the Commission‘s enforcement efforts by “motivat[ing] people who know of securities law violations to tell the SEC.” S. Rep. No. 111-176, p. 38 (emphasis added). To that end, Congress provided monetary awards to whistleblowers who furnish actionable
(c) Somers and the Solicitor General contend that Dodd-Frank‘s “whistleblower” definition applies only in the statute‘s award program and not, as the definition plainly states, to its anti-retaliation provision. Their concerns do not support a departure from the statutory text. Pp. 12-18.
(1) They claim that the Court‘s reading would vitiate the protections of clause (iii) for whistleblowers who make disclosures to persons and entities other than the SEC. See
(2) Nor would the Court‘s reading jettison protections for auditors, attorneys, and other employees who are required to report information within the company before making external disclosures. Such employees would be shielded as soon as they also provide relevant information to the Commission. And Congress may well have considered adequate the safeguards already afforded to such employees by Sarbanes-Oxley. Pp. 15-16.
(3) Applying the “whistleblower” definition as written, Somers and the Solicitor General further protest, will allow “identical misconduct” to “go punished or not based on the happenstance of a separate report” to the SEC. Brief for Respondent 37-38. But it is understandable that the statute‘s retaliation protections, like its financial rewards, would be reserved for employees who have done what Dodd-Frank seeks to achieve by reporting information about unlawful activity to the SEC. P. 16.
(4) The Solicitor General observes that the statute contains no apparent requirement of a “temporal or topical connection between the violation reported to the Commission and the internal disclosure for which the employee suffers retaliation.” Brief for United States as Amicus Curiae 25. The Court need not dwell on related hypotheticals, which veer far from the case at hand. Pp. 16-18.
(5) Finally, the interpretation adopted here would not undermine clause (ii) of
(d) Because “Congress has directly spoken to the precise question at issue,” Chevron, 467 U. S., at 842, deference is not accorded to the contrary view advanced by the SEC in
850 F. 3d 1045, reversed and remanded.
GINSBURG, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. SOTOMAYOR, J., filed a concurring opinion, in which BREYER, J., joined. THOMAS, J., filed an opinion concurring in part and concurring in the judgment, in which ALITO and GORSUCH, JJ., joined.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 16-1276
DIGITAL REALTY TRUST, INC., PETITIONER v. PAUL SOMERS
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[February 21, 2018]
JUSTICE GINSBURG delivered the opinion of the Court.
Endeavoring to root out corporate fraud, Congress passed the Sarbanes-Oxley Act of 2002, 116 Stat. 745 (Sarbanes-Oxley), and the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, 124 Stat. 1376 (Dodd-Frank). Both Acts shield whistleblowers from retaliation, but they differ in important respects. Most notably, Sarbanes-Oxley applies to all “employees” who report misconduct to the Securities and Exchange Commission (SEC or Commission), any other federal agency, Congress, or an internal supervisor.
The question presented: Does the anti-retaliation provision of Dodd-Frank extend to an individual who has not reported a violation of the securities laws to the SEC and therefore falls outside the Act‘s definition of “whistleblower“? Pet. for Cert. (i). We answer that question “No“: To sue under Dodd-Frank‘s anti-retaliation provision, a person must first “provid[e] . . . information relating to a violation of the securities laws to the Commission.”
I
A
“To safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corporation,” Congress enacted Sarbanes-Oxley in 2002. Lawson v. FMR LLC, 571 U. S. 429, ___ (2014) (slip op., at 1). Most pertinent here, Sarbanes-Oxley created new protections for employees at risk of retaliation for reporting corporate misconduct. See
To recover under
B
1
At issue in this case is the Dodd-Frank anti-retaliation provision enacted in 2010, eight years after the enactment of Sarbanes-Oxley. Passed in the wake of the 2008 financial crisis, Dodd-Frank aimed to “promote the financial stability of the United States by improving accountability and transparency in the financial system.” 124 Stat. 1376.
Dodd-Frank responded to numerous perceived shortcomings in financial regulation. Among them was the SEC‘s need for additional “power, assistance and money at its disposal” to regulate securities markets. S. Rep. No. 111-176, pp. 36, 37 (2010). To assist the Commission “in
Dodd-Frank implemented these goals by adding a new provision to the Securities Exchange Act of 1934:
Section
Second,
The recovery procedures under the anti-retaliation provisions of Dodd-Frank and Sarbanes-Oxley differ in critical respects. First, unlike Sarbanes-Oxley, which contains an administrative-exhaustion requirement and a 180-day administrative complaint-filing deadline, see
2
Congress authorized the SEC “to issue such rules and regulations as may be necessary or appropriate to implement the provisions of [§78u-6] consistent with the purposes of this section.”
In promulgating the final Rule, however, the agency changed course.
“For purposes of the anti-retaliation protections,” however, the Rule states that “[y]ou are a whistleblower if . . . [y]ou possess a reasonable belief that the information you are providing relates to a possible securities law violation” and “[y]ou provide that information in a manner described in” clauses (i) through (iii) of
C
Petitioner Digital Realty Trust, Inc. (Digital Realty) is a real estate investment trust that owns, acquires, and develops data centers. See Brief for Petitioner 3. Digital Realty employed respondent Paul Somers as a Vice President from 2010 to 2014. See 119 F. Supp. 3d 1088, 1092 (ND Cal. 2015). Somers alleges that Digital Realty terminated him shortly after he reported to senior management suspected securities-law violations by the company. See
Somers brought suit in the United States District Court for the Northern District of California alleging, inter alia, a claim of whistleblower retaliation under Dodd-Frank. Digital Realty moved to dismiss that claim, arguing that “Somers does not qualify as a ‘whistleblower’ under [§78u-6(h)] because he did not report any alleged law violations to the SEC.” 119 F. Supp. 3d, at 1094. The District Court denied the motion.
On interlocutory appeal, a divided panel of the Court of Appeals for the Ninth Circuit affirmed. 850 F. 3d 1045 (2017). The majority acknowledged that Dodd-Frank‘s definitional provision describes a “whistleblower” as an individual who provides information to the SEC itself. Id., at 1049. But applying that definition to the anti-retaliation provision, the majority reasoned, would narrow the third clause of
Two other Courts of Appeals have weighed in on the question before us. The Court of Appeals for the Fifth Circuit has held that employees must provide information to the SEC to avail themselves of Dodd-Frank‘s anti-retaliation safeguard. See Asadi v. G. E. Energy (USA), L. L. C., 720 F. 3d 620, 630 (2013). A divided panel of the Court of Appeals for the Second Circuit reached the opposite conclusion, over a dissent by Judge Jacobs. See Berman v. NEO@OGILVY LLC, 801 F. 3d 145, 155 (2013). We granted certiorari to resolve this conflict, 582 U. S. ___ (2017), and now reverse the Ninth Circuit‘s judgment.
II
“When a statute includes an explicit definition, we must follow that definition,” even if it varies from a term‘s ordinary meaning. Burgess v. United States, 553 U. S. 124, 130 (2008) (internal quotation marks omitted). This principle resolves the question before us.
A
Our charge in this review proceeding is to determine the meaning of “whistleblower” in
The whistleblower definition operates in conjunction
Reinforcing our reading, another whistleblower-protection provision in Dodd-Frank imposes no requirement that information be conveyed to a government agency. Title 10 of the statute, which created the Consumer Financial Protection Bureau (CFPB), prohibits discrimination against a “covered employee” who, among other things, “provide[s] . . . information to [his or her] employer, the Bureau, or any other State, local, or Federal, government authority or law enforcement agency relating to” a violation of a law subject to the CFPB‘s jurisdiction.
“[W]hen Congress includes particular language in one section of a statute but omits it in another[,] . . . this Court presumes that Congress intended a difference in meaning.” Loughrin v. United States, 573 U. S. ___, ___ (2014) (slip op., at 6) (internal quotation marks and alteration omitted). Congress placed a government-reporting requirement in
B
Dodd-Frank‘s purpose and design corroborate our comprehension of
Financial inducements alone, Congress recognized, may be insufficient to encourage certain employees, fearful of employer retaliation, to come forward with evidence of wrongdoing. Congress therefore complemented the Dodd-Frank monetary incentives for SEC reporting by heightening protection against retaliation. While Sarbanes-Oxley contains an administrative-exhaustion requirement, a 180-day administrative complaint-filing deadline, and a remedial scheme limited to actual damages, Dodd-Frank provides for immediate access to federal court, a generous statute of limitations (at least six years), and the opportunity to recover double backpay. See supra, at 5-6. Dodd-Frank‘s award program and anti-retaliation provision thus work synchronously to motivate individuals with knowledge of illegal activity to “tell the SEC.” S. Rep. No. 111-176, at 38.
When enacting Sarbanes-Oxley‘s whistleblower regime, in comparison, Congress had a more far-reaching objec-
C
In sum, Dodd-Frank‘s text and purpose leave no doubt that the term “whistleblower” in
III
Somers and the Solicitor General tender a different view of Dodd-Frank‘s compass. The whistleblower definition, as they see it, applies only to the statute‘s award program, not to its anti-retaliation provision, and thus not, as the definition plainly states, throughout “this section,”
Doing so, Somers and the Solicitor General contend, would align with our precedent, specifically Lawson v. Suwannee Fruit & S. S. Co., 336 U. S. 198 (1949), and Utility Air Regulatory Group v. EPA, 573 U. S. ___ (2014). In those decisions, we declined to apply a statutory defini-
This case is of a piece, Somers and the Solicitor General maintain. Applying the statutory definition here, they variously charge, would “create obvious incongruities.” Brief for United States as Amicus Curiae 19 (internal quotation marks omitted), “produce anomalous results,” id., at 22, “vitiate much of the [statute‘s] protection,” id., at 20 (internal quotation marks omitted), and, as the Court of Appeals put it, narrow clause (iii) of
A
It would gut “much of the protection afforded by” the third clause of
The plain-text reading of the statute undoubtedly shields fewer individuals from retaliation than the alter-
With the statutory definition incorporated, clause (iii) protects a whistleblower who reports misconduct both to the SEC and to another entity, but suffers retaliation because of the latter, non-SEC, disclosure. That would be so, for example, where the retaliating employer is unaware that the employee has alerted the SEC. In such a case, without clause (iii), retaliation for internal reporting would not be reached by Dodd-Frank, for clause (i) applies only where the employer retaliates against the employee “because of” the SEC reporting.
While the Solicitor General asserts that limiting the protections of clause (iii) to dual reporters would “shrink to insignificance the [clause‘s] ban on retaliation,” Brief for United States as Amicus Curiae 22 (internal quotation marks omitted), he offers scant evidence to support that assertion. Tugging in the opposite direction, he reports that approximately 80 percent of the whistleblowers who received awards in 2016 “reported internally before report-
B
Somers and the Solicitor General express concern that our reading would jettison protection for auditors, attorneys, and other employees subject to internal-reporting requirements. See Brief for Respondent 35; Brief for United States as Amicus Curiae 21. Sarbanes-Oxley, for example, requires auditors and attorneys to report certain information within the company before making disclosures externally. See
Our reading shields employees in these circumstances, however, as soon as they also provide relevant information to the Commission. True, such employees will remain ineligible for Dodd-Frank‘s protection until they tell the
C
Applying the whistleblower definition as written, Somers and the Solicitor General further protest, will create “an incredibly unusual statutory scheme“: “[I]dentical misconduct“—i.e., retaliating against an employee for internal reporting—will “go punished or not based on the happenstance of a separate report” to the SEC, of which the wrongdoer may “not even be aware.” Brief for Respondent 37-38. See also Brief for United States as Amicus Curiae 24. The upshot, the Solicitor General warns, “would [be] substantially diminish[ed] Dodd-Frank[‘s] deterrent effect.” Ibid.
Overlooked in this protest is Dodd-Frank‘s core objective: to prompt reporting to the SEC. Supra, at 3-4, 11. In view of that precise aim, it is understandable that the statute‘s retaliation protections, like its financial rewards, would be reserved for employees who have done what Dodd-Frank seeks to achieve, i.e., they have placed information about unlawful activity before the Commission to aid its enforcement efforts.
D
Pointing to another purported anomaly attending the
We need not dwell on the situation hypothesized by the Solicitor General, for it veers far from the case before us. We note, however, that the interpretation offered by Somers and the Solicitor General—i.e., ignoring the statutory definition when construing the anti-retaliation provision—raises an even thornier question about the law‘s scope. Their view, which would not require an employee to provide information relating to a securities-law violation to the SEC, could afford Dodd-Frank protection to an employee who reports information bearing no relationship whatever to the securities laws. That prospect could be imagined based on the broad array of federal statutes and regulations cross-referenced by clause (iii) of the anti-retaliation provision. E.g.,
E
Finally, the interpretation we adopt, the Solicitor General adds, would undermine not just clause (iii) of
But the statute expressly delegates authority to the SEC to establish the “manner” in which information may be provided to the Commission by a whistleblower. See
IV
For the foregoing reasons, we find the statute‘s definition of “whistleblower” clear and conclusive. Because “Congress has directly spoken to the precise question at
* * *
The judgment of the Court of Appeals for the Ninth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
SUPREME COURT OF THE UNITED STATES
No. 16-1276
DIGITAL REALTY TRUST, INC., PETITIONER v. PAUL SOMERS
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[February 21, 2018]
JUSTICE SOTOMAYOR, with whom JUSTICE BREYER joins, concurring.
I join the Court‘s opinion in full. I write separately only to note my disagreement with the suggestion in my colleague‘s concurrence that a Senate Report is not an appropriate source for this Court to consider when interpreting a statute.
Legislative history is of course not the law, but that does not mean it cannot aid us in our understanding of a law. Just as courts are capable of assessing the reliability and utility of evidence generally, they are capable of assessing the reliability and utility of legislative-history materials.
Committee reports, like the Senate Report the Court discusses here, see ante, at 3-4, 11-12, 16-18, are a particularly reliable source to which we can look to ensure our fidelity to Congress’ intended meaning. See Garcia v. United States, 469 U. S. 70, 76 (1984) (“In surveying legislative history we have repeatedly stated that the authoritative source for finding the Legislature‘s intent lies in the Committee Reports on the bill, which ‘represen[t] the considered and collective understanding of those Congressmen involved in drafting and studying proposed legislation‘” (quoting Zuber v. Allen, 396 U. S. 168, 186 (1969))). Bills presented to Congress for consideration are generally accompanied by a committee report. Such re-
Legislative history can be particularly helpful when a
For these reasons, I do not think it wise for judges to close their eyes to reliable legislative history—and the realities of how Members of Congress create and enact laws—when it is available.
SUPREME COURT OF THE UNITED STATES
No. 16-1276
DIGITAL REALTY TRUST, INC., PETITIONER v. PAUL SOMERS
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[February 21, 2018]
JUSTICE THOMAS, with whom JUSTICE ALITO and JUSTICE GORSUCH join, concurring in part and concurring in the judgment.
I join the Court‘s opinion only to the extent it relies on the text of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), 124 Stat. 1376. The question in this case is whether the term “whistleblower” in Dodd-Frank‘s antiretaliation provision,
Notes
“No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—
“(i) in providing information to the Commission in accordance with this section;
“(ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or
“(iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (
“Mr. ARMSTRONG. Mr. President, will the Senator tell me whether or not he wrote the committee report?
“Mr. DOLE. Did I write the committee report?
“Mr. ARMSTRONG. Yes.
“Mr. DOLE. No; the Senator from Kansas did not write the committee report.
“Mr. ARMSTRONG. Did any Senator write the committee report?
“Mr. DOLE. I have to check.
“Mr. ARMSTRONG. Does the Senator know of any Senator who wrote the committee report?
“Mr. DOLE. I might be able to identify one, but I would have to search. I was here all during the time it was written, I might say, and worked carefully with the staff as they worked . . . .
“Mr. ARMSTRONG. Mr. President, has the Senator from Kansas, the chairman of the Finance Committee, read the committee report in its entirety?
“Mr. DOLE. I am working on it. It is not a bestseller, but I am working on it.
“Mr. ARMSTRONG. Mr. President, did members of the Finance Committee vote on the committee report?
“Mr. DOLE. No.
“Mr. ARMSTRONG. . . . The report itself is not considered by the Committee on Finance. It was not subject to amendment by the Committee on Finance. It is not subject to amendment now by the Senate.
“. . . If there were matter within this report which was disagreed to by the Senator from Colorado or even by a majority of all Senators, there would be no way for us to change the report. I could not offer an amendment tonight to amend the committee report. . . . [L]et me just make the point that this is not the law, it was not voted on, it is not subject to amendment, and we should discipline ourselves to the task of expressing congressional intent in the statute.” Hirschey v. FERC, 777 F. 2d 1, 7-8, n. 1 (CADC 1985) (Scalia, J., concurring) (quoting 128 Cong. Rec. 16918-16919 (1982)). See also Kethledge, Ambiguities and Agency Cases: Reflections After (Almost) Ten Years on the Bench, 70 Vand. L. Rev. En Banc 315, 317-318 (2017) (describing his experience as a Senate staffer who drafted legislative history “like being a teenager at home while your parents are away for the weekend: there was no supervision. I was able to write more or less what I pleased. . . . [M]ost members of Congress . . . have no idea at all about what is in the legislative history for a particular bill“).