On March 21, 2017, the Northern District of Texas dismissed a former employee’s whistleblower retaliation claim on the ground that her allegations of fraud were too far removed from potentially harming the shareholders of a publicly-traded company to be covered under SOX’s anti-retaliation protections. Brown v. Colonial Savings, F.A., No. 4:16-cv-00884 (N.D. Tex. Mar. 21, 2017).

United States Court of Appeals Ninth Circuit SealOn March 8, 2017, a split three-judge panel of the Ninth Circuit Court of Appeals affirmed a Northern District of California decision declining to dismiss a Dodd-Frank whistleblower retaliation claim because the plaintiff did not report his concerns to the SEC. Somers v. Digital Realty Trust, 15-17352 (9th Cir. March 8, 2017).  The Ninth Circuit thus aligned itself with the Second Circuit on this issue while the Fifth Circuit came to the opposite conclusion.

DOLOn February 18, 2016, the ARB dismissed a former employee’s whistleblower retaliation claim under Section 806 of SOX, concluding that he failed to show that his protected activity contributed to the decision to terminate his employment, noting.  The ARB noted that Complainant threatened a co-worker and failed to attend a required counseling program before his employment was terminated.  Folger v. SimplexGrinnell, LLC, ARB Case No. 15-021 (Feb. 18, 2016).

SDNY1The U.S. District Court for the Southern District of New York recently granted a motion for summary judgment dismissing a plaintiff’s SOX and Dodd-Frank whistleblower claims. The court ruled that the plaintiff failed to establish retaliation because:  (1) almost all of the plaintiff’s alleged protected activity did not allege shareholder fraud and therefore failed; and (2) the plaintiff did not offer any evidence establishing that a single protected complaint she made concerning the defendant’s SEC proxy statements contributed to her termination.  Yang v. Navigators Group, Inc., Case No. No. 13-cv-2073 (S.D.N.Y. Jan. 4, 2016).

Late last month, a three-judge panel of the Eleventh Circuit Court of Appeals reinstated portions of a former executive’s False Claims Act (“FCA”) whistleblower action against Health Management Associates Inc. (“HMA”), alleging that the company engaged in an illegal to generate referrals of Medicare and Medicaid patients to its facilitates.

In its ruling, the Eleventh Circuit affirmed the dismissal of plaintiff-relator Michael Mastej’s claims relating to events in 2008 and 2009.  It only reversed the Middle District of Florida’s dismissal of Mastej’s allegations concerning events in 2007.  The district court had dismissed his claims for failure to satisfy the heightened pleading standards of Rule 9(b) of the Federal Rules of Civil Procedure.