The standard for bringing a “whistleblower” retaliation claim under Sarbanes-Oxley

RELIST WATCH

The Relist Watch column examines cert petitions that the Supreme Court has “relisted” for its upcoming conference. A short explanation of relists is available here.

Before we discuss changes to the Supreme Court’s docket this week, a word about last week’s post. As anticipated, the court decided to review the question whether the First Amendment prohibits public officials from blocking constituents from their private social media accounts on which they discuss official business. The court wound up taking both the case brought by two school board members, O’Connor-Ratcliff v. Garnier, and the case brought by a blocked constituent against a city manager, Lindke v. Freed. The cases will be argued in the fall; so far at least, the court has not consolidated them, meaning they’ll likely be argued back to back instead of in a single hearing.

The petitioner in four-time relist Burns v. Mays wasn’t so lucky. The court denied review in the case, which involved a death-row prisoner’s claim that he received ineffective assistance of counsel at his capital sentencing procedure after his murder trial. Justice Sonia Sotomayor filed an opinion dissenting from the denial, joined by Justices Elena Kagan and Ketanji Brown Jackson – thus falling just one vote short of the four votes necessary to grant review. The opinion argued that there were several noteworthy errors that combined meant that Kevin Burns “now faces execution despite a very robust possibility that” he is innocent of murder. All of the rest of the cases from last week’s installment are back again this week.

That brings us to this week’s new business. The justices will be considering 126 petitions and applications at this Friday’s conference. They’ll be discussing just one cert petition for the second time: Murray v. UBS Securities, LLC. The Sarbanes-Oxley Act of 2002 protects whistleblowers who report financial wrongdoing at publicly traded companies. Trevor Murray claims that UBS Securities, LLC, and UBS AG fired him in retaliation for reporting alleged fraud on shareholders. Murray sued UBS under the act’s whistleblower protection provision, 18 U.S.C. § 1514A, and the jury returned a verdict in his favor. The federal district court in Manhattan, however, did not instruct the jury that a Sarbanes-Oxley antiretaliation claim requires a plaintiff to show that the employer intended to retaliate. The U.S. Court of Appeals for the 2nd Circuit concluded that was error. It reasoned that because Section 1514A prohibits publicly traded companies from taking adverse employment actions to “discriminate against an employee … because of” whistleblowing, that provision requires a whistleblower to prove by a preponderance of the evidence that the employer took the adverse employment action with retaliatory intent — i.e. , an intent to “discriminate against an employee … because of” whistleblowing. The 2nd Circuit thus reversed.

In his petition, Murray argues that the 2nd Circuit’s ruling was wrong. He argues that when a whistleblower invokes the act and claims he was fired because of his report, Section 1514A(b)(2)(C) of the act provides the claim is “governed by the legal burdens of proof set forth in section 42121(b) of title 49, United States Code.” Under that cross-referenced framework, a whistleblowing employee meets that burden by showing that his protected activity “was a contributing factor in the unfavorable personnel action alleged in the complaint.” If the employee meets that burden, the employer can prevail only if it “demonstrates by clear and convincing evidence that the employer would have taken the same unfavorable personnel action in the absence of that behavior.” Therefore, Murray contends, the 2nd Circuit applied too exacting a standard, and his case implicates a circuit split on the proper standard. Murray is supported by amicus briefs filed by Senator Charles Grassley (R-Iowa) (who is something of an amicus machine recently) and Public Citizen.

In opposition, UBS urges the court to deny review. Murray’s petition, it says, “addresses only one of two bases” on which the 2nd Circuit ruled against him. UBS argues that Murray “substantially overstates the alleged circuit conflict” and that the 2nd Circuit’s decision was correct.

We should know more after the court releases its order list next Monday. See you next time!

New Relists

Murray v. UBS Securities, LLC, 22-660
Issue: Whether, following the burden-shifting framework that governs cases under the Sarbanes-Oxley Act of 2002, a whistleblower must prove his employer acted with a “retaliatory intent” as part of his case in chief, or whether the lack of “retaliatory intent” is part of the affirmative defense on which the employer bears the burden of proof.
(relisted after the Apr. 21 conference)

Returning Relists

McClinton v. United States, 21-1557
Issue: Whether the Fifth and Sixth Amendments prohibit a federal court from basing a criminal defendant’s sentence on conduct for which a jury has acquitted the defendant.
(relisted after the Jan. 13 conference; apparently held after the Jan. 20 conference) 

Luczak v. United States, 21-8190
Issue: Whether this Court should overturn its decision in United States v. Watts, which holds that sentencing judges can consider acquitted conduct in imposing a sentence under the factors set forth in 18 U.S.C. § 3553(a).
(relisted after the Jan. 13 conference; apparently held after the Jan. 20 conference)

Shaw v. United States, 22-118
Issues: (1) Whether the jury clauses of Article III and the Sixth Amendment or the due process clause of the Fifth Amendment bar a court from imposing a more severe criminal sentence on the basis of conduct that a jury necessarily rejected, given its verdicts of acquittal on other counts at the same trial; (2) whether the Supreme Court’s decision in United States v. Watts should be overruled; and (3) whether, in avoidance of the constitutional question, the rules of issue preclusion, as applied in federal criminal cases, bar imposition of an aggravated sentence on a factual predicate necessarily rejected by the jury at trial in the same case.
(relisted after the Jan. 13 conference; apparently held after the Jan. 20 conference)

Karr v. United States, 22-5345
Issues: (1) Whether the Fifth and Sixth Amendments prohibit a federal court from basing a criminal defendant’s sentence on conduct underlying a charge for which the defendant was acquitted by a jury; (2) Whether it violated the Due Process Clause of the Fifth Amendment for the district court to sentence Karr based on a 20-year-old, out-of-court statement, never subjected to cross-examination, made by the more-culpable but now-deceased coconspirator, who had been attempting to obtain, and did obtain, a more-favorable resolution to the same criminal charges Karr faced.
(relisted after the Jan. 13 conference; apparently held after the Jan. 20 conference)

Bullock v. United States, 22-5828
Issues: (1) Whether the Fifth and Sixth Amendments prohibit a federal court from basing a criminal defendant’s sentence on conduct for which a jury has acquitted defendant; (2) whether the Fifth and Sixth Amendments prohibit a federal court from basing a criminal defendant’s sentence on conduct which was charged in a different jurisdiction, tried before a different court, overseen by a different judge, and for which the defendant was previously acquitted.
(relisted after the Jan. 13 conference; apparently held after the Jan. 20 conference)

Carnahan v. Maloney, 22-425
Issue: Whether individual members of Congress have Article III standing to sue an executive agency to compel it to disclose information that the members have requested under 5 U.S.C. § 2954.
(relisted after the Mar. 17, Mar. 24, Mar. 31, Apr. 14 and Apr. 21 conferences)

Hamm v. Smith, 22-580
Issue: Whether, in an Eighth Amendment method-of-execution case, an alternative method of execution is feasible and readily implemented merely because the executing state has statutorily authorized the method.
(relisted after the Mar. 17 conference)
(rescheduled before the Feb. 24 and Mar. 3 conferences; relisted after the Mar. 17, Mar. 24, Mar. 31, Apr. 14 and Apr. 21 conferences)

Loper Bright Enterprises v. Raimondo, 22-451
Issues: (1) Whether, under a proper application of Chevron v. Natural Resources Defense Council, the Magnuson-Stevens Act implicitly grants the National Marine Fisheries Service the power to force domestic vessels to pay the salaries of the monitors they must carry; and (2) whether the court should overrule Chevron, or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.
(relisted after the Mar. 24, Mar. 31, Apr. 14 and Apr. 21 conferences)

St. John v. Jones, 22-554
Issue: Whether, or in what circumstances, a court may approve a settlement as “fair, reasonable, and adequate” under Federal Rule of Civil Procedure 23(e)(2) when it pays a substantial cy pres award to third parties from the settlement fund.
(relisted after the Apr. 14 and Apr. 21 conferences) 

Steward v. Gable, 22-581
Issues: (1) Whether Oregon Evidence Code Rule 804(3)(c), which allows admission of an out-of-court statement against penal interest only if the declarant is unavailable and the statement is supported by corroborating circumstances that clearly indicate its trustworthiness, violates the due process clause of the 14th Amendment as interpreted by Chambers v. Mississippi when it excludes a third-party confession that is recanted by the declarant in court and inconsistent with known facts about the crime; and (2) whether recantations by trial witnesses and a recanted third-party confession are sufficient to satisfy Schlup v. Delo.
(relisted after the Apr. 14 and Apr. 21 conferences)