The Court Did Something Interesting Today...

granting certiorari in Digital Realty Trust, Inc. v. Somers.  I will hopefully make some time to comment later this week on the significance of Digital Realty Trust, but roughly speaking, it's a case about what happens when lower courts apply Bond and, I must say, Burwell's atextual methodology (I think Burwell was correctly decided, but only on the alternative and at least not explicitly articulated ground of drafting error) to a distinctly non-Bond/Burwell-like problem.  The closest analogy is really Bond, though what the lower courts have done with the statute at issue in Digital Realty Trust is vastly more defensible than Bond, which I deem perhaps the Court's least defensible statutory decision in its history.  

The problem in Digital Realty Trust goes as follows.  A section of the Dodd-Frank Act provides securities "whistleblowers" an array of anti-retaliation protections and incentives for whistleblowing.  That section helpfully contains a definition of "whistleblower" that applies in that section alone; to quote the statute, "[i]n this section, the following definitions shall apply . . . ."  A whistleblower is defined as "any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the [Securities Exchange] Commission, in a manner established, by rule or regulation, by the Commission."  This is not an ordinary-language definition of whistleblower, to say the least; only whistleblowers who talk to the SEC count as statutory "whistleblowers."

Now, a later subparagraph of this not-overly-long section of Dodd-Frank, subparagraph (h)(1)(A), provides protection from retaliation to "a whistleblower" for 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 [statutory cross-references omitted] and any other law, rule, or regulation subject to the jurisdiction of the Commission."  

It so happens that the disclosures required/protected by Sarbanes-Oxley referenced in romanette (iii) include internal reporting to management.  So, if the section-specific definition of whistleblower is read into the anti-retaliation subparagraph, the subparagraph's shield from retaliation against Sarbanes-Oxley disclosures in romanette (iii) would only apply to people who made internal reports under Sarbanes-Oxley and blew a whistle to the SEC before they were retaliated against—which, it's claimed, will rarely be the case of anyone— thereby negating the apparent purpose of romanette (iii).  

For this reason, both the Second and Ninth Circuits have simply declined to read the section's definition of whistleblower into the section's retaliation subparagraph, instead reading whistleblower in that subparagraph to just mean an ordinary-language whistleblower who makes disclosures of the kind protected by romanette (iii)—much as Bond, for much weaker contextual reasons, declined to read the Chemical Weapons Convention Implementation Act's definition of chemical weapon into that statute's only operative provision, replacing it with the Court's ordinary-language understanding of what constitutes a chemical weapon.  Interestingly, both circuits justified that holding by reference to Bond and Burwell. I have some views about the propriety of that maneuver and how we should decide when it's appropriate to engage in definition-correcting moves of this kind, but those will have to wait until my next post.  For now, I will just add that if all this doesn't sound exciting enough, this is a Chevron case(!!); the SEC has interpreted the statute to protect "three categories of whistleblowers"—not just the one category defined in the statute—including any person who makes a romanette (iii) disclosure.  Imagine what Justice Gorsuch will have to say about that.