Recent Significant Whistleblower Decisions
October 2009

SARBANES-OXLEY ACT

Lebron v. AIG International Group, Inc. , No. 09-4285 (S.D.N.Y. Oct. 19, 2009) PDF

REMOVAL TO FEDERAL DISTRICT COURT; COMPLIANCE WITH DOL'S FIFTEEN DAY NOTICE REGULATION IS NOT A PREREQUISITE TO COURT'S JURISDICTION

In Lebron v. AIG International Group, Inc. , No. 09-4285 (S.D.N.Y. Oct. 19, 2009), the court held that compliance with the regulation at 29 C.F.R. § 1980.111(b), which requires 15 days notice by the complainant to the ALJ of the intent to remove a SOX complaint to a federal district court, is not a prerequisite to the district court's jurisdiction over the matter. The court wrote: "Because deference is not given to administrative regulations that narrow Congress's statutory grant of jurisdiction to district courts, a district court can properly exercise jurisdiction over a whistleblower claim under SOX even when no notice is given to the ALJ in contravention of the DOL's fifteen-day notice requirement." Slip op. at 14.

REMOVAL TO FEDERAL DISTRICT COURT; FAILURE TO APPEAL OSHA FINDINGS TO ALJ WITHIN 30 DAYS PROHIBITS JUDICIAL REVIEW, EVEN IF OSHA FINDINGS DID NOT BECOME FINAL PRIOR TO 180 DAYS FROM THE FILING OF THE ADMINISTRATIVE COMPLAINT

In Lebron v. AIG International Group, Inc. , No. 09-4285 (S.D.N.Y. Oct. 19, 2009), the court considered whether a SOX whistleblower complaint is subject to de novo review in federal district court where OSHA's preliminary findings and order were not appealed to an ALJ within 30 days and therefore became DOL's final order, but the preliminary findings and order did not become final prior to 1514A's 180-day limit for issuance of the Secretary's final order. The court observed that the SOX statute contained an ambiguity insofar as it both authorizes district court review if the Secretary has not issued a final opinion within 180 days of the filing of the administrative complaint, and prohibits judicial review of the Secretary's final order. The court stated that the ambiguity could be resolved by considering the statutory scheme as a whole and construing the statute to avoid absurd results. The court held that:

   [S]ection 42121(b)'s prohibition on judicial review of final orders must be read as a limit on Congress's grant of jurisdiction to the district courts under section 1514A. Under this reading, if the Secretary does not issue a final order within 180 days of the filing of the administrative complaint, the complainant has thirty days from receiving a preliminary order to either file a claim in a district court or appeal the preliminary order to the ALJ and thereby preserve the option to file a district court claim at a later time. If the complainant ... takes no action within thirty days, the preliminary order becomes final and the district court no longer has jurisdiction to review the claims de novo .

Slip op. at 19.

SURFACE TRANSPORTATION ASSISTANCE ACT

Montgomery v. Adm. Review Bd., USDOL , No. 08-60716 (5th Cir. Oct. 2, 2009) (unpublished) (case below ARB No. 05-129, ALJ No. 2005-STA-6) (case below 2006-SOX-31) PDF | HTML

[STAA Digest II B 2]
MOTION IN LIMINE DENYING RECOVERY FOR ADVERSE ACTIONS THAT TOOK PLACE MORE THAN 180 DAYS PRIOR TO THE FILING OF THE STAA COMPLAINT

In Montgomery v. USDOL , No. 08-60716 (5th Cir. Oct. 2, 2009) (unpublished), the Complainant argued that the ALJ incorrectly granted the Respondent's motion in limine denying recovery for any adverse actions that took place more than 180 days prior to the filing of the STAA complaint. The court found that "Because the STAA requires a complainant to file a whistleblower claim 'not later than 180 days after the alleged violation occurred,' the ALJ did not err when it granted Jack in the Box's motion." Slip op. at 3 (footnote omitted). Because they were not raised as objections at the time of the hearing, the court refused to consider the Complainant's arguments that he did not have fair notice of the motion or that the Respondent waived reliance on the limitations period because it was not raised as an affirmative defense.

[STAA Digest II J]
ALLEGATION MADE IN POST-TRIAL PLEADING IS NOT DEEMED ADMITTED UNDER FRCP 8(b)(6) WHERE A RESPONSIVE PLEADING WAS NOT PROCEDURALLY REQUIRED

In Montgomery v. USDOL , No. 08-60716 (5th Cir. Oct. 2, 2009) (unpublished), the Complainant argued that the ALJ and the ARB erred when they failed to deem as admitted various allegations that he made in post-trial submissions, given that the Respondent had not specifically denied those allegations. The court observed that FRCP 8(b)(6) provides that an allegation is admitted "if a responsive pleading is required and the allegation is not denied." The court found, however, that no allegations should have been admitted because no responsive pleading was required after the Complainant's post-trial motions for a new trial.

[STAA Digest II I]
ALLEGATION OF INEFFECTIVE ASSISTANCE OF COUNSEL IN STAA WHISTLEBLOWER CASE NOT COGNIZABLE

In Montgomery v. USDOL , No. 08-60716 (5th Cir. Oct. 2, 2009) (unpublished), the court rejected the Complainant's argument that his constitutional right to effective assistance of counsel was infringed during STAA whistleblower proceedings before the ARB and the ALJ, because the Sixth Amendment right to counsel is inapplicable in civil cases.