[Last Updated Oct. 31, 2011]
ADMINISTRATIVE REVIEW BOARD DECISIONS
SOVEREIGN IMMUNITY; INDIAN TRIBE
A sovereign Indian tribe is not an entity covered under SOX, 18 U.S.C.A. § 1514A, and moreover is immune from suit under that provision pursuant to sovereign immunity. Hylton v. The Seminole Tribe of Florida , ARB No. 10-078, ALJ No. 2010-SOX-14 (ARB Oct. 31, 2011)
COURT OF APPEALS DISMISSES CLAIMS UNDER SOX BECAUSE DEFENDANT IS A STATE AGENCY ENTITLED TO CATEGORICAL ELEVENTH AMENDMENT PROTECTION; PLAINTIFF FAILED TO STATE SUBSTANTIVE CLAIMS FOR RELIEF UNDER SOX §§ 806 AND 1107
In Hines v. Cal. Pub. Util. Comm'n , No. C-10-2813 EMC (N.D. Cal. Nov. 8, 2010), the Court of Appeals dismissed the plaintiff's retaliation claims under SOX because the California Public Utilities Commission is a state agency entitled to categorical Eleventh Amendment protection. In addition, the Court of Appeals found that the plaintiff failed to state substantive claims for relief under the Sarbanes-Oxley Act §§ 806 or 1107, as she asserted. Although CPUC appears to regulate publicly traded companies, it itself is not such a company, therefore, §806 is not applicable. The Court of Appeals noted that § 1107 is a criminal statute, and no court has expressly found that a private right of action may be brought under this statute. Even if a private right of action existed, § 1107 requires that a whistleblower provide information to a "law enforcement officer." Hines at 6. In this case, the plaintiff alleged that she reported her grievances to a company employee and the Deputy Director of CPUC; neither are "law enforcement officers" under § 1513(e). Thus, § 1107 does not apply.
NOERR-PENNINGTON IMMUNITY DOCTRINE; ARB DECLINES TO APPLY DOCTRINE TO SOX WHISTLEBLOWER CASES
In Rowland v. Prudential Equity Group, LLC , ARB No. 08-108, ALJ No. 2008-SOX-4 (ARB Jan. 13, 2010), the Complainant had filed an EEOC claim against the Respondent, and under NASD rules, the claim was referred to arbitration. The Complainant then sought to consolidate this claim with an action she had filed in federal district court. As a condition to dismissal of the arbitration without prejudice, the Complainant agreed to pay all of the Respondent's fees and costs connected with the arbitration matter, which amounted to $137,795.82. Several months later, the Complainant filed a SOX complaint with DOL. Later, the Respondent filed an action in federal district court seeking confirmation of the arbitration award. The district court granted the relief. The Complainant then filed a second SOX complaint with DOL alleging that the district court action to confirm the arbitration award was in retaliation for the filing of her previous SOX complaints. The ALJ dismissed the second DOL SOX complaint based on the Noerr-Pennington immunity doctrine. That doctrine was grounded in two antitrust cases, in which the U.S. Supreme Court held that those who petition the government for redress are immune from antitrust liability unless the petition is a sham.
On appeal, the ARB declined to extend the Noerr-Pennington doctrine to SOX cases. The ARB acknowledged that the case arose in the 9th Circuit, and that the 9th Circuit has extended the Noerr-Pennington to non-antitrust cases in all contexts. Nevertheless, the ARB cited 10th Circuit law to the effect that when applying the doctrine, a court must look at the underlying statute involved. The ARB noted that it had not found a case in the 9th Circuit applying the doctrine under Title VII, and absent any direct authority applying it in Title VII or whistleblower cases, it would not apply the doctrine to a SOX case.