March 4, 2014 united States Supreme Court opinions

Lawson v FMR, LLC

Lawson sued FMR alleging retaliation in violation of the Sarbanes-Oxley whistleblower protection 18 USC 1514A. FMR moved to dismiss arguing that 1514A only applied to employees of the publicly listed company alleged to be committing fraud or other financial abuses. The district court denied the motion, but, the 1st circuit reversed accepting FMR’s argument. The Court, resolving a split of authority, reversed 6-3. The majority held that the operative language of 1514A naturally read to prohibit a contractor, like FMR, from retaliating against its own employees for whistleblowing about the public company, that the actions which constitute retaliation such as suspension and discharge can only be done by an employer to its own employees, that this reading was consistent with eh context of Sarbanes-Oxley which aimed at preventing frauds like Enron and that the coverage of personal employees of corporate executives  did not change the analysis. A four member plurality also argued that the legislative history and the provisions of an earlier anti-retaliatory statute which covered contractor employees supported the conclusion that 1514a covered contractor employees. Justices Scalia and Thomas added concurrence rejecting the legislative history and other anti-retaliatory act arguments, but, joining the majority opinion otherwise. The dissent argued that 1514A is ambiguous and limiting its scope to only the employees of the public company is consistent with the tiles of 1514A and avoids the absurd results that babysitters and nannies will be able to bring suits under 1514A. The dissent also argued that Congress can fix any holes in 1514A and actually did so as to the issue of contractor employees in later statute. The dissent noted that outside contractors like accountants and lawyers are subject to administrative discipline as well. The dissent finally argued that the administrative decisions cited by the majority are note entitled to deference as another agency is charged with implementing 1514A and the scope of employees covered is beyond the intent of Congress.

Law v Siegel

Law fraudulently claimed there was no equity in his house which was the only asset in his chapter 7 estate. The bankruptcy court ordered that his homestead exemption be surcharged to pay attorney fees incurred by Sigel, the trustee, in fighting the invalid lien. The 9th Circuit affirmed. The Court reversed. It held that any power the bankruptcy court had here to sanction misconduct was overridden by the bankruptcy code 522 which authorized the homestead exemption and did not make it subject to charge for administrative costs like attorney fees except for certain limited circumstances which are not present in this case. The Court noted that there were other sanctions available for abusive litigation in bankruptcy but the Court had no power to change the statutory balance of equities adopted by Congress in 522.

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