On February 21, 2018, the Supreme Court issued opinions in three cases: Digital Realty Trust v. Somers, Class v. United States, and Rubin v. Islamic Republic of Iran.
Digital Realty Trust v. Somers
In Digital Realty Trust, Inc. v. Somers, Paul Somers sued his former employer, Digital Realty Trust. Among his allegations was that he was terminated in retaliation for his internal disclosure of the corporation’s violations of the Sarbanes-Oxley Act of 2002, an action he claims violated the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Protection Act of 2010.
To improve accountability and transparency in financial markets, Dodd-Frank, which was passed in response to the subprime mortgage bubble and subsequent market collapse of 2008, incentivized whistleblowing by increasing damages awards for successful plaintiffs and giving increased protections for whistleblowers against retaliation by employers.
The question before the Court is the scope of the anti-retaliation protections in Dodd-Frank. Specifically, the Court must determine whether the protections apply to internal disclosures (in this case, Somers only disclosed to senior management at his company) or only to disclosures made to the Securities and Exchange Commission. The SEC issued a rule applying the anti-retaliation protection broadly, so that it would include people like Somers whose disclosures never left the company. The federal district court for the Northern District of California deferred to the SEC’s determination, and the Ninth Circuit upheld its decision on appeal.
The Supreme Court unanimously held that Dodd-Frank’s anti-retaliation protections do not extend to employees who fall outside of the Act’s definition of “whistleblower.” Hence, those who only make their disclosures internally, such as Paul Somers, are not covered.
In her opinion of the Court, Justice Ginsburg argued that the courts must follow a statute’s explicit definition, even if the statutory definition is different from the term’s ordinary meaning. The statute explicitly defines “whistleblower,” and this, she concluded, resolves the issue. The purpose of Dodd-Frank was to motivate people to report securities law violations to the SEC. Because Somers did not report his employer’s suspected behavior to the SEC, he could not be considered a whistleblower at the time of his termination and is therefore not eligible to seek relief under Dodd-Frank.
Justice Thomas wrote a concurrence, joined by Justices Alito and Gorsuch, in which he took issue with Ginsburg’s reliance on a Senate Report to discern the purpose of Dodd-Frank.
Justice Sotomayor also wrote a concurrence, joined by Justice Breyer, in which she criticized Justice Thomas’s refusal to consider a Senate Report for purposes of statutory interpretation. Using reliable legislative history, she wrote, “shows respect for and promotes comity with a coequal branch of Government.”
Class v. United States
The issue the Court faced in Class v. United States is whether a federal criminal defendant who enters a guilty plea is barred from challenging on direct appeal the constitutionality of the statute under which he was convicted.
In 2013, Rodney Class, was indicted for violating a federal statute banning individuals from having firearms on the grounds of the United States Capitol. Class asked the Federal District Court for the District of Columbia to dismiss the charges against him, arguing that the statute violated his Second Amendment and due process rights (he claimed he did not have fair notice that his firearms were banned from the parking lot in which they were discovered). The district court rejected his claims, and Class entered a guilty plea after accepting a plea deal. He then appealed his conviction to the Court of Appeals for the D.C. Circuit, making the same constitutional arguments that he did to the district court. The appellate court held that Class could not raise his constitutional claims because when he pled guilty, Class waived his right to appeal the constitutionality of the statute under which he was convicted.
In a 6-3 decision, the Supreme Court held that Class was not precluded from challenging the constitutionality of the statute of conviction on direct appeal. Justice Breyer wrote the majority opinion, explaining that the decision “flows directly from the Court’s prior decisions.”
Among the precedents he cited were Blackledge v. Perry, in which the Court determined that while a guilty plea may bar the appeal of “antecedent constitutional violations” preceding the plea, it does not bar a criminal defendant from challenging “the power of the State” to prosecute the defendant in the first place.
Breyer also cited Menna v. New York, in which the Court determined that by entering a guilty plea, a criminal defendant does not waive his right to appeal a charge that the “[s]tate may not constitutionally prosecute.”
Justice Alito wrote the dissent, and was joined by Justices Kennedy and Thomas. The dissent, which at eighteen pages long was nearly double the length of the brief majority opinion, laments the “muddle” the majority created. “The Court identifies no fewer than five rules for ascertaining the issues that can be raised,” Alito wrote. “How these rules fit together is anybody’s guess. And to make matters worse, the Court also fails to make clear whether its holding is based on the Constitution or some other ground.”
Rubin v. Islamic Republic of Iran
The third decision the Supreme Court announced on on February 21 was Rubin v. Islamic Republic of Iran. This case involved the Foreign Sovereign Immunities Act, which grants foreign states and their agencies and instrumentalities immunity from suit in the United States.
This case stemmed from three suicide bombings that Hamas carried out 1997 in a pedestrian mall in Jerusalem. The attack killed five people and injured nearly 200 others. Jenny Rubin and other petitioners are United States citizens who were wounded in the attack or whose close relatives were injured in it. They sued Iran in the District Court for the District of Columbia, accusing that country of training and materially supporting Hamas and thereby partially causing the bombing.
At the time, a federal statute was in effect that rescinded the immunity of foreign states that were designated state sponsors of terrorism with respect to claims arising out of terrorist acts. The District Court entered a default judgment in favor of the petitioners of $71.5 million. Iran did not pay that judgment, and the petitioners filed this lawsuit in the District Court for the Northern District of Illinois to attach and execute against Iranian assets in the United States—specifically a collection of about 30,000 clay tablets engraved with ancient writings. These tablets are known as the Persepolis Collection and are at the University of Chicago’s Oriental Institute. Archaeologists from the university found the artifacts while excavating Persepolis in the 1930’s, and Iran lent the collection to the institute for research, cataloging and translation. The District Court rejected the petitioners’ claim and held that the collection is entitled to the immunity typically granted to foreign states’ property. The Court of Appeals for the Seventh Circuit then affirmed that judgment.
This case presented the question of whether §1610(g) provides an independent exception to immunity which would allow a judgment holder under §1605 A of the statute to attach and execute against any property of the foreign state, regardless of whether other provisions in §1610 deprive the property of immunity.
Before the Supreme Court, Rubin made several textual arguments: that “as provided in this section” refers to a specific provision in §1610; that Congress may have intended “this section” to refer only to the instruction in §1610(f)(2) that the U.S. government help in identifying assets; and that “this section” could be a drafting error intending to refer to §1083 of the law in which §1610(g) was enacted, the NDAA.
Justice Sotomayor delivered the opinion of the Court, joined by all of her colleagues except Justice Kagan, who recused herself because she had been involved in the case as U.S. Solicitor General. The Court affirmed the Seventh Circuit’s decision, holding that the best reading of the relevant statute meant that this collection, like most foreign states’ property in the United States, was immune from attachment and execution.
This post was written by ISCOTUS Fellows Eva Dickey, Chicago-Kent Class of 2020, Elisabeth Heiber, Chicago-Kent Class of 2019, and Bridget Flynn, Chicago-Kent Class of 2019. It was edited by ISCOTUS Editorial Coordinator Anna Jirschele, Chicago-Kent Class of 2018, and ISCOTUS Co-Director and Chicago-Kent faculty member Christopher Schmidt.