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Whistleblower Ruling Threatens to Unleash Parasitic Aliens on the Law, Judge Warns

A Ninth Circuit decision interpreting Dodd-Frank to have broad whistleblower protections may have some far-reaching consequences, according to the ruling's lone dissenter. And he's not talking about disrupting administrative schemes for securities law enforcement.

Instead, the decision could risk unleashing a jurisprudential version of the parasitic alien from John Carpenter's horror classic "The Thing," according to the Ninth Circuit's Judge John B. Owens. Here's why.

Whistleblowers, Obamacare, and Aliens

The Ninth Circuit ruled last Wednesday that Dodd-Frank whistleblower protections aren't limited to those who report potential violations to the SEC; they can encompass internal whistleblowers as well.

You can read a fuller analysis of the case on our U.S. Ninth Circuit Blog, but the essential dispute was over whether Dodd-Frank's whistleblower provisions were limited by the act's definition of "whistleblower." That definition encompassed only those reporting to the Commission. But the act also extended protections to those who would qualify for protections under the Sarbanes-Oxley Act. The Sarbanes-Oxley Act includes protections for internal whistleblowers, and so too does Dodd-Frank, the Ninth ruled.

That's where the aliens come in, but only after Obamacare joined the debate.

The court's majority turned to King v. Burwell to find that "the use of a term in one part of a statute 'may mean a different thing' in a different part". In that 2015 case, the Supreme Court upheld Obamacare's tax credit scheme, explaining in a footnote that "the presumption of consistent usage" may be overcome by the context of the statute -- particularly when a law "is far from a chef d'ouevre of legislative draftsmanship."

It was that King cite that took up most of Judge Owens' brief dissent. He writes:

In my view, we should quarantine King and its potentially dangerous shapeshifting nature to the specific facts of that case to avoid jurisprudential disruption on a cellular level. Cf. John Carpenter's The Thing (Universal Pictures 1982).

A Great Horror Film, and a Great Citation

If you're not familiar with "The Thing," it's the early 80's classic that tells the tale of a shapeshifting alien. Buried in Antarctica for millennia, it's awoken by a research team and begins to take over their bodies and minds. Madness and murder ensue.

Judge Owens does seem to have a point. King's inconsistent treatment of terms could threaten to upend the certainty that legislative definitions are supposed to bring.

But that hardly seems the case here, where Dodd-Frank clearly references the provisions of an act that provides greater protection than its definition affords. Further, if Dodd-Frank's anti-retaliation provisions are ambiguous, administrative law would require courts to defer to the SEC's interpretation of those provisions -- an interpretation perfectly in line with the Ninth's.

But we digress. The important thing here is that a judge cf.'d "The Thing." And whether or not we agree with the judge's dissent, we can't help but be impressed by the great reference.

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