you know good morning my name is richard and gino and i represent the we and we have an amicus for the whistleblowers and we've agreed to give him five minutes so i plan to talk for eight minutes he will talk for five minutes and we're asking for two minutes of rebuttal and since we do have the individual from the whistle blowers who argue sylvester preference would be that questions directed specifically to the vestry might be best addressed to the amicus but let me start with something a little lighter we're hearing about big  small business creating jobs they also create pollution and they cause fraud and we're aware that statutes and regulations are passed for the purpose of things such as that so that when i appear before you today a couple of the preliminaries have already been decided by judge jordan on the panel that have to do with the situation as far as possibility which we kept hearing about this morning santiago judge jordan you authored there and also along you talked about the standard to review with regard to when you asked for it but also those two side issues i'm not going to address except to say that very recently along was decided in february this year santiago has decided in december of two thousand and ten so i would like to focus what the court did was to take pluto and basically look for specific and particular and when she looked at specific in particular she was looking yet even else she was not looking at the allegations and number thirty three of the allegation is directly on point and from thirty three to fifty six or directly on point if i could just call yes judge at least you wrote on it in a memorandum rejecting a motion for reconsideration she said you can't really i'm paraphrasing liberally here he really fault me for relying on home because  i can't grant you a motion for reconsideration unless there's an intervening in controlling law and the law your state is neither intervening or controlling i understand you'll have your friends talk about what sylvester is controlling but on that intervening i understood her to be saying sylvester had come down it came down before i cited  decision would have come down and we would have argued it with and i think her decision was in july so there was that six week period but i think judge jordan your your decision  whether we have a review for a reconsideration in terms of the riginal decision or not you're saying we're a bound by an abuse of discretion standard in reviewing the denial  reconsideration it would be an abuse of discretion in this case if the district court were wrong in saying that the heck require dismissal of a long complaint so it's not a question of intervening was judge broader wrong well let's see a show that i think you may have taken that that one language slightly out of context it's certainly true that by definition it's an abus discretion to be incorrect on the law as it stands at the time the decision is made but at the time the decision was made if nobody  guess i guess if nobody comes forward and says this is a law that indeed everybody is arguing the same case for the judge how how is it an abuse of discretion for the judge to take the law that's presented in argued by everybody and render a decision because wrong means wrong means wrongly decided which in this case means even if we looked at it as a court needs to look at things her decision based upon place put in words that aren't in the statute so it's violates the pla accept that sylvester's somehow controlling this it is not objective leave reasonable and i go with a reasonable belief system it's not objective we reasonable and is is that still your theory we already scrod that anytime somebody does something improper and it'll affect the value of the company and that means you know you're in my theory is that the law it's use is flawed it doesn't have to be securities fraud so i am in effect this drawing that position on the basis that paragraph thirty three we still stablished a pattern of rejecting and questioning expenses that did not meet standards set by accounting i was one the c and tax laws and regulations so it's not limited to the f c c we're talking about tax laws and record regulations which caused ethical concerns disappears authorized an island party with disturbing similarities to the past issues raised with dennis kozlowski such as the roman party which has lost is sitting in jail for fraud i mean concern within the context of his his back and ask was he doing what his job required to do was he reviewing expenses and asking questions is job absolutely because there he has to authorize it before a check would get issued he said if i was there because once he would not have happened that was one of our allegations so if he's if he's doing what his job requires asking could reasonably be interpreted or understood as an act of whistleblowing asking is a word questioning is another word in terms of statutes which you not explicitly protect complains to supervisors once you disassociate the whistleblowing with your right to go to your supervisor and raise a concern all of this duty related cases and everyone they cite to start coming into play congress in socks but a discussion or a complaint raised by the supervisor on the same legal prying as going in testifying to the  whether it can be whistleblowing under served under the right set of facts to go in and speak to the supervisor the question is on the facts alleged here is it fair to say that what was happening was whistleblowing or just the work of a person doing their job absolutely was supplying because  all whistle blowing starts with all of a ninety nine percent ninety five percent starts with an employee seeing something that's an indication of fraud or misconduct it is then reasonable in raising that concern with a supervisor to raise it as you would in a normal context of a job nothing in the law makes you cite to a statute or somehow elevated nothing forces an object of reasonable object of reasonableness means if a reasonable right it's a standard that is that apart from the individual and it and it implies that there is some unlawful behavior that's blown the whistle on so to speak like how how can you do how can you say we've got a case a securities fraud here or something even remotely like that unless objectively speaking the things that are available to be understood and communicated could be said to be securities fraud ok because you go back to the commonsense standard that actually predates to say valid but it's a balance predicated on an employee sees something on paper that looks like taxation has not been properly recorded there's some form of accounting error on a piece of paper exactly what passaic valley says bring it to your supervisor now if the supervisor says great job you found the era let's move on it would be patently unreasonable in objective way and reasonable for this person to go off on some campaign once it's been resolved but what passaic valley says in the heart of all these duty cases were supervisory complaints is that's the first step to the supervisor says no keep your mouth shut and now y whistleblower case is critical exactly like this court held and it's controlling precedent we believe to the department of labor because if you recall say fallon they've put reasonableness into a context and here's the back to the older cases of the secretary of labor relied upon and that went through its you're looking at an employee an employee who may be afraid to raise a concern and this is all well documented you want to encourage the employee to raise a objective we can justify that are you saying as soon as you say objective we can justify that isn't the objective reason of us the rich the reasonableness of  under so i say i think there's something bad going on here it's got to be one of the bad specifically name doesn't it in that in this that you know your honor the statute says any violation of a rule or regulation of the f c c there is no common law employee outside of the office of general counsel perhaps in a publicly traded company the knows where all those rules and question totally changes it because vester adopts passaic valley the controlling precedent that the concept of objective this is where the confusion is the real word in the word used in  objective is there has to be some type of factual basis within reason so if this person is looking at a spreadsheet and the numbers all add up but the employee says this spread sheets on the wrong color paper no one include faith could say the color paper means anything you look at the employee and in this case by claiming that taxes aren't being properly recorded and that's a point you why that's so critical in the context of socks white want to explain this about socks socks specifies things which are covered by whistle blowing right i mean if if sorry if the congress had wanted to say you're protected any time you want to say something that is i suppose it could have that right but they didn't they they tied it to certain specific things which are determined to be criminal under the united states co criminal things and violations of certain regulatory standards set by the c c anything that violates the rules or regulations criminal or things that things that are existing law it's not  on is well maybe i should ask you is that the national whistleblower center's position that sachs protects whistleblowers for anything that they think is morally reprehensible absolutely not or anything they think smells bad that absolutely not and i f something gets covered right and if you go back two percent bally that was a clean water act case so the concern of the employee had to be reasonable within a clean no need to cite to the statute no need to know if there really was of violation if it would be if it would be followed and this court binding because congress affirmed the decision congress ratified the reasoning of passaic valley the words are whether the employee was profoundly misguided so what i'm saying object it's a check that in the context without employ misguided in thinking there was a securities violation or insufficiently informed and given the complexity of s e c regulations congress was why is the point of this ache valley then the court goes congress looked at this and specifically cited to it and then inserted words in socks which were not in the clean water act to make it clear specifically the right to go to important and a case where you had a twelve b six dismissal to start with the right analytical framework and my adversaries mention that this is a valid case that is important here and it's important because the s valley involve this court in the review of administratively final decision but town and sylvester are not controlling precedent in this court and they weren't and they weren't around in the passaic valley context but in the say valley the third circuit looked at that what did the department of labor do was it supported by substantial evidence and to do that they looked at the way that the department applied its rules and regulations and interpretating the whistleblowing law under the clean water act here and the difference with sox is the sox eight zero six was a war statute is when you come to federal district court it's been know about meaning that one hundred eighty days as expired in front of the department of labor nothing has happened there's no administratively final decision and you come to a federal court and you start over you can't defer to an agency that didn't do anything what the appellants are asking this court to do is to adopt a every communication the only communications that were handled by mr wiesel in this case or by e mail and at worst you could say he was doing his job and he kicked it up stairs he said we need our tax accounting people to look at this and maybe said it doesn't matter how off the wall the employee may be in thinking that there was a securities a i think was a value is distinguished because this court and i put it in the passaic valley was was not when we are reviewing it in history of the final order it was when we're wondering what's protected conduct we ask ourselves was this in good faith and it doesn't matter how wildly off the mark the employee may have been if you if you take that to its logical conclusion you're going to throw the subject of reasonableness and object of reasonableness aspects of the analysis out the window and you can't do that you have a person who has an accounting function in a major corporation all the business expenses passover is that somebody rents a car to allegedly take a business trip and really what they did was take their child back to college and he says i don't think that's what genet because i have a subjectively reasonable for him to think that there's some fraud on shareholders that's material that he's engaged in a protected activity when he's going to do that now because it's not objectively reasonable to look at what he did under those in his had to think that there was a fraud occurring here there was no allegation whatsoever that there was a fraud anywhere well he went forward without him questioning and if they had paid for that event there would be at least the  less in the business legitimacy so what he caused tyco all the tronics to do was to look at event that had been planned and submitted by people that work there the good faith and from nobody question and tax and accounting departments looked at that they inquired of the people who are planning and putting the event together and they said over this couple days that that event was occurring we don't see enough of a business purpose there for our employees who attend are going to have income attributed to them and we're going to gross up that uncommon pay the taxes for that business this isn't was made without anybody ever saying there was a fraud on anybody so i'm not saying that congress is being set so congress  the side we have to look at this and say subducted an objectively reasonable look at the circumstances of what has gentleman how how should we understand the objective reasons we have an argument from mr cohn about how to do it he says if i understood correctly the objective reasonable this piece of this is simply is it is there an objective basis as in a discrepancy between numbers or a discrepancy from  company policy if i've understood him right that would allow or prompt somebody to to raise a question so if i if i got him i am sure he can correct me but i don't know if i follow his believe what i understood you to be objective piece of this is it can't be you know that the person is hallucinating there has to be some piece of evidence to prompt a question but it's not the case that the object of peace has to be that it the the employee has an understanding of what securities law concepts like materiality n c i enter things like that are right because that a person whose job was to look at the legitimacy of business expense pointed out that he had a question i mean pushed it off of the people that had the more specialized knowledge of tax and accounting rules to look at is i reasonable and plausible to think that when he did that someone from the outside would say he's looking at that and saying there is a fraud about to occur that's going to be must have a serious effect on shareholders in this company i don't think a reasonable person looking at that objectively and understanding and this is what products said looking at what mr we did in the job that he had at tyco i don't think that that's objectively reason or plausible to think that he was pointing out for us now is this is that the question that we're looking at here i want to take this to the procedural posture of the cases are we are we looking at whether she was wrong or whether there was a clear error of law law if you want to if you review it f or a clear legal error she applied the federal pleading standards to determine whether or not the story being told in this complaint was plausible and light of what she understood sarbanes oxley whistleblower and the only reason that judge prouder looked at what tom was on the issue of whether or not there was a requirement for the period of wesel blower to say this is the one of the six items listed and socks you know sex that i'm pointing to that happening with this conduct ok she looked at that again under still vaster and said you know what it doesn't matter this wasn't a protected activity because he was doing his job report that forestalls or prevents a violation i think if you open that door and that the novell contacts and federal courts people will wait one hundred eighty days and hope that the department of labor does nothing and they will come here and have an easier time people who do what their job requires is you can still get nailed to the wall for doing what your job requires if you supervisor things that you know involve the team and you're going to go running to the feds and blow the whistle every time the company decides to but that's not the case law currently requires with respect people doing their job and i think we need to again and i would conclude with this is my time wraps up here unless there are more questions we need to remember that this is different in this forum than the other whistleblowers that is because you can get into this court and know both position so starting over in federal court you major complaint the ocean you started there here and this was in the district court record after the hundred eighty days was up osha said there was no violation here osa said there was no causation between the events he reported and his alternate terminations so he filed as he didn't appeal that i think  actually did appeal a prophylactic leave didn't pursue it but filed an action here where the statute says it's the no about case you start over so we already know that osha found no violation and we're going to start here and get a bigger benefit of the doubt because we're going to lean towards listening to the administrative pleading standards which everybody knows are relaxed and aren't as rigorous as the twelve the six tenors in federal court that would turn pleading on its head and allow pretty much anybody the administrative agency controversy existed in whistleblower law for about twenty five years of course going to from directions the chamber of commerce cited to a lot of cases that went one way in stocks congress fixed  inserted the word resort to a supervisor in the statute which in their understanding was a ratification of all those cases that protected pure internal speech from the words of the macao we act court which the department of labor and congress decided to macao access at doing your job as an auditor to well that's protected activity that's mccowan back and and that's the line of cases they looked at when they switched it and so whole home is there is there so what is to prevent an employee who just is doing their job and doing it involves asking questions that when i'm called on the carpet for making a sexually suggestive remark to a coworker or pilfering money from the coffee room or or doing some other thing that disrupts the workforce and causes the company to say that this is when you that that i'm on touchable now you can't touch me because i asked you a question about our tax returns and i will as a whistleblower you know don't mess with me yeah and that can that really i'm already have been no no absolutely not because that's the causation issue and if and most of the whistleblower cases the survive unprotected activity issues and and they lose on causation you're talking causation but the other thing is i think if you look at the smoke that's i don't haze in other words causation i ask why are you fired when you are trying to ask your doctor you know about activity because of sexual harassment i'm trying to ask you about protective activity because i think i understood that last comment you made to be if you do your job quote to well you're in in protective act activity territory it's just doing your job is protected protected activity then what is a whistleblower it's all whistleblower no no because that's what you have to understand the difference between the pleading standards and and it's kind of spelled out and so pastor page fifteen which i call the court's attention to they say that the objective reasonableness standard often implies combinations of law in fact and that they usually need hearing and the and the witnesses can testify about hey what are you really raising those concerns about is it really plausible and that's in this case it was a twelve b six case they never had a hearing on that so the mere fact you can survive the pleading stage according to solve vaster does not mean you're going to survive at the hearing stage or the trial stage and their discussion of how the objective standard permits a court to apply objective reasonable your belief that you're engaged in was going you can you only have to be doing your job and tell your supervisor i'm wondering about expense you're good if in the context of that conversation most likely you're going to be protected the moment you say i'm wondering about that expense and i just want to state that there's a major policy for that because when the  looked at this when they set aside in our briefing of the section of the report this they said that you have to encourage is the reporting of any indication of fraud but was a fraud so usually discovered find a little thing out of place and made gets put back in place was never an issue but because frauds are designed to be hidden the key to detection is encouraging employees to report those little things through their chains of command where most reporting happens then see how it flows out but if you intimidate people or push them back at that very first step and that's where you're going to have a disaster i want to state that i think that in this particular case same burdens as in the whistleblower laws they want socks to be the same as in these other whistleblower laws as they had then you have the specific site to say bally and then you have the republican in a concurring minority opinion supporting some not supporting other specifically stating that they want this law to track those procedures already existing so congress looked after to say if our that's untrue on if that's true what are we can make of  you were that that's is not socks at all how does the stuff you just cited and the fact that passaic valley itself goes to pains to say you know these whistleblower statutes are a piece and specifically cites to the e r a and now you tell me the legislative history here they all meant to be a peace how come that one that one bit of mine health and safety case from one thousand nine hundred eighty nine that was also ratified which talked about a minor and talked about common sense reporting that most people go to the supervisor and it has to be just predicated on common sense from that decision which overturned the mine health and safety commission which said you've got to do more than just go to your supervisor an entire body of law developed to say it valley dealt with it was a