PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DAVID R. STONE, 

Plaintiff-Appellant,

v.

INSTRUMENTATION LABORATORY

COMPANY; BRIAN DURKIN; ANN

DEFRONZO; RAMON BENET,

Defendants-Appellees,

and  No. 08-1970

INSTRUMENTATION LABORATORY SPA,

Defendant.

GOVERNMENT ACCOUNTABILITY

PROJECT; NATIONAL WHISTLEBLOWER

LEGAL DEFENSE AND EDUCATION

FUND,

Amici Supporting Appellant. 
DAVID R. STONE, 

Plaintiff-Appellant,

v.

INSTRUMENTATION LABORATORY

COMPANY; BRIAN DURKIN; ANN

DEFRONZO; RAMON BENET,

Defendants-Appellees,

and  No. 08-2196

INSTRUMENTATION LABORATORY SPA,

Defendant.

GOVERNMENT ACCOUNTABILITY

PROJECT; NATIONAL WHISTLEBLOWER

LEGAL DEFENSE AND EDUCATION

FUND,

Amici Supporting Appellant. 

Appeals from the United States District Court

for the District of Maryland, at Baltimore.

William D. Quarles, Jr., District Judge.

(1:07-cv-03191-WDQ)

Argued: September 23, 2009

Decided: December 31, 2009

Before NIEMEYER and SHEDD, Circuit Judges,

and Mark S. DAVIS, United States District Judge for the

Eastern District of Virginia, sitting by designation.

2 STONE v. INSTRUMENTATION LABORATORY COMPANY
Vacated and remanded by published opinion. Judge Davis

wrote the opinion, in which Judge Niemeyer and Judge Shedd

joined.

COUNSEL

ARGUED: Adam Augustine Carter, EMPLOYMENT LAW

GROUP, PC, Washington, D.C., for Appellant. Robert

Michael Shea, MORSE, BARNES-BROWN & PENDLETON, PC, Waltham, Massachusetts, for Appellees. ON

BRIEF: R. Scott Oswald, EMPLOYMENT LAW GROUP,

PC, Washington, D.C., for Appellant. Scott J. Connolly,

MORSE, BARNES-BROWN & PENDLETON, PC, Waltham, Massachusetts, for Appellees. Richard R. Renner,

NATIONAL WHISTLEBLOWER LEGAL DEFENSE AND

EDUCATION FUND, Washington, D.C.; Thomas Devine,

Legal Director, Kasey Dunton-Dermont, GOVERNMENT

ACCOUNTABILITY PROJECT, Washington, D.C., for

Amici Supporting Appellant.

OPINION

DAVIS, District Judge:

In this appeal, we address the interpretation of a provision

of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, governing the filing of whistleblower lawsuits in federal district

court. The parties acknowledge that the Sarbanes-Oxley Act

expressly provides a United States District Court jurisdiction

to entertain a whistleblower action. However, they disagree as

to whether a whistleblower plaintiff, during the pendency of

an administrative appeal of an Administrative Law Judge’s

("ALJ") ruling, has the right to a de novo proceeding in district court. In the absence of guidance from this Court, or

other circuit courts, the district court granted the defendants’

STONE v. INSTRUMENTATION LABORATORY COMPANY 3
motion to dismiss the district court action in favor of remand

to the appropriate administrative body for further proceedings.

In light of the language of the statutory provisions at issue, we

reverse the district court and remand for further proceedings

consistent with this opinion.

I.

David Stone ("Stone" or "Appellant") was employed by

Instrumentation Laboratory Company ("ILC") from 1999

through 2006. ILC is in the business of developing, manufacturing, and distributing critical care and diagnostic instruments, as well as other related products and services, for use

primarily in hospital laboratories. Stone began as an ILC

Sales Representative in 1999, was promoted to Sales Manager

in 2002, and was again promoted in 2005 to Director of

National Accounts. During his employment at ILC, Stone

received numerous accolades for his performance.1

As Director of National Accounts, one of Stone’s responsibilities was working with Group Purchasing Organizations

("GPOs"), which are strategic affiliations of hospitals that

concentrate buying power in order to negotiate lower prices.

ILC had contracts with various GPOs requiring that, among

other things, ILC maintain a GPO membership database, offer

contractually negotiated prices and terms to GPO members,

and pay administrative fees to GPOs equal to three percent of

sales revenue generated from member purchases. ILC has

acknowledged in public disclosures to shareholders that GPOs

are a critical part of its distribution strategy.

After assuming his role as Director of National Accounts,

1As the instant appeal challenges the district court’s dismissal under

Federal Rule of Civil Procedure 12(b)(6), "we accept as true all wellpleaded allegations and view the complaint in the light most favorable to

[Stone]." Venkatraman v. REI Systems, Inc., 417 F.3d 418, 420 (4th Cir.

2005). 

4 STONE v. INSTRUMENTATION LABORATORY COMPANY
Stone learned that Brian Durkin ("Durkin"), one of Stone’s

superiors at ILC, was not accurately tracking, reporting, and

paying the required administrative fees to GPOs. Durkin’s

omissions resulted in a multi-year cumulative liability of at

least half a million dollars and threatened ILC’s ability to sell

products to most of its customers. Stone’s Complaint asserts

that Durkin’s failure to maintain adequate internal controls

and track administrative fees resulted in ILC "misrepresenting

its financial condition to shareholders." (Compl. ¶ 70.)

Stone’s discovery regarding administrative fees prompted him

to perform additional investigation into ILC’s internal controls, and such investigation revealed numerous weaknesses.

From September of 2005 until March of 2006, Stone

repeatedly voiced his concerns about deficient internal controls and unpaid GPO fees to Durkin and two other ILC managers.2

 Stone’s efforts were repeatedly met with resistance and

even unequivocal refusals to correct the problems. Stone contends that Appellees retaliated against him after he brought

such deficiencies to light, and that such retaliation culminated

in Stone’s termination in March of 2006.

II.

A.

On June 19, 2006, pursuant to the Sarbanes-Oxley Act,

Stone filed a retaliation claim with the Occupational Safety

and Health Administration ("OSHA"), which hears such

claims on behalf of the Secretary of Labor ("the Secretary").

OSHA issued its preliminary findings on January 3, 2007,

more than 180 days after Stone’s claim was filed. Pursuant to

the governing regulations, Stone timely objected to OSHA’s

findings and requested a hearing before an ALJ. On March 1,

2Stone’s Complaint names all three superiors as defendants: Brian

Durkin, Ann DeFronzo, and Ramon Benet. ILC and the individually

named ILC managers are referred to herein collectively as "Appellees." 

STONE v. INSTRUMENTATION LABORATORY COMPANY 5
2007, Appellees filed a motion for summary decision before

the ALJ. In response, Stone moved to delay consideration of

such motion to permit him to take discovery. Stone’s motion

for discovery was denied,3 and the ALJ granted Appellees’

motion for summary decision on September 6, 2007. Stone

thereafter successfully petitioned the Administrative Review

Board ("ARB") for review of the ALJ’s order. On October 1,

2007, the ARB established a briefing schedule, which was

thereafter modified by the ARB on Stone’s motion.

On November 8, 2007, more than a month before Stone’s

initial brief was due under the modified briefing schedule,

Stone filed a notice with the ARB stating his intention to

bring a de novo action in federal district court. The ARB then

issued an order to show cause why the administrative appeal

should not be dismissed. After Appellees failed to respond,

and after receiving notice from Stone that he had in fact filed

suit in federal court, the ARB dismissed the administrative

appeal. Such dismissal was not based on the merits, but

appears to be an acknowledgment that, no "bad faith" having

been alleged by ILC, the ARB lost jurisdiction over the matter

once Stone’s complaint was filed in district court.

B.

Stone’s Sarbanes-Oxley Act whistleblower suit was filed in

the United States District Court for the District of Maryland

on November 26, 2007. On March 27, 2008, Appellees timely

filed a motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(6). After the matter was fully briefed, on July

1, 2008, the district court granted such motion based on preclusion principles, finding that the ALJ’s ruling was a "final

3Stone had previously agreed, during a telephone status conference, that

discovery would be stayed pending the ALJ’s ruling on the motion for

summary decision. Notwithstanding such inconsistent positions, there is

no allegation that Stone acted in "bad faith" to delay the administrative

process. 

6 STONE v. INSTRUMENTATION LABORATORY COMPANY
judgment on the merits" for purposes of collateral estoppel.

(J.A. 168-69.) In so ruling, the court rejected Stone’s claim

that he did not have a "full and fair opportunity to litigate his

claims before the ALJ" and indicated that permitting Stone to

pursue relief in federal district court would be "wasteful."

(J.A. 169.) The district court did, however, "issue a mandamus to the [Department of Labor] to re-instate proceedings"

and further ordered the ARB "to rule on the merits of Stone’s

appeal within 90 days . . . ." (J.A. 169.) 

Although the district court granted the motion to dismiss

and ordered further administrative proceedings, it did not dismiss the civil action before it, opting instead to stay the proceedings. Stone thereafter sought certification to file an

appeal to this Court, but that motion was ultimately denied.

Stone declined to further prosecute his administrative appeal

before the ARB because he believed that the filing of his

complaint in district court divested the ARB of jurisdiction.

Based on Stone’s failure to prosecute, the ARB entered a final

order of dismissal and Stone thereafter obtained a final judgment from the district court on his dismissed whistleblower

claim. Stone now appeals the dismissal of his district court

action. 

III.

A.

The instant appeal presents a question of statutory interpretation, which is a question of law that we review de novo.

United States v. Turner, 389 F.3d 111, 119 (4th Cir. 2004).

Appellant argues that the plain meaning of the relevant statute

could not be clearer, and that as a Sarbanes-Oxley whistleblower complainant he is entitled to a de novo review in federal district court because the Secretary did not reach a "final

decision" within 180 days, as required by the Sarbanes-Oxley

Act. In contrast, Appellees contend that the language of the

Sarbanes-Oxley Act and its regulations do not abrogate the

STONE v. INSTRUMENTATION LABORATORY COMPANY 7
district court’s long-recognized power to apply principles of

preclusion to avoid duplicative litigation. Both sides agree

that there is no apparent guidance from federal circuit courts

on the proper interpretation of the relevant provision of this

relatively new statute.4

"When interpreting statutes we start with the plain language." U.S. Dep’t of Labor v. N.C. Growers Ass’n, 377 F.3d

345, 350 (4th Cir. 2004). Under the first and "cardinal canon"

of statutory construction, "courts must presume that a legislature says in a statute what it means and means in a statute

what it says." Conn. Nat’l Bank v. Germain, 503 U.S. 249,

253-54 (1992). Accordingly, when a statute is unambiguous,

"this first canon is also the last: ‘judicial inquiry is complete.’" Id. at 254 (quoting Rubin v. United States, 449 U.S.

424, 430 (1981)); United States v. Pressley, 359 F.3d 347,

349 (4th Cir. 2004). Courts will not, however, adopt a "literal"

construction of a statute if such interpretation would thwart

the statute’s obvious purpose or lead to an "absurd result."

Chesapeake Ranch Water Co. v. Board of Comm’rs of Calvert

County, 401 F.3d 274, 280 (4th Cir. 2005).

Only when a statute is silent or ambiguous regarding the

precise question at issue is it appropriate to defer to an administrative agency’s interpretative regulations and only then if

such interpretation is reasonable. Midi v. Holder, 566 F.3d

132, 136-37 (4th Cir. 2009); Yashenko v. Harrah’s NC Casino

4The court below noted the lack of case law interpreting the relevant

Sarbanes-Oxley Act provision and cited to two district court cases, one of

which squarely addressed the question before the district court. (J.A. 166-

68.) See Allen v. Stewart Enters., No. 05-4033 (E.D. La. Apr. 6, 2006)

(unpublished) (giving preclusive effect to the ALJ’s ruling on the plaintiff’s administrative whistleblower claim and granting a petition for mandamus that effectively remanded the case to the ARB for further

proceedings); Hanna v. WCI Cmtys., Inc., 348 F. Supp. 2d 1322 (S.D. Fla.

2004) (finding that OSHA’s preliminary findings do not have preclusive

effect, but suggesting that the result may be different after an ALJ conducts a hearing and issues a ruling). 

8 STONE v. INSTRUMENTATION LABORATORY COMPANY
Co., 446 F.3d 541, 549 n.1 (4th Cir. 2006). If the plain language of the statute resolves the question and "the intent of

Congress is clear, that is the end of the matter; for the court,

as well as the agency, must give effect to the unambiguously

expressed intent of Congress." Chevron U.S.A. Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).

B.

The Sarbanes-Oxley Act provides employees of publicly

traded companies with whistleblower protection, prohibiting

employers from terminating, or otherwise retaliating against,

such employees when they report "potentially unlawful conduct" that has occurred or is in progress, Welch v. Chao, 536

F.3d 269, 275 (4th Cir. 2008); Livingston v. Wyeth, Inc., 520

F.3d 344, 352 (4th Cir. 2008). Specifically, section 806 of the

Act, titled "Civil action to protect against retaliation in fraud

cases," provides:

No [publicly-traded company], or any officer,

employee, . . . or agent of such company, may discharge, demote, suspend, threaten, harass, or in any

other manner discriminate against an employee in

the terms and conditions of employment because of

any lawful act done by the employee—

(1) to provide information . . . the employee reasonably believes constitutes a violation of section 1341

[mail fraud], 1343 [wire fraud], 1344 [bank fraud],

or 1348 [securities fraud], any rule or regulation of

the Securities and Exchange Commission, or any

provision of Federal law relating to fraud against

shareholders, when the information or assistance is

provided to . . .

. . . a person with supervisory authority over the

employee . . . .

STONE v. INSTRUMENTATION LABORATORY COMPANY 9
18 U.S.C. § 1514A(a); see also Welch, 536 F.3d at 275; Livingston v. Wyeth, Inc., 520 F.3d 344, 351 (4th Cir. 2008). In

order to pursue an alleged violation of § 1514A(a), an

employee or former employee of a publicly traded company

must adhere to the procedure set forth in § 1514A(b), which

states than an aggrieved individual may seek relief by:

(A) filing a complaint with the Secretary of Labor;

or

(B) if the Secretary has not issued a final decision

within 180 days of the filing of the complaint and

there is no showing that such delay is due to the bad

faith of the claimant, bringing an action at law or

equity for de novo review in the appropriate district

court of the United States, which shall have jurisdiction over such an action without regard to the

amount in controversy.

18 U.S.C. § 1514A(b)(1) (emphasis added).

The Department of Labor’s ("DOL") regulations implementing § 1514A set forth the procedure governing the

administrative review process for such whistleblower claims

as well as the procedure for notifying the DOL of a complainant’s intent to file suit in federal court for lack of a "final"

administrative decision within 180 days. To the extent that

such regulations fill in procedural gaps left by the statute and

do not conflict with statutory language, we afford them deference. See Yashenko, 446 F.3d at 549 n.1 (quoting Chevron,

467 U.S. at 844) ("We review legislative regulations (those

filling explicit gaps in the statute) to ensure they are not ‘arbitrary, capricious, or manifestly contrary to the statute,’ while

reviewing interpretive regulations (those clarifying terms and

provisions of the statute) for reasonableness."). 

The first DOL administrative ruling on a Sarbanes-Oxley

whistleblower claim takes the form of preliminary OSHA

10 STONE v. INSTRUMENTATION LABORATORY COMPANY
findings, which can thereafter be challenged before an ALJ.

29 C.F.R. § 1980.106(a). The ALJ’s decision on such a challenge "will contain appropriate findings, conclusions, and an

order . . . ." Id. § 1980.109(a). A complainant can further challenge an adverse ALJ ruling through the filing of a "petition

for review" with the ARB. Id. § 1980.110(a). If the ARB does

not accept the petition for review, then the "decision of the

[ALJ] will become the final order of the Secretary . . . ." Id.

§ 1980.110(b). If, however, the ARB accepts a complainant’s

petition for review, "the decision of the administrative law

judge will be inoperative unless and until the Board issues an

order adopting the decision . . . ." Id. (emphasis added).5

After the Secretary issues a final decision, the Act provides

that such decision can be appealed directly to the appropriate

circuit court of appeals. See 18 U.S.C. § 1514A(b)(2)(A); 49

U.S.C. § 42121(b)(4). However, if a "final" administrative

decision has not been timely issued and a complainant desires

de novo review in district court, the DOL regulations provide

that a complainant must file a "notice of his or her intention

to file such a [federal] complaint." 29 CFR § 1980.114(b).

The notice must be provided fifteen days in advance of filing

the federal suit, and should be filed with "the [ALJ] or the

[ARB], depending on where the proceeding is pending." Id.

(emphasis added).

With the above statutory and regulatory backdrop, we now

turn to the central question before us — whether the district

court had authority to dismiss Stone’s complaint by applying

preclusion principles. 

5We defer to the DOL’s established procedure for processing and ruling

on an administrative whistleblower claim, and such procedure necessarily

defines what constitutes a "final decision" of the Secretary. Such deference to the DOL’s reasonable implementation of the Sarbanes-Oxley Act

is appropriate regardless of whether the court views the DOL’s procedural

scheme as merely "filling explicit gaps in the statute" or "clarifying" the

phrase "final decision" as used in the statute. Yashenko, 446 F.3d at 549

n.1. 

STONE v. INSTRUMENTATION LABORATORY COMPANY 11
C.

The relevant portion of the Sarbanes-Oxley whistleblower

statute states that an aggrieved individual may bring "an

action at law or equity for de novo review in the appropriate

district court of the United States" if a final decision has not

been issued by the Secretary of Labor within 180 days after

the filing of an administrative complaint. 18 U.S.C.

§ 1514A(b)(1)(B). Starting, as we must, with the text of the

statute, we find the above quoted language to be plain and

unambiguous. It is undisputed that, here, the Secretary did not

issue a final decision within 180 days and that Stone followed

the procedure set forth in the regulations to exercise his statutory right to seek relief in district court.

Although the action in district court was properly filed and

the court acknowledged its jurisdiction over the suit, in granting Appellees’ motion to dismiss, the district court relied on

its inherent power to apply preclusion principles, issue a mandamus, and order the DOL to re-instate administrative proceedings. (J.A. 168-69.) The district court explained that

because Stone had "a full and fair opportunity to litigate his

claims before an ALJ, which resulted in a final judgment on

the merits, it would be wasteful to relitigate the[ ] claims" in

district court. (J.A. 169.) In reaching such conclusion, the district court relied in part on the Secretary’s public comments

on § 1514A, as well as on a similar finding by an out of circuit district court in Allen v. Stewart Enterprises, Inc., No. 05-

4033 (E.D. La. Apr. 6, 2006) (unpublished).

In applying preclusion principles, the district court strayed

from the plain and unambiguous meaning of

§ 1514A(b)(1)(B). The district court need not have reached

any DOL interpretive regulations, or the Secretary’s comments to such regulations, to define a complainant’s right to

a de novo review in district court. The text of the statute is

clear — if the DOL has not reached a final decision within the

time period established by Congress, a complainant has the

12 STONE v. INSTRUMENTATION LABORATORY COMPANY
statutory right not merely to undefined relief in another

forum, but to "de novo review" in federal district court. 18

U.S.C. § 1514A(b)(1)(B). A plaintiff’s right to pursue such

relief is not circumscribed in any manner by the statute. 

Appellees argue, however, that although the statute does

not preclude a plaintiff from seeking such relief, nothing in

the text of the statute, its procedural regulations, or its legislative history, "abrogate[s] the District Court’s long-recognized

power to prevent needless duplicative litigation by applying

collateral estoppel." (Appellees’ Brief 17.) Although we agree

that district courts generally have the ability to give preclusive

effect to final administrative rulings, Collins v. Pond Creek

Mining Co., 468 F.3d 213, 217 (4th Cir. 2006), we reject

Appellees’ interpretation of the instant statute since such construction reads out of the statute the phrase "de novo review."

18 U.S.C. § 1514A(b)(1)(B). As we have previously stated,

"[b]y definition, de novo review entails consideration of an

issue as if it had not been decided previously."United States

v. George, 971 F.2d 1113, 1118 (4th Cir. 1992); see Betty B

Coal Co. v. Director, Office of Workers’ Compensation Programs, United States Dep’t of Labor, 194 F.3d 491, 499 (4th

Cir. 1999) ("The sum of a de novo review and a de novo process is a new adjudication."). Accordingly, although the statute does not expressly state that a district court’s ability to

apply preclusion principles is "abrogated," the statute

expressly requires the district court to consider the merits

anew. Taking steps that, in effect, defer to the agency is in

direct conflict with the statute’s mandate that the district court

consider the issue "as if it had not been decided previously."

George, 971 F.2d at 1118.6

6

 We recognize that in reviewing de novo questions of law when there

is final agency action we sometimes defer to the agency’s statutory interpretation. See, e.g., Welch, 536 F.3d at 276 ("Under the Administrative

Procedure Act . . . [w]e review questions of law de novo, giving deference

to the ARB’s interpretation of § 1514A."). However, the procedural posture of this matter, involving the initiation of a new case in district court

STONE v. INSTRUMENTATION LABORATORY COMPANY 13
To further clarify the import of Congress’s establishment of

a right to "de novo review," we have previously discussed in

detail the difference between preclusive findings of state ALJs

on § 1983 claims, and non-preclusive findings of state ALJs

on Title VII claims. Rao v. County of Fairfax, Va., 108 F.3d

42, 45 (4th Cir. 1997); Layne v. Campbell County Dept. of

Social Servs., 939 F.2d 217, 219 (4th Cir. 1991). Such distinction exists because the language and legislative history of

Title VII establish that administrative findings are entitled to

a level of deference that is "something less than preclusion."

Rao, 108 F.3d at 45; see University of Tenn. v. Elliott, 478

U.S. 788, 795-99 (1986) (recognizing Congress’s authority to

create a statutory scheme that does not afford preclusive

effect to prior administrative fact finding). 

Here, the controlling statute does not provide that a district

court give any deference to prior administrative findings but

instead requires performance of a de novo review.7 Accorddue to the absence of final agency action, is starkly different from Welch,

and similar cases, where an agency’s final decision is reviewed by this

Court in the first instance. Tellingly, here, not only is there no final agency

action to which to defer, but a district court’s review under

§ 1514A(b)(1)(B) is not review of a question of law, it is consideration of

the Sarbanes-Oxley complaint as if the complaint had been filed initially

in district court. As we noted in Welch, deference is appropriate when it

appears that Congress expects the agency to speak with the force of law,

but nothing in § 1514A(b)(1)(B) suggests that Congress intended non-final

agency actions, or the Secretary’s comments regarding how a district court

will conduct de novo review, "to speak with the force of law." Id. at 276

n.2 (quoting United States v. Mead Corp., 533 U.S. 218, 229 (2001)). 

7

 Appellees argue that even though the ALJ’s ruling was not the DOL’s

"final decision," as per the controlling regulations, it was "final" for purposes of collateral estoppel. See E.I. Du Pont de Nemours & Co. v. Richmond Guano Co., 297 F. 580, 583 (4th Cir. 1924) (indicating that a federal

district court’s ruling can have preclusive effect while an appeal is pending). We need not, however, reach the question of whether an ALJ’s ruling, while being appealed administratively, can have preclusive effect in

federal court because even if preclusion principles are generally applicable

14 STONE v. INSTRUMENTATION LABORATORY COMPANY
ingly, deferring to the administrative agency, even if more

efficient, is in direct conflict with the unambiguous language

of the Sarbanes-Oxley Act. Astoria Federal Sav. & Loan

Ass’n v. Solimino, 501 U.S. 104, 108 (1991) ("Courts do not,

of course, have free rein to impose rules of preclusion, as a

matter of policy, when the interpretation of a statute is at

hand[,] . . . [and] the question is not whether administrative

estoppel is wise but whether it is intended by the legislature."). 

D.

As the plain language of § 1514A(b)(1) mandates a de novo

review by the district court which will, if an ALJ has already

issued a ruling, likely result in some duplication of efforts, we

next consider whether such literal interpretation of the statute

leads to an "absurd result." Chesapeake Ranch Water Co., 401

F.3d at 280; see Aremu v. Dep’t of Homeland Security, 450

F.3d 578, 583 (4th Cir. 2006) ("[A] court must, if possible,

interpret statutes to avoid absurd results."). 

In support of the contention that it would be "absurd" to

permit de novo review in district court following a full hearin such scenario, here, Congress’s creation of the statutory right to "de

novo review" in district court would trump such general rule. See id. at

583 (indicating that the lower court’s finding only has preclusive effect

when, on appeal, "it is not . . . tried de novo, but the record made below

is simply re-examined and the judgment is either vacated or affirmed

. . . ."); see also Restatement (Second) of Judgments § 83(4) (1982) ("An

adjudicative determination of an issue by an administrative tribunal does

not preclude relitigation of that issue in another tribunal if according preclusive effect to determination of the issue would be incompatible with a

legislative policy that: (a) The determination of the tribunal adjudicating

the issue is not to be accorded conclusive effect in subsequent proceedings; or (b) The tribunal in which the issue subsequently arises be free to

make an independent determination of the issue in question.") (emphasis

added); id. cmt. a ("The application of this Section is subject to statutory

provisions that may, expressly or by implication, govern the res judicata

effect of the determinations of a particular tribunal.") (emphasis added).

STONE v. INSTRUMENTATION LABORATORY COMPANY 15
ing before an ALJ, Appellees rely in part on the Secretary of

Labor’s comments to the regulations implementing

§ 1514A(b)(1). After explaining that the text of the SarbanesOxley whistleblower provisions is "unique" because it creates

the possibility that a complainant will turn to a district court

while an appeal is pending before the ARB, the Secretary

opines:

The Secretary believes that it would be a waste of

the resources of the parties, the Department, and the

courts for complainants to pursue duplicative litigation. The Secretary notes that the courts have recognized that, when a party has had a full and fair

opportunity to litigate a claim, an adversary should

be protected from the expense and vexation of multiple lawsuits and that the public interest is served by

preserving judicial resources by prohibiting subsequent suits involving the same parties making the

same claims. . . . Therefore, the Secretary anticipates

that Federal courts will apply [preclusion] principles

if a complainant brings a new action in Federal court

following extensive litigation before the Department

that has resulted in a decision by an administrative

law judge or the Secretary. Where an administrative

hearing has been completed and a matter is pending

before an administrative law judge or the Board for

a decision, a Federal court also might treat a complaint as a petition for mandamus and order the

Department to issue a decision under appropriate

time frames.

Procedures for the Handling of Discrimination Complaints

Under Section 806 of the Corporate and Criminal Fraud

Accountability Act of 2002, Title VIII of the Sarbanes-Oxley

Act of 2002, 69 F.R. 52104, 52111-12 (Aug. 24, 2004)

(emphasis added). The Secretary goes on to note that although

public comments to the regulations suggested that the DOL

"specifically incorporate preclusion principles" into the regu16 STONE v. INSTRUMENTATION LABORATORY COMPANY
lations, such step was not taken because "there is no statutory

basis for including preclusion principles in the[ ] regulations

. . . ." Id.

Notwithstanding the Secretary’s "anticipation" on how

courts will interpret and apply § 1514A(b)(1), the Secretary’s

invitation to transform a right to de novo review in district

court into a request for mandamus cannot be squared with the

statutory language chosen by Congress. Although, in the eyes

of the Secretary, Congress’s decision to permit duplication of

efforts is problematic, neither Appellees nor the Secretary

present a compelling argument as to why such duplication is

"absurd." Congress unquestionably chose an aggressive timetable for resolving whistleblower claims and reasonably created a cause of action in an alternative forum should the DOL

fail to comply with such schedule.8 A natural result of the

aggressive timeframe is that efforts will be duplicated when

the DOL engages in a thorough, yet administratively non-

"final", process that fails to resolve the administrative case

within the prescribed timeframe. Neither the Secretary nor the

courts have the authority to engage in creative interpretation

of the statute to avoid duplication of efforts, even if the goal

for doing so is laudable. See Lamie v. U.S. Trustee, 540 U.S.

526, 538 (2004) (indicating that the Court’s "unwillingness to

soften the import of Congress’ chosen words even if [the

Court] believe[s] the words lead to a harsh outcome is longstanding" and results from both deference to the Legislature’s

supremacy and recognition of the fact that members of Congress typically vote based on a bill’s language).

8The benefit of the aggressive timetable established by Congress does

not inure solely to the benefit of complainants, as § 1514A presents complainants an extremely limited window to file a claim, providing that a

whistleblower action "shall be commenced not later than 90 days after the

date on which the violation occurs." 18 U.S.C. § 1514A(b)(2)(D). The fact

that the statute requires both the DOL and the complainant to act swiftly

further evidences the weight Congress placed on the timely resolution of

whistleblower claims. 

STONE v. INSTRUMENTATION LABORATORY COMPANY 17
Regardless of whether the DOL has, in practice, found it

unrealistic to comply with Congress’s aggressive timetable,9

Congress plainly has the authority, in balancing speed against

resources, to rationally weigh timeliness as a more compelling

concern and provide that proceedings begin anew in district

court if the DOL is unable to reach a final decision within 180

days. See Elliott, 478 U.S. at 799 n.7 ("Congress of course

may decide, as it did in enacting Title VII, that other values

outweigh the policy of according finality to . . . administrative

factfinding."). If the aggressive statutory timetable is unworkable in practice, the remedy must be provided by Congress,

not the courts, as we do not reweigh policy determinations

made by the legislature. See Lamie, 540 U.S. at 538 (highlighting longstanding policy of deferring to words chosen by

Congress); United States v. Noland, 517 U.S. 535, 541 n.3

(1996) ("[Defendant] may or may not have a valid policy

argument, but it is up to Congress, not this Court, to revise

[the statutory framework].").

We therefore find that a literal interpretation of the statute

does not lead to an "absurd result." In so finding, we reject as

contrary to the statute the Secretary’s "suggestion" that district courts apply preclusion principles to effectuate a goal of

efficiency. First, as noted above, the plain text of the statute

expressly provides a complainant the right to de novo review.

Second, the DOL’s own regulations acknowledge that a district court action may be filed while an appeal is pending

before the ARB. See 29 CFR § 1980.114(b) (requiring that the

ARB be notified of intent to file a federal suit if an ALJ’s ruling is on appeal to the ARB). Third, even though preclusion

principles are generally favored, "[c]ourts do not, of course,

have free rein to impose rules of preclusion" if it was not

intended by the legislature. Astoria, 501 U.S. at 108. Fourth,

9The ARB noted in a footnote to its November 15, 2007 Order to Show

cause that: "As is the usual case, by the time the Board received the petition for review, the 180-day period for deciding the case had already

expired." (J.A. 105.) 

18 STONE v. INSTRUMENTATION LABORATORY COMPANY
any contention that Congress’s decision, to permit what may

amount to duplicative review, is "absurd" is countered by the

reality that Sarbanes-Oxley whistleblower cases involve fact

patterns where time is of the essence since the fortunes of the

investing public may be at stake. Both a complainant that has

suffered adverse job consequences and the public therefore

have a strong interest in Congress aiding whistleblower plaintiffs, even if in so doing Congress’s scheme may be less efficient than the scheme contemplated by the Secretary.10

IV.

In summary, the plain language of § 1514A(b)(1)(B) unambiguously establishes a Sarbanes-Oxley whistleblower complainant’s right to de novo review in federal district court if

the DOL has not issued a "final decision" and the statutory

180-day period has expired. Here, regardless of whether the

ALJ conducted a hearing or issued findings, it is undisputed

that: (1) the administrative process did not yield a "final decision" for purposes of § 1514A(b)(1)(B) at the time Stone

exercised his right to file suit in district court; and (2) the 180-

day period established by Congress expired prior to Stone filing suit. Therefore, notwithstanding the Secretary’s view on

the soundness of Congress’s decision to create a framework

allowing for duplication of efforts, such framework is precisely what Congress reasonably and unambiguously provided

for in the controlling statute. 

Accordingly, even if the 180-day statutory period is arguably both overly aggressive and not the most efficient use of

administrative and judicial resources, Stone was entitled to de

10Appellees, grafting onto an argument advanced by the Secretary, 69

F.R. at 52111, further argue that a literal interpretation of

§ 1514A(b)(1)(B) would lead to an absurd result, not in this case, but in

cases where the ARB issues a final decision more than 180 days after the

administrative complaint was filed. We decline to reach such fact pattern

not currently before us. 

STONE v. INSTRUMENTATION LABORATORY COMPANY 19
novo review in the court below. In the absence of any guidance from this court, or any other circuit court, as well as in

the face of the Secretary’s comments inviting district courts

to remand cases to the ARB, the district court understandably

erred in applying preclusion principles. As stated above, we

reject the Secretary’s interpretation and invitation to district

courts to apply preclusion principles because Congress

expressly provided for de novo non-deferential review in district court. A literal interpretation of the statute’s plain language does not lead to an absurd result since Congress

unquestionably has the right to create a complainant-friendly

statutory scheme that affords no deference to non-final agency

findings. 

For the reasons stated herein, we reverse the district court’s

order granting Appellees’ motion to dismiss, vacate the entry

of final judgment, and remand to the district court for further

proceedings consistent with this opinion. 

VACATED AND REMANDED

20 STONE v. INSTRUMENTATION LABORATORY COMPANY