Court Opinion

ID: 2968223
Source: CourtListenerOpinion
Date Created: 2015-09-22 04:34:26.654747+00
Date Added: 2024-06-11T13:14:10.266763
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
               FOR THE FOURTH CIRCUIT

F. BARRON STONE,                          
                   Plaintiff-Appellant,
                v.
                                                 No. 04-2562
DUKE ENERGY CORPORATION; DUKE
ENERGY BUSINESS SERVICES, LLC,
             Defendants-Appellees.
                                          
           Appeal from the United States District Court
     for the Western District of North Carolina, at Charlotte.
             Graham C. Mullen, Chief District Judge.
                           (CA-04-277)

                     Argued: September 21, 2005

                     Decided: December 15, 2005

 Before WIDENER, NIEMEYER, and MICHAEL, Circuit Judges.

Vacated and remanded by published opinion. Judge Niemeyer wrote
the opinion, in which Judge Widener and Judge Michael joined.

                              COUNSEL

Gerard Alford Bos, WILSON & BOS, Charlotte, North Carolina, for
Appellant. Margaret Hutchins Campbell, OGLETREE, DEAKINS,
NASH, SMOAK & STEWART, P.C., Atlanta, Georgia, for Appel-
lees.
2                   STONE v. DUKE ENERGY CORP.
                                OPINION

NIEMEYER, Circuit Judge:

   F. Barron Stone commenced this action under the Sarbanes-Oxley
Act of 2002, alleging that his employer, Duke Energy Corporation,
retaliated against him for filing complaints of potential corporate
fraud with the Securities and Exchange Commission and state utilities
commissions, in violation of the whistle-blower protection provisions
of Section 806 of the Act, 18 U.S.C. § 1514A. For jurisdiction, Stone
relied on the fact that he had filed an administrative complaint with
the Department of Labor and the Secretary of Labor had not issued
a final decision within 180 days. See 18 U.S.C. § 1514A(b)(1)(B).

   By order dated December 1, 2004, the district court dismissed
Stone’s complaint for lack of subject matter jurisdiction. The court
apparently concluded that Stone was required to appeal from the
agency directly to the Court of Appeals because the administrative
law judge had issued what the court believed was a "final decision"
disposing of Stone’s administrative complaint.

   Because the district court misconstrued its jurisdiction, we vacate
its December 1, 2004 order and remand for further proceedings.

                            *      *      *

   Stone filed an administrative complaint with the Department of
Labor on October 30, 2002. After the Secretary of Labor issued find-
ings and a preliminary order stating that "it is reasonable to believe
that [Duke Energy] did not violate" the Sarbanes-Oxley Act, Stone
filed timely objections with the Office of Administrative Law Judges.
See 49 U.S.C. § 42121(b)(2) (authorizing the filing of such objections
within 30 days of the preliminary order). While Stone’s administra-
tive complaint was pending before an administrative law judge
("ALJ"), Stone filed a complaint on the same claims in the district
court on May 21, 2003. This was more than 180 days after he filed
his administrative complaint with the Department of Labor, and 18
U.S.C. § 1514A(b)(1)(B) permits a person alleging retaliation to bring
an action in federal court if the Secretary of Labor has not issued a
                      STONE v. DUKE ENERGY CORP.                         3
"final decision" within 180 days of the filing of the administrative
complaint and if the delay is not attributable to "the bad faith" of the
claimant. While the action in the district court was pending, the ALJ
entered an order in the administrative proceedings on June 19, 2003,
stating:

     Accordingly, the United States District Court . . . has
     assumed jurisdiction and this case is no longer before the
     Office of Administrative Law Judges.

Eventually, on February 11, 2004, the district court dismissed Stone’s
complaint without prejudice because the complaint violated pleading
requirements of Federal Rules of Civil Procedure 8 and 10.

   Stone filed a "Restated Complaint" on June 7, 2004, although he
docketed his "Restated Complaint" as a separate action. On Duke
Energy’s motion, the district court again dismissed his complaint, but
this time on the ground that the court did not have subject matter
jurisdiction. The district court believed that the ALJ’s June 19, 2003
order constituted a final decision of the agency that was appealable
only to the Court of Appeals. See 49 U.S.C. § 42121(b)(4) (providing
for appeals of "final orders" to Courts of Appeals). Stone appealed
from this dismissal.

   In dismissing Stone’s "Restated Complaint," the district court
failed to recognize that the ALJ’s June 19 order was not an appealable
final decision on Stone’s administrative complaint. First, the ALJ did
not decide the merits of Stone’s complaint. Rather, he only acknowl-
edged that he no longer had jurisdiction because the district court
assumed jurisdiction when a complaint was filed there. Second, and
more important, even if the ALJ’s June 19, 2003 order could be taken
as a "final decision," it was a nullity because it was entered after juris-
diction had vested in the district court. Section 1514A(b)(1)(B) con-
fers jurisdiction on a district court when a qualifying complainant
files his complaint there. No one has suggested that the jurisdictional
prerequisites of § 1514A(b)(1)(B) were not met in this case. Accord-
ingly, when Stone filed his first complaint in federal court on May 21,
2003, jurisdiction became lodged in the district court, depriving the
ALJ of jurisdiction to enter his order on June 19, 2003. Indeed, the
4                     STONE v. DUKE ENERGY CORP.
ALJ recognized this in his June 19 order, for he stated simply that the
administrative complaint was no longer before him.

   Duke Energy contends that the district court lost jurisdiction when
it dismissed Stone’s first judicial complaint on February 11, 2004, for
defects in pleading and because Stone filed a new complaint, rather
than amending his existing one. While it is curious that Stone did not
file his "Restated Complaint" in the then-pending case, but rather
filed it as a new action, this fact is jurisdictionally irrelevant. The dis-
trict court dismissed the initial complaint without prejudice to Stone,
and Stone’s second complaint was grounded on the same jurisdic-
tional basis as was his first — i.e., that he had an administrative com-
plaint in which a final decision had not been issued within 180 days.
As of June 7, 2004, when Stone filed his "Restated Complaint," the
ALJ still had not entered a "final decision."

  Accordingly, we vacate the district court’s December 1, 2004 order
and remand for further proceedings.

                                          VACATED AND REMANDED