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Deykes v. Cooper-Standard Automotive, Inc.

United States District Court, E.D. Michigan, Southern Division

November 22, 2016



          STEPHEN J. MURPHY, III United States District Judge

         Plaintiff Douglas Deykes filed a complaint against his former employer, Defendant Cooper-Standard Automotive, Inc. Deykes alleged that Cooper-Standard terminated him from employment in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Michigan's Elliot-Larsen Civil Rights Act. Cooper-Standard filed a motion to dismiss the Dodd-Frank claim. For the reasons below, the Court will grant the motion and dismiss the case.


         Cooper-Standard hired Douglas Deykes in March 2005. Compl. ¶ 14, ECF No. 1. He served as the Director of Internal Audit, and within a few years, he was promoted to Vice President of Internal Audit and Compliance. Id. ¶¶ 14-15. Among other responsibilities, Deykes ensured that the company complied with governmental financial regulations set forth in the Sarbanes-Oxley Act. Id. ¶ 16.

         Deykes alleges the following: in late April or early May of 2015, a Cooper-Standard employee reported a suspicious corporate financial account to Deykes. Id. ¶¶ 19-20. The account was located in China and named "public relation expenses." Id. ¶ 19. The employee gave Deykes a list of questionable payments made from the account. Id. ¶ 20. Based on the information, Deykes conducted an investigation into the account. Id. ¶ 21. He discovered that Cooper-Standard's quality group in China used the account to provide illegal payoffs to Chinese government officials. Id. Deykes promptly notified the CFO of Cooper-Standard, Matthew Hardt, and the Cooper-Standard general counsel of the payments. Id. ¶ 22. Additionally, Deykes expressed his concern to Hardt and the general counsel that the payments to Chinese officials violated the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd. Id. ¶ 23. On September 3, 2015, Hardt fired Deykes, who then filed this suit for wrongful termination. Id. ¶ 29. Cooper-Standard's motion to dismiss followed.


         Civil Rule 12(b)(6) provides for dismissal of a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The Court may only grant a 12(b)(6) motion to dismiss if the allegations are not "sufficient 'to raise a right to relief above the speculative level, ' and to 'state a claim to relief that is plausible on its face.'" Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). In evaluating the motion, the Court presumes the truth of all well-pled factual assertions. Bishop v. Lucent Techs., 520 F.3d 516, 519 (6th Cir. 2008). Moreover, the Court must draw every reasonable inference in favor of the non-moving party. Dubay v. Wells, 506 F.3d 422, 427 (6th Cir. 2007). But "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If "a cause of action fails as a matter of law, regardless of whether the plaintiff's factual allegations are true or not, " then the Court must grant dismissal. Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1005 (6th Cir. 2009).


         Deykes claims that the anti-retaliation provisions of the Dodd-Frank Act provide him with a cause of action against his former employer. To determine whether the Act imposes liability on Cooper-Standard, the Court begins, "[a]s with any question of statutory interpretation" with the "language of the statute itself." Brilliance Audio, Inc. v. Haights Cross Commc'ns, Inc., 474 F.3d 365, 371 (6th Cir. 2007). "If the language of the statute is clear, then the inquiry is complete, and the court should look no further." Id. "Only if the statute is inescapably ambiguous" will the Court look to other sources, like "interpretations by other courts, legislative history, policy rationales, and the context in which the statute was passed" to discern the legislative meaning. Id. (quotations omitted).

         I. The Statute's Definition of "Whistleblower"

          The Dodd-Frank Act provides a private right of action to a "whistleblower" fired in retaliation for a protected act. The Act provides "only one definition of a whistleblower, and it is found in the definition section." Verble v. Morgan Stanley Smith Barney, LLC, 148 F.Supp.3d 644, 653 (E.D. Tenn. 2015) (holding that an employee who assisted an FBI investigation of a securities violation is not protected by the Dodd-Frank Act). "The term 'whistleblower' means any individual who provides . . . information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission." 15 U.S.C. § 78u-6(a). And when a "statute's definitional section says a word 'means' something, the clear import is that this is the only meaning." Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 226 (1st ed. 2012). Therefore, "[r]eporting to the SEC is the precondition that triggers the anti-retaliation protections of the statute." Verfuerth v. Orion Energy Sys., Inc., 65 F.Supp.3d 640, 645 (E.D. Wis. 2014) (holding that Dodd-Frank anti-retaliation provisions do not apply to an employee who reported internally, but not to the SEC).

         Here, Deykes alleges that he made a report of a suspected violation of the Foreign Corrupt Practices Act. Compl. ¶ 22-23, ECF No. 1. But he alleges that he made the report internally, to Cooper-Standard's CFO and general counsel. Id. Deykes does not allege that he reported anything to the SEC.

         The statutory language unambiguously defines "who is protected" by the Act: the anti-retaliation protections of the Act only apply to a person who reports a suspected securities violation "to the Commission." Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620, 625 (5th Cir. 2013). A person who reports to anyone else - the FBI or a Board of Directors for example - falls outside the Act's definition of whistleblower. Verble, 148 F.Supp.3d at 656; Verfuerth, 65 F.Supp.3d at 646. Thus, Deykes does not meet the statutory definition of a whistleblower because he did not report "to the Commission." He is not protected by the Dodd-Frank Act, and his claim fails as a matter of law.

         II. Deykes's Definition of ...

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