Englehart v. Career Education Corporation et al

Filing 18

ORDER: Defendants Career Education Corporation, Ultrasound Technical Services, Inc., and Sanford Brown Limited, Inc.'s Motion to Dismiss 4 is GRANTED. Count II of the Complaint is dismissed with prejudice. Signed by Judge Virginia M. Hernandez Covington on 5/12/2014. (KNC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
DIANA M. ENGLEHART,
Plaintiff,
v.

Case No. 8:14-cv-444-T-33EAJ

CAREER EDUCATION CORPORATION,
ULTRASOUND TECHNICAL SERVICES,
INC., SANFORD-BROWN LIMITED,
INC.,
Defendants.
________________________________/
ORDER
This

matter

comes

before

the

Court

pursuant

to

Defendants Career Education Corporation, Ultrasound Technical
Services, Inc., and Sanford-Brown Limited, Inc.’s Motion to
Dismiss (Doc # 4), filed on February 28, 2014. On March 14,
2014,

Plaintiff

Diana

M.

Englehart

filed

a

response

in

opposition to the Motion. (Doc. # 5). For the reasons stated
below, the Court grants the Motion, and as a result, Count II
of the Complaint is dismissed with prejudice.
I.

Background
Career Education Corporation (“CEC”) is a “publicly

owned and listed stock corporation, owning and operating
upwards

of

90

on-ground

schools

throughout

the

United

States.” (Doc. # 2 at ¶ 9). “CEC trades under the symbol CECO

on the NASDAQ and is subject to the laws, rules, [and]
regulations

of

the

Securities

Exchange

Act,

and

the

Securities and Exchange Commission” (“SEC”). (Id. at ¶ 10).
Ultrasound

Technical

Services,

Inc.

and

Sanford-Brown

Limited, Inc. are wholly owned subsidiaries of CEC. (Id. at
¶¶ 5-6).
Beginning in January of 2008, Englehart was employed by
Defendants as the Director of Career Services of Sanford Brown
Institute in Tampa, Florida. (Id. at ¶¶ 11-12). In this
position, Englehart was responsible for preparing the Career
Services department’s yearly budget, which included forecasts
for future expenses, revenues, placements, and enrollment.
(Id. at ¶¶ 17-18). The budget and forecasts were communicated
to shareholders and the public. (Id. at ¶ 19).
According

to

the

Complaint,

on

several

occasions,

Englehart voiced her concerns regarding proposed budgets and
forecasts prepared by Sanford Brown Institute as she believed
they

contained

placements

and

“material
enrollment

misrepresentations
numbers.”

(Id.

related
at

¶

to
20).

Specifically, in November of 2010, Englehart met with Jason
Schnack – Vice President of Operations at Sanford Brown
Institute – regarding her concerns with the “unrealistic
percentage placement for students.” (Id. at ¶ 21). Englehart

2

contends that Schnack replied “You must make it happen” and
“The [s]hareholders need these numbers,” and inferred that
“if such numbers were not reached [Englehart] would be fired.”
(Id. at ¶ 22). Englehart submits that “Defendants wanted
[Englehart’s]

department

to

exceed

numbers

required

for

accreditation and [Englehart’s] merit increases and bonuses
were tied to placement percentages.” (Id. at ¶ 23).
According to Englehart,
The publishing of forecasts and budget for 2011
contain[ed] false and misleading information,
overstated numbers [in] violation of The Securities
Exchange Act of 1934, and the antifraud provisions
of Section 10(b) of the Securities Exchange Act of
1934 (“Exchange Act”); and Rule 10b-5, the
reporting provisions of Section 13(a) of the
Exchange Act; and Rules 12b-20 and 13a-13
thereunder, the books and records provisions of
Section 13b-5 of the Exchange Act and Rule 13b2-1
under the Exchange Act, and the lying to auditors
provision of Rule 13b2-2 under the Exchange Act.
(Id. at ¶ 24).
At

all

relevant

times,

Englehart

was

under

the

supervision of Steve Dumerve – former President of Sanford
Brown Institute, Tampa, Florida. (Id. at ¶ 16). In his
position as President, Dumerve was responsible for preparing
the yearly budget for the school, which included Englehart’s
department’s budget. (Id. at ¶ 26). The Complaint provides

3

that Dumerve “consistently communicated his objections to CEC
corporate

staff

about

the

school’s

proposed

budgeted

performance numbers and forecasts.” (Id. at ¶ 27). Englehart
was present during meetings with CEC corporate staff, in which
Dumerve

asserted

these

objections

stating

the

forecasts

“contained many material misrepresentations, including but
not

limited

understated

to

unrealistic

expenses,

leads

overstated

for

student

new

students,

enrollment

and

revenues and placements.” (Id. at ¶ 28).
According to the Complaint, an investigation by the New
York Attorney General’s Office ensued into Sanford Brown
Institute’s practices. (Id. at ¶ 29). Namely, the New York
Attorney General was investigating whether CEC violated “New
York

and

other

state

consumer

protection,

securities,

finance, and other laws.” (Id. at ¶ 30). Furthermore, class
action lawsuits were pursued against CEC due to statements
Defendants made during November of 2010, and August of 2011,
relating to its business and operations that “were materially
false and misleading at the time they were made.” (Id. at ¶¶
31-32).
Englehart submits that “CEC terminated Dumerve from his
position

to

shield

Attorney

[G]eneral

[O]ffices

and

investigators from being able to speak to him and in order to

4

silence him.” (Id. at ¶ 33). Soon after, Englehart was placed
on paid leave of absence. (Id. at ¶ 34). Then, in December of
2011, Englehart was terminated from her position allegedly
“due

to

her

objections

to

the

proposed

budget

for

her

department and the concerns voiced over the forecast being
unrealistic.” (Id. at ¶ 35).
Englehart
November

27,

initiated
2013,

this

alleging

action

in

violations

state
of

the

court

on

Florida

Whistleblower Act (Count I) and the Dodd-Frank Reform Act –
15 U.S.C. § 78u-6 (Count II). See (Doc. # 2). Thereafter on
February 21, 2014, Defendants timely removed this action
contending this Court has federal question jurisdiction over
this action. See (Doc. # 1). Defendants filed the present
Motion to Dismiss on February 28, 2014, seeking to dismiss
Count

II

of

the

Complaint

pursuant

to

Fed.

R.

Civ.

P.

12(b)(6). (Doc. # 4). Englehart filed a response in opposition
to the Motion on March 14, 2014. (Doc. # 5). This Court has
reviewed the Motion and the response thereto, and is otherwise
fully advised in the premises.
II. Legal Standard
On a motion to dismiss, this Court accepts as true all
of the factual allegations in the complaint and construes
them in the light most favorable to the plaintiff. Jackson v.

5

Bellsouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
Further, this Court favors the plaintiff with all reasonable
inferences from the allegations in the complaint. Stephens v.
Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990)(“On a motion to dismiss, the facts stated in [the]
complaint and all reasonable inferences therefrom are taken
as true.”). However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal
citations omitted). Further, courts are not “bound to accept
as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
In

accordance

with

Twombly,

Federal

Rule

of

Civil

Procedure 8(a) calls “for sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting
Twombly, 550 U.S. at 570). A plausible claim for relief must
include “factual content [that] allows the court to draw the

6

reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
III. Analysis
In

Count

II

of

the

Complaint,

Englehart

asserts

a

violation of the Dodd-Frank Reform Act:
[Englehart] was retaliated against and terminated
from her employment with Defendants for opposing .
. . Defendants’ unlawful practices.
Defendants’ actions violate the Dodd-Frank Reform
Act, H.R. 4173.
As a direct and proximate result of Defendants’
unlawful, retaliatory termination of [Englehart],
[Englehart] has suffered and will continue to
suffer, loss of earnings, loss of benefits, harm to
her reputation and humiliation, emotional pain and
suffering.
(Doc. # 2 at ¶¶ 52-54). In their Motion, however, Defendants
submit that Count II of Englehart’s Complaint should be
dismissed with prejudice for failure to state a claim upon
which relief can be granted as Englehart “fails to allege an
essential element to establish her whistleblower claim under
the Dodd-Frank Reform Act”: she “fails to allege – and cannot
allege - that she provided any information to the [SEC] in a
manner established by the SEC.” (Doc. # 4 at 1-2).
To support their contention, Defendants cite to Asadi v.
G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013),

7

wherein the Fifth Circuit Court of Appeals held that the DoddFrank Reform Act whistleblower-protection provision under 15
U.S.C. § 78u-6 “creates a private cause of action only for
individuals who provide information relating to a violation
of the securities laws to the SEC.” Id. at 623.
In

Asadi,

terminated

the

for

plaintiff

making

an

claimed

internal

he

was

complaint

unlawfully
regarding

a

possible securities law violation in contravention of the
Dodd-Frank Reform Act. Id. at 621. The plaintiff admitted,
however, that he was not a “whistleblower” as defined in 15
U.S.C.

§

78u-6(a)(6)

because

he

did

not

provide

any

information to the SEC. Id. at 624. Accordingly, the defendant
filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)
arguing

that

as

the

plaintiff

did

not

qualify

as

a

whistleblower, he was not entitled to protection under the
whistleblower-protection provision. Id. at 621.
In

response,

Englehart,

that

the

“the

plaintiff

maintained,

whistleblower-protection

as

does

provision

should be construed to protect individuals who take actions
that fall within [15 U.S.C. § 78u-6(h)(1)(A)(iii)] . . . even
if they do not provide information to the SEC” due to a
“perceived

conflict

between

the

statutory

definition

of

‘whistleblower’ in [15 U.S.C. § 78u-6(a)(6)] and the third

8

category

of

protected

6(h)(1)(A)(iii)],

activity

which

[in

does

not

15

U.S.C.

§

necessarily

78u-

require

disclosure of information to the SEC.” Id. at 624.
Ultimately, the Fifth Circuit found that because the
plaintiff

failed

to

provide

information

relating

to

a

violation of the securities law to the SEC, the plaintiff was
not considered a whistleblower entitled to protection under
the

Dodd-Frank

Reform

Act.

Id.

at

630.

In

making

its

determination, the Fifth Circuit looked to the text of the
relevant statute – 15 U.S.C. § 78u-6 - and found that “Under
Dodd-Frank’s plain language and structure, there is only one
category

of

whistleblowers:

individuals

who

provide

information relating to a securities law violation to the
SEC.” Id. at 625. The Fifth Circuit further found that the
text of 15 U.S.C. § 78u-6 “clearly and unambiguously provides
a single definition of whistleblower,” and therefore, “the
whistleblower-protection

provision[]

does

not

contain

conflicting definitions of the term ‘whistleblower.’” Id. at
627.
In

making

its

determination,

the

Fifth

Circuit

acknowledged but declined to follow several of the district
court

cases

cited

by

Englehart

that

reached

a

contrary

conclusion (i.e. that the whistleblower-protection provision,

9

as enacted, is either conflicting or ambiguous). See Egan v.
TradingScreen, Inc., No. 10 CIV. 8202 LBS, 2011 WL 1672066,
at

*4-5

(S.D.N.Y.

May

4,

2011)(finding

that

the

anti-

retaliation whistleblower protection provisions of the DoddFrank Reform Act require Plaintiff to show that he either
provided information to the SEC or that his disclosures fell
under

the

four

categories

listed

in

15

U.S.C.

§

78u-

6(h)(1)(A)(iii)(emphasis added)); Kramer v. Trans-Lux Corp.,
No. 3:11-cv-1424 SRU, 2012 WL 4444820, at *3-5 (D. Conn. Sept.
25, 2012)(“I do not believe it is unambiguously clear that
the Dodd–Frank Act's retaliation provision only applies to
those individuals who have provided information relating to
a securities violation to the Commission, and have done so in
a manner established by the Commission.”); Nollner v. S.
Baptist Convention, Inc., 852 F. Supp. 2d 986, 993-95 (M.D.
Tenn. 2012)(finding that “the plain terms of anti-retaliation
category (iii), which do not require reporting to the SEC,
appear

to

conflict

with

the

.

.

.

definition

of

‘whistleblower’ at § 78u–6(h)(1)(A)(iii), which defines a
whistleblower as anyone who reports securities violations ‘to
the Commission.’”).
According to Defendants, this Court should follow the
ruling

of

Asadi,

and

find

10

that

Englehart

is

not

a

“whistleblower” deserving of protection under the Dodd-Frank
Reform Act. While Englehart concedes that she did not allege
nor provide any information to the SEC or that “she initiated,
testified, or assisted in any investigation or action of the
SEC based upon her disclosures,” she contends that she still
should

receive

protection

pursuant

to

15

U.S.C

§

78u-

6(h)(1)(A)(iii), which does not require disclosure to the
SEC. (Doc. # 5 at 5). Englehart submits that 15 U.S.C. § 78u6(h)(1)(A)(iii) establishes a narrow exception to 15 U.S.C.
§ 78u-6(a)(6)’s definition of “whistleblower” and protects an
employee

who

makes

any

of

that

provision’s

enumerated

disclosures. (Id. at 6).
According to Englehart, a plain reading of the DoddFrank

Reform

Act

shows

that

15

U.S.C.

§

78u-6(a)(6)’s

definition of whistleblower conflicts with the third prong of
the whistleblower-protection provision – 15 U.S.C. § 78u6(h).

(Id.).

Specifically,

whistleblower-protection

Englehart

provision

posits

explicitly

that

the

prohibits

retaliation against whistleblowers who provide information
and testimony pursuant to 15 U.S.C. § 78u–6(h)(1)(A)(i)-(ii),
and also protects whistleblowers who make disclosures falling
into one of four categories enumerated in 15 U.S.C. § 78u–
6(h)(1)(A)(iii), which do not require that disclosures be

11

made directly to the SEC. (Id.). Therefore, it is Englehart’s
contention that a literal reading of the definition of the
term

“whistleblower”

in

15

U.S.C.

§

78u–6(a)(6)

would

effectively invalidate § 78u–6(h)(1)(A)(iii)'s protection of
whistleblower disclosures.
Englehart requests that this Court follow “numerous
courts” and find that “the contradictory provisions of the
Dodd-Frank Act are best harmonized by reading [15 U.S.C. §
78u-6(h)(1)(A)(iii)’s] protection of certain whistleblower
disclosures not requiring reporting to the SEC as a narrow
exception

to

[15

U.S.C

§

78u-6(a)(6)’s]

definition

of

whistleblower as one who reports to the SEC.” (Id.); see Egan,
2011

WL

1672066,

at

*4-5

(“[A]

literal

reading

of

the

definition of the term ‘whistleblower’ in 15 U.S.C. § 78u–
6(a)(6), requiring reporting to the SEC, would effectively
invalidate

§

78u–6(h)(1)(A)(iii)'s

protection

of

whistleblower disclosures that do not require reporting to
the SEC.”); Ellington v. Giacoumakis, No. CIV.A. 13-11791RGS, 2013 WL 5631046, at *2-3 (D. Mass. Oct. 16, 2013)(same);
Murray v. UBS Sec., LLC, No. 12 CIV. 5914 JMF, 2013 WL
2190084,

at

*3-7

(S.D.N.Y.

May

21,

2013)(“Section

78u–

6(h)(1)(A)(iii) provides a narrow exception to Section 78u–
6(a)(6)'s definition of a whistleblower as one who reports to

12

the SEC, and protects internal disclosures protected by the
Sarbanes–Oxley Act and the 1934 Act.”); Genberg v. Porter,
935 F. Supp. 2d 1094 (D. Colo. Mar. 25, 2013)(finding that 15
U.S.C. § 78u–6(h)(1)(A)(iii) should be interpreted as an
exception to the whistleblower definition found in 15 U.S.C.
§ 78u–6(a)(6)); Kramer, 2012 WL 4444820, at *3-5 (D. Conn.
Sept. 25, 2012)(same); Nollner, 852 F. Supp. 2d at 994, n.9
(M.D. Tenn. 2012)(discussing how Egan and the SEC have found
that

category

(iii)

provides

a

narrow

exception

to

the

definition of a whistleblower as someone who reports only “to
the Commission.”). Englehart submits that these courts have
found that 15 U.S.C. § 78u-6(h)(1)(A)(iii) does not require
a whistleblower to report any information to the SEC as long
as her disclosures fall under one of the four categories of
disclosures enumerated in 15 U.S.C. § 78u-6(h)(1)(A)(iii),
which Englehart contends her disclosures do. (Doc. # 5 at 67).
As

a

result

of

the

“competing,

plausible

interpretations” of 15 U.S.C. § 78u-6 (Id. at 8), Englehart
further requests that this Court find that the statutory
language
ambiguous,

of

the

and

whistleblower-protection

thus,

give

deference

to

provision
the

SEC’s

is
2011

interpretation of the provision and find that Englehart is a

13

whistleblower

under

the

Dodd-Frank

Reform

Act.

(Id.

at

9)(quoting Williams v. Sec’y, United States Dep’t of Homeland
Sec., 741 F.3d 1228 (11th Cir. 2014)(where “the statute is
silent or ambiguous with respect to the specific issue,” the
Court is required to decide whether the rulemaking by the
agency

charged

with

implementing

the

statutory

scheme

regulation “is based on a permissible construction of the
statute.”)).
On August 12, 2011, the SEC – “the agency to whom
Congress delegated authority to administer the whistleblower
provision[] of the Dodd-Frank [Reform Act]” (Doc. # 5 at 10)
- promulgated a final rule regarding the relationship between
15 U.S.C. § 78u-6(h), the whistleblower-protection provision,
and 15 U.S.C. § 78u-6(a)(6), the provision defining the term
“whistleblower:”
b) Prohibition against retaliation:
(1)

For
purposes
of
the
anti-retaliation
protections afforded by Section 21F(h)(1) of
the Exchange Act (15 U.S.C. 78u–6(h)(1)), you
are a whistleblower if:
i.

You possess a reasonable belief that the
information you are providing relates to a
possible securities law violation (or,
where applicable, to a possible violation
of the provisions set forth in 18 U.S.C.
1514A(a)) that has occurred, is ongoing,
or is about to occur, and;

14

ii.

You provide that information in a manner
described in Section 21F(h)(1)(A) of the
Exchange Act (15 U.S.C. 78u–6(h)(1)(A)).

iii.

The anti-retaliation protections apply
whether
or
not
you
satisfy
the
requirements, procedures and conditions to
qualify for an award.

17 C.F.R. § 240.21F–2(b)(1).
“Congress enacted the Dodd-Frank Reform Act in the wake
of the 2008 financial crisis.” Asadi, 720 F.3d at 622. “Most
of these provisions are concerned with a ‘bounty’ program
that

allows

whistleblowers

who

report

violations

of

the

securities laws to the [SEC] to receive portions of money
recovered

by

the

Commission.

contains

a

private

alleging

retaliatory

cause

However,

of

discharge

action
or

the

statute

for

other

also

whistleblowers

discrimination.”

Egan, 2011 WL 1672066, at *2. The Dodd–Frank Reform Act
defines

a

whistleblower

as

follows:

“any

individual

who

provides, or 2 or more individuals acting jointly who provide,
information relating to a violation of the securities laws to
the

Commission,

in

a

manner

established,

by

rule

or

regulation, by the Commission.” See 15 U.S.C. § 78u–6(a)(6).
Subsection

(h),

which

contains

the

whistleblower-

protection provision of the Dodd-Frank Reform Act, protects
whistleblowers from retaliation and provides a private right

15

of

action

against

employers

who

take

retaliatory

action

against the whistleblower:
No employer may discharge, demote, suspend,
threaten, harass, directly or indirectly, or in any
other manner discriminate against, a whistleblower
in the terms and conditions of employment because
of any lawful act done by the whistleblower —
(i)

in providing information to the Commission
in accordance with this section;

(ii)

in initiating, testifying in, or assisting
in any investigation or judicial or
administrative action of the Commission
based upon or related to such information;
or

(iii)

in making disclosures that are required or
protected under the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7201 et seq.), this chapter,
including section 78j-1(m) of this title,
section 1513(e) of Title 18, and any other
law, rule, or regulation subject to the
jurisdiction of the Commission.

15 U.S.C. § 78u-6(h)(1)(A)(i)-(iii). Defendants argue that
the plain text of the statutory definition contained in 15
U.S.C. § 78u-6(a) requires that a whistleblower report to the
SEC in order to invoke the whistleblower-protection provision
of the Act, which Englehart did not do, whereas, Englehart
contends

that

this

interpretation

unreasonable reading of the statute.

16

would

result

in

an

In order for this Court to determine whether Englehart,
who

“voiced

practices

her

to,

objections

among

other

of

[Defendants’]

people,

the

unlawful

Defendants’

Vice

President of Operations” (Doc. # 5 at ¶ 2), is entitled to
protection under 15 U.S.C. § 78u-6(h), even though she did
not provide information to the SEC, this Court must decide
whether the relevant statute is ambiguous. See Asadi, 720
F.3d

at

622

(“When

faced

with

questions

of

statutory

construction, ‘[the Court] must first determine whether the
statutory text is plain and unambiguous’ and, ‘if it is, [the
Court] must apply the statute according to its terms.’”).
“The

plainness

or

ambiguity

of

statutory

language

is

determined by reference to the language itself, the specific
context in which that language is used, and the broader
context of the statute as a whole.” Robinson v. Shell Oil
Co., 519 U.S. 337, 341 (1997). If the statutory text is
unambiguous, the “inquiry begins and ends with the text.”
BedRoc Ltd. v. United States, 541 U.S. 176, 183 (1997).
The first step in statutory interpretation is asking
“whether Congress has directly spoken to the precise question
at issue. If the intent of Congress is clear, that is the end
of the matter.” Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 842-43 (1984). 15 U.S.C. § 78u-

17

6(a) contains a definition of the term “whistleblower,” which
indicates how Congress intends the term to be construed
throughout the statute. With that in mind, Congress drafted
15

U.S.C.

§

78u-6(h)(1)(A),

to

specifically

state:

“No

employer may discharge, demote, suspend, threaten, harass,
directly or indirectly, or in any other manner discriminate
against, a whistleblower in the terms and conditions of
employment

because

of

any

lawful

act

done

by

the

whistleblower.” 15 U.S.C. § 78u-6(h)(1)(A)(emphasis added).
As stated in Asadi,
If Congress had selected the terms “individual” or
“employee,” [a finding of ambiguity] would follow
more naturally because the use of such broader
terms would indicate that Congress intended any
individual or employee – not just those individuals
or employees who qualify as a “whistleblower” – to
be protected from retaliatory actions by their
employers. Congress, however, used the term
“whistleblower” throughout subsection (h) and,
therefore, [the Court] must give that language
effect.
Asadi, 720 F.3d at 626-27. Therefore, the Court finds that
Congress, when drafting 15 U.S.C. § 78u-6, intended the
whistleblower-protection provision to apply explicitly to an
individual who falls within the definition “whistleblower” –
“any individual who provides, or 2 or more individuals acting
jointly who provide, information relating to a violation of

18

the securities laws to the Commission, in a manner established
by rule or regulation, by the Commission.” See 15 U.S.C. §
78u-6(a).
The fact that numerous courts have interpreted the same
statutory language differently does not render the statute
ambiguous,

as

argued

by

Englehart.

Generally,

anti-

retaliation provisions are construed liberally to protect
employees

who

complain

about

or

report

illegal

conduct.

However, in the context of the Dodd-Frank Reform Act, Congress
chose to provide a restrictive definition of “whistleblower.”
It

is

Congress's

prerogative

to

fashion

the

statute

accordingly. See Morante-Navarro v. T&Y Pine Straw, Inc., 350
F.3d 1163, 1167 (11th Cir. 2003)(stating that "Our ultimate
goal is to give effect to congressional intent.").
In making its determination, the Court is mindful that
the third category in 15 U.S.C. § 78u-6(h)(1)(A) does offer
protection from retaliation. However, this protection does
not arise from an individual’s disclosure to the SEC, but
from “other possible required or protected disclosure(s).”
Asadi, 720 F.3d at 627.

The Fifth Circuit in Asadi set forth

an example illustrating how an individual can still receive
protection under 15 U.S.C. § 78u-6(h)(1)(A)(iii), even when
this Court “construe[s] the protection from retaliation under

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Dodd-Frank

to

apply

‘whistleblowers’

only

under

the

to

individuals

statutory

who

qualify

definition

of

term,” which this Court finds informative:
Assume a mid-level manager discovers a securities
law violation. On the day he makes this discovery,
he
immediately
reports
this
securities
law
violation (1) to his company's chief executive
officer (“CEO”) and (2) to the SEC. Unfortunately
for the mid-level manager, the CEO, who is not yet
aware of the disclosure to the SEC, immediately
fires the mid-level manager. The mid-level manager,
clearly a “whistleblower” as defined in Dodd–Frank
because he provided information to the SEC relating
to a securities law violation, would be unable to
prove that he was retaliated against because of the
report to the SEC. Accordingly, the first and
second category of protected activity would not
shield this whistleblower from retaliation. The
third category of protected activity, however,
protects the mid-level manager. In this scenario,
the internal disclosure to the CEO, a person with
supervisory authority over the mid-level manager,
is protected under 18 U.S.C. § 1514A, the antiretaliation provision enacted as part of the
Sarbanes–Oxley Act of 2002 (“the SOX antiretaliation provision”). Accordingly, even though
the CEO was not aware of the report to the SEC at
the time he terminated the mid-level manager, the
mid-level manager can state a claim under the Dodd–
Frank whistleblower-protection provision because
he was a “whistleblower” and suffered retaliation
based on his disclosure to the CEO, which was
protected under SOX.
Id. at 627-28 (emphasis added).

20

as

that

Furthermore, the Court finds that allowing individuals
who do not satisfy the Dodd-Frank Reform Act definition of
“whistleblower” to bring a claim under 15 U.S.C. § 78u-6(h)
would

contradict

the

section’s

title

–

“Protection

of

Whistleblowers.” See Banko v. Apple Inc., No. cv-13-02977 RS,
2013 WL 7394596, at *3 (N.D. Cal. Sept. 27, 2013)(finding
that “allowing individuals who do not satisfy the Dodd-Frank
definition of ‘whistleblower’ to bring a claim under Section
78u-6(h) would contradict the section’s title. Section 78u-6
is

titled

‘whistleblower

protection.’”).

While

“section

headings cannot limit the plain meaning of the text,” this
heading lends support to the conclusion that 15 U.S.C. § 78u6(h)

applies

only

to

those

individuals

who

qualify

as

“whistleblowers” as defined in 15 U.S.C. § 78u-6(a)(6). See
Fla. Dept. of Rev. v. Picadilly Cafeterias, Inc., 554 U.S.
33,

47

(2008)(“To

be

sure,

a

subchapter

heading

cannot

substitute for the operative text of a statute.”).
It is not the role of this Court to second guess the
reasoning or providence of unambiguous statutory language or
expand explicit definitions within a statute to reach a
desired

result.

Therefore,

upon

consideration

of

the

arguments presented by the parties as well as an independent
review of the relevant authority, the Court finds that “the

21

plain language of [15 U.S.C. § 78u-6] limits protection under
the Dodd-Frank whistleblower-protection provision to those
individuals who provide ‘information relating to a violation
of the securities laws’ to the SEC.” Asadi, 720 at 630. As
Englehart concedes she did not provide information to the
SEC, she is not a “whistleblower” under the Dodd-Frank Reform
Act. As a result, Defendants’ Motion to Dismiss is granted
and Count II of the Complaint is dismissed with prejudice.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
(1)

Defendants

Career

Education

Corporation,

Ultrasound

Technical Services, Inc., and Sanford Brown Limited,
Inc.’s Motion to Dismiss (Doc # 4) is GRANTED.
(2)

Count II of the Complaint is dismissed with prejudice.
DONE and ORDERED in Chambers in Tampa, Florida, this

12th day of May, 2014.

Copies: All Counsel of Record

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