Martensen v. Chicago Stock Exchange
MEMORANDUM Opinion and Order. Signed by the Honorable Milton I. Shadur on 6/7/2017:Mailed notice(clw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
CHICAGO STOCK EXCHANGE,
Case No. 17 C 1494
MEMORANDUM OPINION AND ORDER
In response to a complaint brought against it by professed "whistleblower" Jeffrey
Martensen ("Martensen") under the claimed auspices of the anti-retaliation provisions of the
Dodd-Frank Act ("Act"), 1 defendant Chicago Stock Exchange ("Exchange") has filed a
Fed. R. Civ. P. ("Rule") 12(b)(6) motion to dismiss because of Martensen's asserted failure to
state a claim under the provisions of the Act, which apply solely to action taken by a
"whistleblower" as expressly defined in Act § 6(a)(6) (emphasis added):
The term "whistleblower" means 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.
This sua sponte memorandum opinion and order addresses that motion because it relies on that
express definition -- reliance that cannot be countered by any legally impermissible reading of
Congress' unambiguous language out of the Act.
Citations to that portion of the Act, found at 15 U.S.C. § 78u-6, will take the form
"Act § 6 --," omitting the prefatory "15 U.S.C. § 78u."
Exchange's motion is unique in Rule 12(b)(6) jurisprudence in that there is no need to
await Martensen's response before this Court rules on the matter. That oddity obviously calls for
an explanation at the outset.
What is at issue in this case is the purely legal question as to whether Martensen is or is
not a "whistleblower" within the Act's above-quoted definition of that term, a subject on which
our own Court of Appeals has had no occasion to rule, 2 while three other Courts of Appeals have
treated the subject in depth and have reached conflicting conclusions. In that respect Act
§ 6(h)(1)(A) provides a right of action to a "whistleblower" in the following language relevant to
this case (emphasis again added):
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 . . . .
Here is the story as to those three precedential Court of Appeals opinions:
Asadi has concluded that an employee in circumstances identical to those
presented by Martensen, having complained up the employer's food chain
Two District Court judges within this circuit have ruled on the issue in legally
comparable situations, and each has answered that question "no" -- see Verfuerth v. Orion, 65
F. Supp. 3d 640 (E.D. Wis. 2014) and Lamb v. Rockwell, 15 C 1415, 2016 WL 4273210 (E.D.
Wis. 2016), each coming to the same conclusion as that arrived at by the Court of Appeals for
the Fifth Circuit in the later-discussed Asadi v. G.E. Energy, 720 F.3d 620 (5th Cir. 2013). But
we are regularly and properly reminded by our Court of Appeals that District Court opinions are
non-precedential, so that this opinion does not place either Verfuerth or Lamb on the scales of
justice in arriving at this Court's independent determination.
(in Martensen's case, a requirement of the employer's internal regulations)
but not to the SEC, as the Dodd-Frank statute requires for "whistleblower"
status, is not a "whistleblower" subject to actions under Section
Both Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015) and
Somers v. Digital Realty Trust, Inc., 850 F.3d 1045 (9th Cir. 2017) have
held that the unambiguous statutory definition in Section 6(a)(6) is
somehow overridden by other considerations, including statements
emanating from the SEC itself, so that "whistleblower" is transmuted from
a term of art specifically defined by Congress to a generic noun of broader
This Court of course intends no disrespect to the four judges who have reached that
last-described result. 3 But for more than three decades this Court has consistently adhered to the
principle that it stated in these terms in State of Ill. by the Ill. Dep't of Pub. Aid v. Heckler, 616
F. Supp. 620, 624 (N.D. Ill. 1985), aff'd 808 F.2d 571 (7th Cir. 1986), addressing the meaning of
a statutorily defined term (in that instance part of the Social Security Act):
Any analysis must of course begin with -- and focus on -- the language of [the
In another oddity, each of those results was reached in a 2-to-1 decision over a dissent
by the third member of the appellate panel. Again legal analysis rather than nose-counting must
carry the day, but the fact remains that a majority -- 5 out of 9 -- of the Circuit Judges who have
been called upon to rule on the issue have been in favor of adhering to the unambiguous
congressional directive rather than rationalizing a departure from that definition.
As Heckler, id. at 624 n.8 went on to say, in language that could well have been written in this
case to explain why analysis calls for the express statutory definition to prevail over the revision
as to the revisionist approach taken in Berman and Somers:
With such unambiguous statutory language, conventional wisdom would
foreclose any recourse at all to legislative history (or administrative regulations,
for that matter). But the "modern" school of statutory interpretation (sometimes
jocularly phrased as "look at the legislative history, and if it is ambiguous then
look at the statutory language") has gained a disturbing amount of currency in the
highest circles. Justice Stevens has been especially critical of that tendency by the
Supreme Court. See, e.g., Kosak v. United States, 465 U.S. 848 (Stevens, J.,
As stated earlier, it is of course true that District Court decisions have no precedential
value, so this Court's consistent adherence to that principle (see, e.g., EEOC v. Synchro-Start
Prod., Inc., 29 F. Supp. 2d 911, 914 (N.D. Ill. 1999) and FDIC v. Mudd, 704 F. Supp. 2d 822,
825 (N.D. Ill. 2010)) concededly adds nothing to the "weight of authority." But in true weightof-authority terms, the Supreme Court's teaching in the seminal decision in Chevron , U.S.A. v.
Natural Resources Defense Council, 467 U.S. 837, 842-43 (1984) provides the definitive answer:
First, always, is the question 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;
for the court, as well as the agency, must give effect to the unambiguously
expressed intent of Congress.
Indeed, only two days ago in Advocate Health Care Network v. Stapleton, No. 16-74, 2017 WL
2407476 (S. Ct. June 5, 2017), a unanimous Supreme Court reconfirmed its adherence to that
same principle of reading and applying a congressionally enacted statute literally, giving effect to
every word in the statute, with the Court reversing the opinions of three Courts of Appeals
(including our own) that had reached opposite results.
For the reasons stated here and in the other cases that have reached the same destination,
this Court rejects the notion that Congress did not mean what it said (or that it arguably might
have said if it had given further thought to the matter). This Court accordingly holds (1) that the
congressionally enacted definition of "whistleblower" in the Dodd-Frank Act's retaliatory
provision is unambiguous and (2) that no administrative regulation can turn the jurisprudential
world upside down to override that unambiguous provision. Exchange's motion to dismiss
Martensen's Complaint's federal question under the Dodd-Frank Act is therefore granted, so that
the state-law-based provisions of the Complaint have no federal underpinning to support them
and are therefore dismissed without prejudice. In sum, both the Complaint and this action are
Milton I. Shadur
Senior United States District Judge
Date: June 7, 2017
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