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Jeffrey A. Wiest, et al v. Thomas J. Lynch

November 15, 2011


The opinion of the court was delivered by: Gene E.K. Pratter



Jeffrey Wiest was terminated from his position in Tyco's accounts payable department in April 2010, after spending seven months on medical leave prompted by a company investigation into certain of Mr. Wiest's activities. *fn1 Mr. Wiest and his wife, Laura Wiest (collectively "the Wiests"), contend that the investigation and the treatment he endured as a result of it, were initiated in retaliation against him for having engaged in protected activity under the Whistleblower Protection provisions of the Sarbanes-Oxley Act of 2002 . Specifically, the Wiests allege that he questioned the company's treatment of certain event expenditures that he felt were improper in the wake of the highly publicized corporate fraud scandal involving Tyco International's former CEO, Dennis Kozlowski.

The Wiests filed an administrative complaint with the Occupational Safety and Health Administration ("OSHA") on November 24, 2009, and filed suit in federal court on July 7, 2010 (Docket No. 1) after the Secretary of Labor made no final determination within 180 days. *fn2 The Wiests' Complaint alleges violations of Section 806 of the Sarbanes-Oxley Act of 2002 ("SOX 806") and state law. On September 17, 2010, the Defendants filed a Motion to Dismiss (Docket No. 5), and on July 21, 2011, the Court issued a Memorandum and Order dismissing the Wiests' Complaint in its entirety without prejudice. Wiest, 2011 WL 2923860, at *1.

In dismissing the Complaint, the Court held that the Wiests failed to properly plead that Mr. Wiest engaged in a protected activity, the first element of a prima facie case under SOX 806. *fn3 Id. at *10. The Court explained that the activity Mr. Wiest allegedly engaged in -- communicating his concerns about certain corporate expenses -- was not a "protected activity" under SOX 806, because it did not relate to shareholder fraud or a law covered by SOX 806. Id. The Court set forth the standard for what constitutes a "protected activity" as follows:

SOX protects an employee who has "provided information" to a supervisor regarding conduct that the employee "reasonably believes" violates one of the specific provisions enumerated in § 1514A. For a communication to be protected, it must "definitively and specifically" relate to one of the statutes or rules listed in § 1514A. Platone v. FLYi, Inc., ARB No. 04--154, 2006 WL 3246910, at *8 (Dep't of Labor Sept. 29, 2006), aff'd 548 F.3d 322 (4th Cir. 2008); accord Van Asdale v. Int'l Game Tech., 577 F.3d 989, 996--97 (9th Cir. 2009); Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009); Allen v. Admin.

Review Bd., 514 F.3d 468, 476 (5th Cir. 2008). Although the employee does not have to cite a specific code provision or prove that a violation actually occurred, the employee's communication must express "an objectively reasonable belief there has been shareholder fraud." Day, 555 F.3d at 55. This requires that the employee's communication do more than merely allege that wrongdoing has occurred. Instead, the employee's communication must convey that his concern with any alleged misconduct is linked to "an objectively reasonable belief that the company intentionally misrepresented or omitted certain facts to investors, which were material and which risked loss." Id.; see also Novak v. Kasaks, 216 F.3d 300, 309 (2d Cir. 2000) (noting that "allegations of GAAP violations or accounting irregularities" need to be "coupled with evidence of 'corresponding fraudulent intent' " before stating a securities fraud claim).

Id. at *4. Throughout the Memorandum and Order, relying in part on the standard enunciated by the Administrative Review Board ("ARB") in Platone and by various circuit courts of appeals, the Court ruled that the e-mail communications between Mr. Wiest and his supervisors did not convey his reasonable belief that the complained-of conduct "definitively and specifically" related to the violation of one of the statutes or rules listed in § 1514A. Id. at *5-10. Although the Defendants contested the sufficiency of the Complaint on other grounds, including deficiencies in the Wiests' pleading of the other SOX 806 elements, the Court ended its analysis with and dismissed the Complaint based on the Wiests' failure to demonstrate Mr. Wiest engaged in a protected activity. See Wiest, 2011 WL 2923860 at *4 n.4, *10.

Upon dismissing the Complaint, the Court explicitly granted the Wiests leave to file an Amended Complaint on or before August 20, 2011 (Docket No. 14). However, instead of filing an Amended Complaint, on August 10, 2011, the Wiests filed their self-styled, "Plaintiffs' Motion for Reconsideration Nunc Pro Tunc By the Eastern District Court En Banc of Judge Pratter Memorandum Opinion of July 21, 2011, Or, In the Alternative, Motion to Dismiss Plaintiffs' Complaint with Prejudice and Enter a Final Appealable Order and Judgment" ("Motion for Reconsideration") (Docket Nos. 15, 16) and allowed the deadline to file an Amended Complaint to lapse. In their Motion for Reconsideration, the Wiests bring to the Court's attention for the first time, Sylvester v. Parexel Int'l LLC, ARB No. 07-123, 2011 WL 2165854, at *14-15 (Dep't of Labor May 25, 2011), a May 25, 2011 ARB case overruling Platone.

For the reasons that follow, the Court will deny the Wiests' Motion for Reconsideration. *fn4


Motions for reconsideration are rarely granted due to the Court's "strong interest in the finality of judgments." Schafer v. Decision One Mortg. Corp., No. 08-5653, 2009 WL 1886071, at *3 (E.D. Pa. Jun. 30, 2009) (citing Continental Cas. Co. v. Diversified Indus., Inc., 884 F. Supp. 937, 943 (E.D. Pa. 1995)). To succeed on a motion for reconsideration, the moving party must demonstrate either (1) an intervening change in the controlling law; (2) the availability of new evidence which was not available when the court issued its order; or (3) the need to correct a manifest injustice stemming from a clear error of law or fact. Max's Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999); North River Ins. Co. v. Cigna Reins. Co., 52 F.3d 1194, 1218 (3d Cir. 1995).

A motion for reconsideration should not raise additional arguments that the movant "could have made but neglected to make prior to judgment." Holsworth v. Berg, No. 05--1116, 2005 WL 1799409, at *3 (E.D. Pa. Jul. 26, 2005). Furthermore, reconsideration is not permitted simply to allow a "second bite at the ...

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