Flynn v. United States Securities & Exchange Commission

877 F.3d 200
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 7, 2017
Docket16-2122
StatusPublished
Cited by10 cases

This text of 877 F.3d 200 (Flynn v. United States Securities & Exchange Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flynn v. United States Securities & Exchange Commission, 877 F.3d 200 (4th Cir. 2017).

Opinion

Petition denied in part, granted in part, and remanded for further proceedings by published opinion. Judge Wynn wrote the opinion, in which Judge Motz and Judge Duncan joined.

WYNN, Circuit Judge:

In May 2013, Rory Flynn was fired from his position at the Securities and Exchange Commission (“SEC,” or the “Commission”). Flynn claims that his supervisor terminated him in reprisal for raising concerns about his section’s alleged chronic inefficiency. Seeking redress under a provision of the Whistleblower Protection Enhancement Act, 5 U.S.C. § 2302(b)(8), Flynn filed suit. An Administrative Judge determined that Flynn had not made any protected disclosures and was thus not entitled to relief. The Merit Systems Protection Board affirmed, and now Flynn petitions this Court for review.

We deny the petition in part, grant in part, and remand for further consideration.

I.

In August 2012, Rory Flynn began work as an Associate General Counsel at the SEC. Flynn had previously spent twelve years in the SEC’s Division of Enforcement and then another thirteen years with the Financial Industry Regulatory Authority (and its predecessor). In his most recent position with the Commission, Flynn helmed the Office of General Counsel’s Adjudication section. Known simply as “Adjudication,” the section primarily assists the Commission in deciding appeals from administrative law judges, self-regulatory organizations, and the Public Company Accounting Oversight Board.

After starting with Adjudication, Flynn became alarmed by what he viewed as an unacceptable backlog in unresolved cases based on his reading of two provisions in the SEC Rules of Practice: Rule 900(a) and Rule 900(b). See Informal Procedures and Supplementary Information Concerning Adjudicatory Proceedings, 17 C.F.R. § 201.900 (2006). 1

Rule 900(a) provides that, “to the extent possible ... [ojrdinarily, a decision by the Commission with respect to an appeal ... should be issued within seven months from the date the petition' for review ... is filed.” 17 C.F.R. § 201.900(a). That said, if “the Commission determines that the matter presents unusual complicating circumstances/ ... a decision ... may be issued within 11 months.” Id. “[Wjhen the Commission 'determines that ■ extraordinary facts and circumstances ... so require,” it has “discretion” to take even further time to resolve the appeal. Id. Flynn believed that Adjudication was consistently violating Rule 900(a) by not resolving appeals within the prescribed timelines or obtaining Commission approval for extensions. According to Flynn, when he began working in Adjudication, approximately one-half of the section’s docket did not comply with the guidance set out in Rule 900(a).

Flynn also believed that Adjudication regularly violated Rule 900(b). Under that rule, .if an appeal is not. completed within 30 days of the timelines in Rule 900(a), “the General Counsel shall specifically apprise the Commission of that fact” with a report that “shall describe the procedural posture of the case, project an estimated date for conclusion of the proceeding, and provide such other information as is necessary to enable the Commission to determine whether additional steps are necessary to reach a fair and timely resolution of the matter.” 17 C.F.R. § 201.900(b). Although Adjudication filed Rule 900(b) reports, Flynn believed the reports failed to provide' all information required by the rule.

Regarding both rules, Flynn believed the Commission was violating mandatory directives. Thus, beginning in October 2012, Flynn informed numerous individuals of his concerns regarding Rule 900, compliance. These efforts included a January 2013 meeting with then-SEC Chairwoman Elisse Walter. Flynn also attempted to fix the purported violations by having Adjudication institute a number of remedies, such as hiring additional staff and establishing a triage system, through which Adjudication resolved simple cases first. According to Flynn, these measures improved efficiency.

Continuing these efforts, in May 2013, Flynn scheduled a meeting with the new SEC Chairwoman, Mary Jo White—a meeting at which Flynn intended to discuss his ongoing concerns about Rule 900 violations. Four days beforehand, however, White’s office canceled the meeting, and days later, Flynn’s supervisor, Michael Conley, fired Flynn. Conley’s stated reasons for firing Flynn included “poor work performance,” “failure] to produce, high quality work product on a timely basis,” “failure -to prioritize assignments,” and “inability to work cooperatively with senior level managers.” J.A. 303

Flynn then initiated a lengthy administrative process ■ to adjudicate his termination under the Civil Service Reform Act of 1978, 5 U.S.C. § 1101 et seq., which sets forth the “framework for evaluating personnel actions taken against federal employees.” Kloeckner v. Solis, 568 U.S. 41, 44, 133 S.Ct. 596, 184 L.Ed.2d 433 (2012). Previously, the United States Civil Service Commission managed the personnel of the Executive branch and adjudicated grievances filed by those employees. See Robert G. Vaughn, The Opinions of the Merit Systems Protection Board: A Study in Administrative Adjudication, 34 Admin. L. Rev. 25, 26 (1982). Amidst criticism . of those conflicting roles, Congress sought to divide the managerial and adjudicatory-functions of the Civil Service Commission. See id. at 26-29. Under the Civil Service Reform Act, the Office of Personnel Management inherited the Civil Service Commission’s managerial duties, and the Merit Systems Protection Board became a separate: adjudicatory body. See id; see also 5 U.S.C. §§ 1101-05 (establishing the Office of Personnel Management); 5 U.S.C §§ 1201-06 (establishing the Merit Systems Protection Board). The newly established Office of Special Counsel also took on some oversight responsibilities, especially investigating governmental violations of law. See 5 U.S.C §§ 1211-19.

Pursuant to the procedure set forth in current law, Flynn first sought “corrective action from the [Office of] Special Counsel.” 5 C.F.R. § 1209.2(b)(1) (2013). In his complaint to the Office of Special Counsel, Flynn claimed the SEC engaged in a prohibited personnel action, namely firing him for bringing attention to Adjudication’s longstanding violations' of Rule 900. The Office of Special Counsel did not pursue Flynn’s claims, thereby enabling him to file an independent right of action with the three-member Merit Systems Protection Board (“the Board”). See 5 U.S.C.

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Bluebook (online)
877 F.3d 200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flynn-v-united-states-securities-exchange-commission-ca4-2017.