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Greetings, Court Fans!

Most Court-watchers’ attention last Thursday was devoted to the oral argument in Trump v. Anderson (No. 23-719), where candidate Trump seeks to reverse the Colorado Supreme Court’s recent decision barring him from that state’s primary ballot on the ground that he “engaged in insurrection” in and around January 6, 2021. So, they can be forgiven for missing the Court’s first two real decisions of the term, issued that same day. (Acheson Hotels v. Laufer, which was dismissed on mootness grounds, doesn’t really count.) But while the delay in getting to the first merits decisions is unusual, the decisions themselves are not: As is frequently the case, the Court’s first opinions of the term were unanimous and relatively straightforward questions of statutory interpretation:

• In Murray v. UBS Securities, Inc. (No. 22-660), the Court held that whistleblowers suing under the Sarbanes-Oxley Act do not need to prove that their employer acted with “retaliatory intent”;
• And in Department of Agriculture Rural Development Rural Housing Service v. Kirtz (No. 22-846), the Court held that the federal government is a “person” for purposes of the Fair Credit Reporting Act, so plaintiffs can sue federal agencies for violating the Act.

Hopefully, those two cases are enough to hold you over while you wait for Trump, which we expect (given the urgent nature of that case) will be decided in short order. But if you’re still on pins and needles, we’ll tell you now that last week’s argument did nothing to disturb our view that Trump is going to win. But to find out for sure, you’ll have to wait just a bit longer.

We’ll start today with Murray. The Sarbanes-Oxley Act of 2002 prohibits employers from taking adverse-employment actions against an employee “because of” the employee’s protected whistleblowing activity. When an employee alleges an employer violated this provision, the employee first must show that their protected activity “was a contributing factor” in the employer’s action. The burden then shifts to the employer to show it would have taken the same action against the employee regardless of their whistleblowing. But some courts—namely the Second Circuit—have added another requirement, namely that employees show that the employer acted with “retaliatory intent.” A unanimous Court rejected this addition, limiting whistleblower claims to the statutory burden-shifting framework.

As most of our readers probably know, Congress enacted the Sarbanes-Oxley Act in the wake of Enron and similar public-company scandals. One concern that motivated the Act was evidence that Enron created a “code of silence” by punishing employees who reported fraudulent behavior to relevant authorities. To address that, Congress created 18 U.S.C. § 1514A, which bars publicly traded companies from retaliating against employees who report what they reasonably believe to be fraudulent acts. The Act authorizes employees who are allegedly retaliated against in violation of this provision to sue their employers, and if they do so, the Act directs courts to apply the “legal burdens of proof” established in other (pre-existing) whistleblower-protection statutes. Those statutes follow the burden-shifting framework discussed above, requiring the employee first to show that their protected activity was a “contributing factor” in the employer’s actions, and then shifting the burden to the employer to show it would have made the same decision regardless of the employee’s actions. Importantly, Congress adopted this “contributing factor” formulation to relieve whistleblowers of the “excessively heavy burden” under pre-existing law of showing that their whistleblowing was the “motivating” or “predominant” factor in the employer’s adverse employment decision.

In 2011, Trevor Murray was a researcher in UBS’s commercial mortgage-backed securities business. He believed that two leaders of the CMBS desk were improperly pressuring him to skew certain public-facing reports to be more supportive of their business strategies. Soon after he informed his direct supervisor of these concerns, Murry was fired from the company. He sued in federal court, and a jury ultimately awarded him nearly $3 million in damages, attorney’s fees, and costs. On appeal, the Second Circuit vacated the verdict, concluding that the District Court’s instructions as to the contributing-factor element of Murray’s claim were erroneous because they did not require the jury to decide whether UBS had acted with “retaliatory intent” in firing Murray. That decision conflicted with decisions from the Fifth and Ninth Circuits, which had rejected any retaliatory-intent requirement.

Writing for a unanimous Court, Justice Sotomayor quickly dispensed with the Second Circuit’s approach. She began by clarifying the issue: While the Second Circuit had not explained exactly what it meant by “retaliatory intent,” the Court understood its decision as requiring Murray to demonstrate some sort of “animus” or “hostility” toward him. Nothing in the text of Sarbanes-Oxley (or any other whistleblower statute) imposed such a requirement explicitly. But both the Second Circuit and UBS thought it could be implied from Section 1514A’s prohibition on “discriminating” against an employee, which they thought required some sort of ill will. The Court rejected that gloss on the statutory language: As its decisions from other contexts show, to “discriminate” against someone means merely to treat that person differently; it does not require hostility or animosity toward the differently-treated person. And while the statute does require an employee to show that their adverse treatment was “because of” whistleblowing activity, Sarbanes-Oxley’s burden-shifting framework establishes exactly how courts are to make that determination: First the employee must show their whistleblowing was a “contributing factor” in the employer’s decision (which no one disputed Murray had done), and then the burden shifts to the employer to show it would have done the same thing regardless (which the jury found UBS failed to do). Neither of those elements requires courts (or juries) to decide whether the defendant employer acted out of animus toward the employee, so grafting that requirement onto the statute would eliminate liability in cases where Congress intended it.

Justice Alito, joined by Justice Barrett, wrote a brief concurrence. He agreed in full with the majority that nothing in Sarbanes-Oxley requires a plaintiff to show retaliatory intent in the sense of “prejudice” or “ill will.” But the statute does require plaintiffs to prove that the defendant acted “intentionally,” in the sense that the employer intentionally treated the plaintiff worse off because of protected conduct. Sarbanes-Oxley addresses that with its “contributing-factor” element, which requires a plaintiff to show that their whistleblowing helped bring about the employer’s adverse action. Alito noted that the Court’s rejection of a separate discriminatory-intent requirement should not be read as imposing liability without the showing of intentional discrimination inherent in the statute’s explicit elements.

In our second case of the day, Kirtz, the Court grappled with another statutory-interpretation question, this time whether a federal-government agency is a “person” subject to suit under the Fair Credit Reporting Act (“FCRA”). A unanimous Court concluded that it was, thus giving the green light to suits against federal agencies for violating the FCRA.

Respondent Reginald Kirtz obtained a loan from the Rural Housing Service, a division of the USDA charged with issuing loans to promote the development of housing in rural areas. Although Kirtz paid off the loan in full in 2018, the USDA repeatedly told TransUnion that his account was delinquent. Kirtz notified TransUnion of the mistake, and it in turn notified the USDA. But the USDA never corrected the error or even took any steps to investigate the matter. Kirtz then sued the USDA under the FCRA, alleging that he was entitled to money damages for the agency’s willful or negligent furnishing of inaccurate credit information. But the District Court dismissed his suit, holding that the federal government enjoyed sovereign immunity in suits for money damages and that Congress had not waived that immunity in the FCRA. The Third Circuit then reversed, holding that the statutory definition of “person” in the FCRA included “any” government agency. And because that same definition was used in the FCRA’s sections that authorized suits for money damages, the Third Circuit concluded that Congress had unambiguously waived the federal government’s sovereign immunity in such suits.

A unanimous Court affirmed, holding that the FCRA unmistakably waived sovereign immunity. Writing for the Court, Justice Gorsuch began with the rule that the federal government’s sovereign immunity can be waived only through an explicit waiver or through the creation of a cause of action that explicitly authorized suit against the government. This case fell into the latter category: Because the FCRA authorized suits for money damages against “person[s]” who provide information to credit reporting agencies, and because the FCRA’s definition of “person” included “any” government agency, the Court concluded that Congress had clearly intended to waive the federal government’s sovereign immunity.

Gorsuch then quickly batted aside several responses from the federal government. First, the government argued that an explicit waiver of sovereign immunity is necessary even for statutes that explicitly authorize suit against the government. But Gorsuch dismissed this assertion, reiterating that the creation of a cause of action against the government waives sovereign immunity even without a separate (and explicit) immunity waiver. Second, Gorsuch rejected the government’s reliance on sovereign-immunity decisions from the 1970s and 1980s, as those decisions were issued when the “Court’s approach to sovereign immunity looked considerably different,” making them of little relevance under the Court’s current approach. And finally, Gorsuch found no merit to the government’s reliance on two canons of interpretation (the canon of constitutional avoidance and against absurdity), reasoning that those canons provided no reason to override the explicit and unambiguous words of the statute.