What is Digital Realty Doing?

The Ninth and Second Circuits now agree with Somers on a broad interpretation of Dodd-Frank Act’s whistleblower anti-retaliation protections.  Digital Realty is not satisfied having lost twice on this issue;  The giant data center REIT now wants to be heard by the Supreme Court.

Somers filed his claims against Digital Realty with the United States District Court for the Northern District of California in November 2014.  In January 2015, Digital Realty filed a motion to dismiss a portion of his claims pleading with Judge Chen that Mr. Somers is not a whistleblower because he didn’t report to the SEC, only to management.  Judge Chen denied agreed with Somers and denied Digital’s motion.

Digital then filed an expensive appeal attempting to nullify Judge Chen’s ruling.  Eighteen months later, the Ninth Circuit Court of Appeals agreed with Somers;  Digital was denied again.

Both the district court and the and the 9th Circuit confirmed that employees who report internally, and not to only to the SEC, are whistleblowers, affording them protection from retaliation under Dodd-Frank.

Not satisfied, Digital’s next move was to appeal to the United State Supreme Court.  It’s an odd move for the REIT.  They want the chance to ask the Supreme Court to reverse the current wider coverage for employees to be protected from retaliation.  Digital is demanding that only employees who report to the SEC be protected under Dodd-Frank.  Digital hasn’t offered a good reason for spending a $1 million or more to take a rather unpopular anti-employee approach to the High Court.  Calls to Digital’s investor relations number for an explanation were not returned. 

Digital Realty is now committing an estimated $1+ million in legal fees to have the matter be decided by the Supreme Court.  Some things to consider: 

  • Without a justifiable reason to take this matter to the Supreme Court, Digital may be in direct violation of the Federal Rules of Civil Procedure.  The Rules do not permit vexatious litigation to annoy and harass other parties and waste the resources of the judicial system.
  • This latest delay could add 1.5 years to current litigation.  Digital is responsible for over 1.5 years of delay to date as a result of their failed motion to dismiss and other delays during discovery.
  • Let’s face it, Digital Realty looks bad.  They protect a vast amount of data around the globe; laying roadblocks and discouraging employees from reporting any type of shareholder fraud is counterintuitive. 
  • Should Digital be successful, they will put an estimated +65 million employees working for US-based companies at risk for retaliation thereby deterring reporting resulting in even more corruption.  

Digital owes the Supreme Court, its current and future employees as well as shareholders, an honest explanation as to why they are challenging Somers as far as they can on this.  Digital has taken this litigation far beyond a David v. Goliath story into murky waters defying logic and corporate responsibility.   

*Digital Realty is in a tripartite relationship with Chubb Insurance Group and Chubb’s attorney, Seyfarth Shaw.   Chubb is the policy-holder of Digital’s employment practices liability insurance policy.  When an employee sues, Chubb takes over and defends on behalf of both parties with their appointed law firm.

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©By B. Meyers for Digital Cruelty

 

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