Jane Doe v. SEC ( 2022 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 31, 2022 Decided March 25, 2022
No. 21-1097
JANE DOE,
PETITIONER
v.
SECURITIES AND EXCHANGE COMMISSION,
RESPONDENT
Consolidated with 21-1098
On Petitions for Review of an Order
of the Securities and Exchange Commission
Max Maccoby argued the cause and filed the briefs for
petitioner.
Brooke Wagner, Senior Counsel, Securities and Exchange
Commission, argued the cause for respondent. With her on the
brief were Michael A. Conley, Solicitor, and Stephen G. Yoder,
Senior Litigation Counsel.
Before: HENDERSON and TATEL, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
2
Opinion for the Court filed Per CURIAM.
Opinion concurring in the judgment filed by Circuit Judge
HENDERSON.
The petitioners seek review of a Securities and Exchange
Commission (SEC or Commission) order denying their
applications for whistleblower awards resulting from a
successful SEC enforcement action. They contend that the SEC
adopted an unreasonably narrow interpretation of its regulation
governing the whistleblower program and that their
circumstances satisfy the requirements for award eligibility
under a proper reading of the regulation. See 17 C.F.R.
§ 240.21F-4(c).
We disagree. The SEC properly denied their award
applications under its reasonable and longstanding
interpretation of the relevant regulation, which sets forth three
scenarios allowing for the issuance of a whistleblower award—
none of which encompasses the additional scenario proposed
by the petitioners. Their additional arguments are either
forfeited or meritless. Accordingly, we deny the petitions.
I.
In January 2012, the SEC opened an investigation into
alleged violations of the Foreign Corrupt Practices Act of 1977
(FCPA), 15 U.S.C. §§ 78dd-1 et seq., by Novartis AG, a Swiss
pharmaceutical company operating in China. The SEC
investigation concluded in 2016 when it issued an order settling
administrative proceedings against Novartis. It determined that
Novartis had violated the books and records and internal
accounting controls provisions of the FCPA through its
pharmaceutical operations in China. 15 U.S.C.
§ 78m(b)(2)(A), (B). Specifically, the SEC found that, from
2009 to 2013, employees and agents of two Novartis
3
subsidiaries operating in China provided things of value, such
as gifts, travel, entertainment and favors, to Chinese healthcare
providers and officials with the goal of increasing Novartis’s
pharmaceutical sales in the country. The employees and agents
then attempted to conceal the nature of these transactions by
using complicit third parties and improperly recording the
transactions in the books and records of its subsidiaries.
In the order settling the administrative proceedings with
Novartis, the SEC noted that “Novartis instituted an expansive
review of its relationships in China with travel and event
planning vendors” and subsequently took remedial steps “[i]n
connection with the SEC Staff’s investigation and in response
to media reports concerning a competitor.” Joint Appendix
(J.A.) 5–6. The Commission imposed approximately
$25 million in sanctions, ordering Novartis to pay
disgorgement of $21,579,217, prejudgment interest of
$1,470,887 and a civil penalty of $2,000,000, all of which has
been collected in full.
Following the successful enforcement action, the SEC
Office of the Whistleblower published a Notice of Covered
Action regarding the Novartis proceeding and twelve
individuals, including the two petitioners here, filed
applications for an award. The SEC’s Claims Review Staff
(CRS) reviewed the award claims and determined that only two
of the twelve applicants, identified as Claimant 1 and Claimant
2, merited an award because the SEC had opened the
investigation based on information provided by those two
claimants—not based on information provided by any of the
remaining ten. The SEC ordered that Claimant 1 and Claimant
2 receive a joint award. This award has not been challenged.
4
The petition here involves the award claims of Claimant
11 and Claimant 12.1 Each worked for a competitor of Novartis
in China; each had informed the SEC of illegal behavior by her
employer; and each had subsequently informed American
media about that behavior. Media outlets then ran stories about
these allegations. Each claimant argued she was entitled to a
whistleblower award because, in each claimant’s view, the
media reports had caused Novartis to review its practices and
ultimately settle with the SEC.
The CRS issued a preliminary denial of their claims
because the information they provided did not “[lead] to” the
successful enforcement action against Novartis as defined in
Exchange Act Rule 21F-4(c). See 17 C.F.R. § 240.21F-
4(c)(1)–(3). The petitioners provided information related to
alleged misconduct by two of Novartis’s competitors, not
Novartis. Accordingly, the CRS concluded that their
information did not cause the opening or reopening of the
investigation as required by Rule 21F-4(c)(1). See id.§ 240.21F-4(c)(1). They failed to meet the requirements of
Rule 21F-4(c)(2) because the information they provided did not
relate to conduct already under investigation or examination
and did not significantly contribute to the success of the action.
See id. § 240.21F-4(c)(2). The CRS reached this conclusion
because the reported information involved conduct by different
companies and was not used in the Commission’s
investigation. Further, the CRS reasoned that the connection
between Claimant 11’s and Claimant 12’s submissions of this
information to the news media—and its subsequent appearance
in various news articles—and the charges in the Novartis action
was “tenuous at best,” far from demonstrating a significant
1
The CRS also recommended the denial of award claims by
Claimants 3, 4, 5, 6, 7, 8, 9 and 10. These claimants did not contest
the preliminary denial and the SEC accordingly did not evaluate their
claims in its final order.
5
contribution to the success of the action. Erasing any lingering
doubt, the CRS emphasized that “the submissions made by
Claimants 11 and 12 to the Commission had no impact
whatsoever on the Covered Action.” Finally, the petitioners did
not merit an award under Rule 21F-4(c)(3) because, although
their submitted information purportedly sparked an internal
investigation at Novartis, the findings of which became part of
the Covered Action, the petitioners gave the information about
Novartis’s competitors to the news media, not to Novartis as
required by the Rule. See id. § 240.21F-4(c)(3).
The petitioners then challenged the CRS’s preliminary
determination. They argued that the CRS incorrectly concluded
that the three fact patterns described in Rule 21F-4(c) were the
exclusive routes to satisfy the Rule and that it should have
considered “alternative circumstances not specified in” the
Rule in analyzing their claims. Notably, they did not contest
the CRS’s determination that their circumstances failed to meet
the requirements of any of the three fact patterns set forth in
Rule 21F-4(c).
Taking up the petitioners’ challenge, the SEC first noted
that they “appear to concede that they have not satisfied the
three fact patterns set forth in Rule 21F-4(c).” J.A. 293. It then
rejected the argument that there are “alternative circumstances
not specified in Rule 21F-4(c) in which a claimant can satisfy”
the Rule’s “led to” requirement. The Commission reiterated
that it had rejected this argument in a previous order and that it
had interpreted the Rule’s three fact patterns as exclusive since
the Rule’s adoption. See In the Matter of the Claim for Award
in Connection with Redacted, Rel. No. 89551, 2020 WL
4720539, at *4 (Aug. 13, 2020) (citing 76 Fed. Reg. 34300,
34357 (June 13, 2011)). It added that expanding the Rule
beyond the three prescribed fact patterns would introduce
unnecessary speculation and complexity into the analysis and
6
make the Rule too difficult and impracticable to administer.
Accordingly, the petitioners’ award applications were denied.
II.
We have jurisdiction of the petitions under 15 U.S.C.
§ 78u-6(f) and 17 C.F.R. § 240.21F-13 (“A determination of
whether or to whom to make an award may be appealed within
30 days after the Commission issues its final decision to the
United States Court of Appeals for the District of Columbia
Circuit.”). Whistleblower award determinations “shall be in the
discretion of the Commission,” 15 U.S.C. § 78u-6(f), and may
be set aside only if “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law,” 5 U.S.C.
§ 706(2)(A). Courts defer to an agency’s interpretation of its
own regulation if the regulation in question is “genuinely
ambiguous” and if the agency’s reading is reasonable. Kisor v.
Wilkie, 139 S. Ct. 2400, 2415–16 (2019). The interpretation
must be the agency’s “authoritative” or “official position,”
“implicate its substantive expertise” and reflect “fair and
considered judgment” to receive deference. Id. at 2416–18
(citations omitted); Nat’l Lifeline Ass’n v. Fed. Commc’ns
Comm’n, 983 F.3d 498, 507 (D.C. Cir. 2020) (quoting id.).
III.
A.
Under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010)
(codified at 12 U.S.C. §§ 5301 et seq.), the Congress created a
whistleblower award program that provides monetary
incentives to individuals with knowledge of securities
violations to assist the government in identifying and
prosecuting the violations. The Act authorizes the SEC to give
monetary awards to “whistleblowers who voluntarily provided
7
original information to the Commission that led to the
successful enforcement of the covered judicial or
administrative action” and that “results in monetary sanctions
exceeding $1,000,000.” 15 U.S.C. § 78u-6(a)(1), (b)(1)
(emphasis added). The Congress further granted the SEC
“authority to issue such rules and regulations as may be
necessary to implement” the whistleblower program and
discretion to determine “whether, to whom, or in what amount
to make awards.” Id. § 78u-6(f), (j).
Following Dodd-Frank’s enactment and a notice-and-
comment period, the SEC accordingly adopted final rules to
implement the whistleblower program. Securities
Whistleblower Incentives and Protections, 76 Fed. Reg. 34,300(June 13, 2011) (Adopting Release). The promulgated rules—
in particular, Rule 21F-4(c)—set forth the circumstances under
which information provided by whistleblowers will be
considered to have “led to” the successful enforcement of a
covered action, as the statute requires for award eligibility. See
15 U.S.C. § 78u-6(b)(1) (“In any covered judicial or
administrative action, or related action, the Commission under
regulations prescribed by the Commission . . . shall pay an
award or awards to 1 or more whistleblowers who voluntarily
provided original information to the Commission that led to the
successful enforcement of the covered judicial or
administrative action, or related action.”); 17 C.F.R.
§ 240.21F-4(c) (defining “[i]nformation that leads to
successful enforcement”).
Rule 21F-4(c) identifies “any of the following
circumstances” as scenarios in which whistleblower
information will be deemed to have “led to” a successful
enforcement action: (1) the whistleblower’s “original
information” caused the SEC “to commence an examination,
open an investigation, [or] reopen an investigation” and the
8
successful action was “based in whole or in part” on that
information; (2) the “original information” involves “conduct
that was already under examination or investigation by” the
SEC or other federal or state agencies and the information
“significantly contributed to the success of the action”; and
(3) the “original information” was reported “through an
entity’s internal whistleblower . . . procedures,” the entity
either gave the information to the SEC or “provided results of
an audit or investigation initiated in whole or in part in
response” to this information and the information the entity
submitted to the SEC satisfies either of the other two scenarios.
17 C.F.R. 240.21F-4(c)(1)–(3).2 In the preamble to Rule 21F-
2
17 C.F.R. § 240.21F-4(c) in its entirety provides:
(c) Information that leads to successful enforcement.
The Commission will consider that you provided original
information that led to the successful enforcement of a
judicial or administrative action in any of the following
circumstances:
(1) You gave the Commission original
information that was sufficiently specific, credible,
and timely to cause the staff to commence an
examination, open an investigation, reopen an
investigation that the Commission had closed, or to
inquire concerning different conduct as part of a
current examination or investigation, and the
Commission brought a successful judicial or
administrative action based in whole or in part on
conduct that was the subject of your original
information; or
(2) You gave the Commission original
information about conduct that was already under
examination or investigation by the Commission,
the Congress, any other authority of the federal
9
4(c), the SEC noted that “a whistleblower is only entitled to an
award if one of [the] three general standards is satisfied.”
Adopting Release, 76 Fed. Reg. at 34,357 n.438 (emphasis
added).
B.
The question before us is whether Rule 21F-4(c)’s three
fact patterns under which a whistleblower’s information “led
to” a successful enforcement action are exhaustive, as the
Commission interpreted the regulation in its denial of the
petitioners’ award applications. We conclude that the
government, a state Attorney General or securities
regulatory authority, any self-regulatory
organization, or the PCAOB (except in cases where
you were an original source of this information as
defined in paragraph (b)(5) of this section), and your
submission significantly contributed to the success
of the action.
(3) You reported original information through
an entity’s internal whistleblower, legal, or
compliance procedures for reporting allegations of
possible violations of law before or at the same time
you reported them to the Commission; the entity
later provided your information to the Commission,
or provided results of an audit or investigation
initiated in whole or in part in response to
information you reported to the entity; and the
information the entity provided to the Commission
satisfies either paragraph (c)(1) or (c)(2) of this
section. Under this paragraph (c)(3), you must also
submit the same information to the Commission in
accordance with the procedures set forth in
§ 240.21F–9 within 120 days of providing it to the
entity.
10
regulation is ambiguous and defer to the Commission’s
interpretation in accordance with the United States Supreme
Court’s holding in Kisor v. Wilkie, 139 S. Ct. 2400 (2019).
An agency merits deference if it reasonably interprets its
own “genuinely ambiguous” regulation. Nat’l Lifeline Ass’n,
983 F.3d at 507 (quoting Kisor, 139 S. Ct. at 2414). Genuine
ambiguity can arise, as the Supreme Court explained, in a
variety of circumstances, as when a regulation “may prove
susceptible to more than one reasonable reading.” Kisor, 139 S.
Ct. at 2410.
“Ambiguity, however, is necessary but not sufficient for
us to afford deference. The court must also ask ‘whether the
character and context of the agency interpretation entitles it to
controlling weight.’” Nat’l Lifeline Ass’n, 983 F.3d at 507
(quoting Kisor, 139 S. Ct. at 2416). The Supreme Court
provided three guiding principles for courts to apply in
determining whether an agency’s interpretation of its own
genuinely ambiguous regulation warrants deference. First, the
interpretation “must be one actually made by the
agency.” Kisor, 139 S. Ct. at 2416. In other words, “it must be
the agency’s ‘authoritative’ or ‘official position,’ rather than
any more ad hoc statement not reflecting the agency’s
views.” Id. (citation omitted). Second, “the agency’s
interpretation must in some way implicate its substantive
expertise.” Id. at 2417. And third, “an agency’s reading of a
rule must reflect ‘fair and considered judgment’ to receive . . .
deference.” Id. (citation omitted).
We first consider whether Rule 21F-4(c) is genuinely
ambiguous. Both the petitioners and the SEC contend that the
regulation is unambiguous—in the petitioners’ view, the
regulation unambiguously allows for scenarios other than the
three enumerated in the Rule to satisfy the “led to” standard;
11
according to the SEC, however, the list of three fact patterns is
unambiguously exhaustive. We disagree and find Rule 21F-
4(c) ambiguous.
Rule 21F-4(c) does indeed “prove susceptible to more than
one reasonable reading.” Kisor, 139 S. Ct. at 2410. In the
petitioners’ favor is the fact that the regulation’s prefatory
language, which states that whistleblowers will satisfy the “led
to” standard “in any of the following circumstances,” does not
expressly limit the standard to the three enumerated fact
patterns, as the SEC has acknowledged in the past. 17 C.F.R.
§ 240.21F-4(c); see In the Matter of the Claim for Award in
Connection with Redacted, Rel. No. 89551, 2020 WL 4720539,
at *4 (recognizing that “Rule 21F-4(c) does not expressly state
that the three components are the only way to establish ‘led
to’”). For example, absent from the prefatory text is any
restricting or limiting language, including the word “only.” See
17 C.F.R. § 240.21F-4(c). Its absence is noteworthy given that
the Commission used “only” in its Adopting Release to explain
that the three fact patterns are exclusive. Adopting Release,
76 Fed. Reg. at 34,357 n.438 (“a whistleblower is only entitled
to an award if one of [the] three general standards is satisfied”)
(emphasis added).
On the other hand, there is no clear textual signal that fact
patterns other than the three explicitly enumerated provide
alternatives for a whistleblower to establish that the “led to”
standard has been met. Notably missing from the regulations
are words or phrases indicating that the three listed fact patterns
are merely illustrative—for example, “among others,”
“including,” “not limited to” or “such as.” Nor did the
12
Commission reserve to itself any residual or catch-all authority
to issue awards in other circumstances.
And, finally, a word about expressio unius est exclusio
alterius, the maxim upon which the petitioners rely.
Petitioners’ Reply Br. 6. As courts and commentators have
noted, this canon (if it can be called a canon) is entirely
dependent upon context. See Chevron U.S.A. Inc. v. Echazabal,
536 U.S. 73, 81 (2002) (“expression unius properly applies
only when in the natural association of ideas in the mind of the
reader that which is expressed is so set over by way of strong
contrast to that which is omitted that the contrast enforces the
affirmative inference.”); Reed Dickerson, The Interpretation
and Application of Statutes 234–35 (1975). When context
indicates a list is meant to be exclusive, the “canon” applies;
when context does not so indicate, the “canon” does not apply.
There is thus much truth to the observation that “this maxim is
at best a description, after the fact, of what the court has
discovered from context.” Dickerson, supra, at 235. Here, there
are no clues pointing one way or the other. The level of detail
in the three fact patterns could plausibly be interpreted as the
manifestation of an intent to be exhaustive but it could just as
plausibly be interpreted as merely setting forth a template for
the required degree of causality one must establish to satisfy
the “led to” standard. Unfortunately, even after applying the
“‘traditional tools’ of construction,” Kisor, 139 S. Ct. at 2415,
this regulation remains “impenetrable.” Id. Rule 21F-4(c),
then, can be read in more than one way—limiting the “led to”
standard to the three enumerated fact patterns and/or allowing
the SEC to consider others.
Because we find the regulation genuinely ambiguous, we
next consider whether the Commission’s interpretation
warrants deference. Although our inquiry cannot be “reduce[d]
to any exhaustive test,” we follow the guideposts set forth by
13
the Supreme Court in Kisor and conclude that it does.
139 S. Ct. at 2416.
First, the SEC’s interpretation reflects its “authoritative”
and “official position.” See id. (citation omitted). The
petitioners do not dispute this, nor can they because the
Commission’s reading “emanate[s] from those actors . . .
understood to make authoritative policy,” was pronounced in
the SEC’s Adopting Release and has been reaffirmed in public
adjudicative orders. Nat’l Lifeline Ass’n, 983 F.3d at 511
(citation omitted) (analyzing Kisor’s first interpretive
guidepost); see Adopting Release, 76 Fed. Reg. at 34,357 n.438
(“[A] whistleblower is only entitled to an award if one of [the]
three general standards is satisfied.”); In the Matter of the
Claim for Award in Connection with Redacted, Rel. No. 89551,
2020 WL 4720539, at *4 (“If . . . a claimant does not fall within
any of the three circumstances identified in the rule, then he or
she is not entitled to an award.”); In the Matter of the Claim for
Award in Connection with Redacted, Rel. No. 82897, 2018 WL
1378788, at *4 (Mar. 19, 2018) (declining to “adopt a more
flexible or lax standard” for the “led to” requirement).
Second, the interpretation “implicate[s] [the
Commission’s] substantive expertise” in implementing the
whistleblower program. Kisor, 139 S. Ct. at 2417. Granted, the
“basis for deference ebbs” under this factor “when ‘[t]he
subject matter [in dispute] is distan[t] from the agency’s
ordinary’ duties or ‘fall[s] within the scope of another agency’s
authority.’” Id. (alterations in original) (quoting City of
Arlington v. FCC, 569 U.S. 290, 309 (2013) (Breyer, J.,
concurring in part and concurring in judgment)). But the
subject matter in dispute here—the Commission’s process for
determining whistleblower award eligibility—is part and
parcel of the SEC’s statutorily assigned duties. Indeed,
“Congress has explicitly entrusted the Commission with
14
implementation and oversight of the program.” Nat’l Lifeline
Ass’n, 983 F.3d at 511; see 15 U.S.C. § 78u-6(j) (granting SEC
“authority to issue such rules and regulations as may be
necessary and appropriate to implement the provisions”
establishing whistleblower award program). And no other
agency is involved in whistleblower award determinations.
Furthermore, the whistleblower program “is laden with
carefully considered implicit and explicit policy judgments on
the part of the Commission,” including balancing the burden of
administering the whistleblower regime while providing an
adequate incentive for potential whistleblowers to come
forward. Nat’l Lifeline Ass’n, 983 F.3d at 511; see In the Matter
of the Claim for Award in Connection with Redacted, Rel. No.
89551, 2020 WL 4720539, at *4 (discussing SEC’s decade of
experience administering program and policy considerations at
play in developing it).
The petitioners protest that determining a whistleblower’s
eligibility for an award is not “rocket science” and therefore
cannot lie within the Commission’s substantive expertise.
Agencies can and frequently do, as the SEC does here, possess
expertise in fields of varying complexity, including in those
less convoluted than “rocket science.” The SEC’s
interpretation of its whistleblower award program regulations
undoubtedly implicates its “policy expertise.” Kisor, 139 S. Ct.
at 2417.
Third and finally, the SEC’s reading “reflect[s] [its] ‘fair
and considered judgment.’” Id. The Commission has
consistently justified its interpretation “from both a policy and
an interpretive standpoint.” Nat’l Lifeline, 983 F.3d at 512; see
In the Matter of the Claim for Award in Connection with
Redacted, Rel. No. 89551, 2020 WL 4720539, at *4 (more lax
“led to” standard “would risk introducing speculative and
complex causal chains that would be difficult and
15
impracticable . . . to investigate and evaluate,” while limiting
to three circumstances “sends a clear signal to all potential
whistleblowers of what is expected of them”); In the Matter of
the Claim for Award in Connection with Redacted, Rel. No.
82897, 2018 WL 1378788, at *4 (standard “was considered and
commented on at length during the adoption of the
whistleblower rules” and “was carefully tailored . . . to provide
a uniform standard that would apply to all claimants”). And
there is no indication that the Commission’s interpretation is
merely a “convenient litigating position or post hoc
rationalizatio[n] advanced to defend past agency action against
attack.” Kisor, 139 S. Ct. at 2417 (alteration in original)
(internal quotation marks and citation omitted); see In the
Matter of the Claim for Award in Connection with Redacted,
Rel. No. 89551, 2020 WL 4720539, at *4 (“[I]t has been the
Commission’s consistent practice for almost a decade now to
apply the rule in this manner.”). Thus, the SEC’s interpretation
is a product of its fair and considered judgment.
In sum, given that the text of Rule 21F-4(c) is genuinely
ambiguous, the SEC’s interpretation is entitled to deference
pursuant to the interpretive guideposts announced by the
Supreme Court in Kisor. Accordingly, the petitioners’ claim
that the Commission’s reading does not fall within the bounds
of reasonable interpretation fails.
C.
Before this court, the petitioners now assert that the
Commission erred in denying their award applications because
they have satisfied the “led to” standard’s second fact pattern
under Rule 21F-4(c)(2). This argument is forfeit because they
did not raise it before the SEC and offer no reasonable
explanation for failing to do so. See 15 U.S.C. § 78y(c)(1) (“No
objection to an order or rule of the Commission, for which
16
review is sought under this section, may be considered by the
court unless it was urged before the Commission or there was
reasonable ground for failure to do so.”); Springsteen-Abbott v.
SEC, 989 F.3d 4, 7 (D.C. Cir. 2021) (“Congress has prohibited
us from considering issues not raised before the SEC.”).
The petitioners maintain that they preserved this argument
in their challenges to the CRS’s preliminary determination by
asserting in footnotes that they “incorporate[] . . . all
information and arguments” made in their award applications
and “do[] not waive any argument or position.” J.A. 273 n.21,
282 n.20. But they fail to provide any citation to the portion of
their original award applications where they made this
argument. Indeed, an examination of their memoranda in
support of their application reveals that they did not explain
how they have satisfied the second—or any—of the three fact
patterns in Rule 21F-4(c). They merely assert that they “clearly
satisf[y] Congress’ ‘led to’ standard.” J.A. 20, 102 (emphasis
omitted). For this reason, the SEC never addressed this
argument in its review of the petitioners’ challenge to the
CRS’s preliminary determination—the petitioners’ counsel’s
protestations to the contrary at oral argument notwithstanding.
See J.A. 293 (petitioners “appear to concede that they have not
satisfied the three fact patterns set forth in Rule 21F-4(c)”).
Merely disclaiming the “waive[r] [of] any argument or
position” does not preserve an argument that was never made
before the Commission. See Schneider v. Kissinger, 412 F.3d
190, 200 n.1 (D.C. Cir. 2005) (“It is not enough merely to
mention a possible argument in the most skeletal way, leaving
the court to do counsel’s work.”). If a generic disclaimer
sufficed for preservation, litigants would never risk forfeiting
or waiving an argument and could raise arguments on appeal
that neither a district court nor an administrative agency had an
opportunity to consider nor the opposing party the chance to
17
rebut. “As an appellate court, ‘we are a court of review, not of
first view.” Capitol Servs. Mgmt., Inc. v. Vesta Corp., 933 F.3d
784, 789 (D.C. Cir. 2019) (quoting Cutter v. Wilkinson,
544 U.S. 709, 718 n.7 (2005)).3
For the foregoing reasons, the petitions for review are
denied.
So ordered.
3
The petitioners’ remaining argument that Rule 21F-4(c) is
inconsistent with the Congress’s intent as expressed in the Dodd–
Frank Act and therefore does not warrant deference under Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837 (1984), is meritless.
KAREN LECRAFT HENDERSON, Circuit Judge, concurring
in the judgment: I agree with my colleagues’ conclusion that
the Securities and Exchange Commission’s (SEC or
Commission) interpretation of Exchange Act Rule 21F-4(c),
17 C.F.R. § 240.21F-4(c), is reasonable and warrants deference
if the text of the regulation is ambiguous. See Per Curiam Op.
at 15. I write separately because, to me, the text of Rule 21F-
4(c) unambiguously limits whistleblower award eligibility to
the three enumerated fact patterns and the deference analysis
under Kisor v. Wilkie, 139 S. Ct. 2400 (2019), is unnecessary.
“[B]efore concluding that a rule is genuinely ambiguous,
a court must exhaust all the ‘traditional tools’ of construction.”
Id. at 2415 (quoting Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837, 843 n.9 (1984)). “That means a
court cannot waive the ambiguity flag just because it found the
regulation impenetrable on first read.” Id.; see also Raymond
M. Kethledge, Ambiguities and Agency Cases: Reflections
After (Almost) Ten Years on the Bench, 70 VAND. L. REV. EN
BANC 315, 319 (2017) (“It matters very much . . . that judges
work very hard to identify the objective meaning of the text
before giving up and declaring it ambiguous.”). With a little
extra effort, I am left with no doubt that Rule 21F-4(c) is
unambiguous.
To begin, I again agree with my colleagues that Rule 21F-
4(c) contains no “clear textual signal that fact patterns other
than the three explicitly enumerated provide alternatives for a
whistleblower to establish that the ‘led to’ standard has been
met.” Per Curiam Op. at 11. They rightly highlight the absence
of any language indicating that the three fact patterns are
merely illustrative, as well as any reservation of residual or
catch-all authority for the SEC to consider other scenarios in
determining award eligibility. Id. at 11–12. So far, so good.
In my view, however, they place too much significance on
the omission of the word “only” from the Rule’s prefatory text.
2
Id. at 11; see 17 C.F.R. § 240.21F-4(c) (before enumerating the
three fact patterns, the Rule states that the “Commission will
consider that [a claimant] provided original information that
led to the successful enforcement of a judicial or administrative
action in any of the following circumstances”) (emphasis
added). Without this word, they conclude, we must speculate
whether the SEC intended the list of three fact patterns to be
exhaustive—especially given that the Commission saw fit to
use “only” in the release document announcing the regulation.
Per Curiam Op. at 11 (citing Securities Whistleblower
Incentives and Protections, 76 Fed. Reg. 34,300, 34,357 n.438
(June 13, 2011) (“a whistleblower is only entitled to an award
if one of [the] three general standards is satisfied”)).
But there is more than one way to skin a cat and, with a
language as versatile as ours, “only” is not the sole way to
connote exclusivity. The Rule makes clear that the “led to”
standard is met in “any of the following circumstances,” giving
no hint that it might consider other (undefined) circumstances.
17 C.F.R. § 240.21F-4(c). It then lists three—and only three—
sets of circumstances that lead to award eligibility. Id.§ 240.21F-4(c)(1)–(3). I believe nothing more is required.1 As
we have stated, “[t]here is no need for [the court] to rely on
what the [regulation] did not say to infer [its meaning] because
[its meaning] is made clear through its plain language.” Mercy
Hosp., Inc. v. Azar, 891 F.3d 1062, 1069 (D.C. Cir. 2018)
(emphasis in original).
1
In a previous order, the Commission stated that “Rule 21F-
4(c) does not expressly state that the three components are the only
way to establish ‘led to.’” In the Matter of the Claim for Award in
Connection with Redacted, Rel. No. 89551, 2020 WL 4720539, at *4
(Aug. 13, 2020). I read this merely to acknowledge the plain fact that
the Rule does not use the word “only.” As I explain, however, the
Commission did not need to.
3
There’s more. Also applicable here is the interpretive
canon expressio unius est exclusio alterius,2 which means
“expressing one item of [an] associated group or series
excludes another left unmentioned.” Chevron U.S.A. Inc. v.
Echazabal, 536 U.S. 73, 80 (2002) (alteration in original)
(quoting United States v. Vonn, 535 U.S. 55, 65 (2002)).
Applied to Rule 21F-4(c), the canon means that the
Commission expressly enumerated three fact patterns that
result in award eligibility and thereby excluded from
consideration others left unmentioned.
Granted, we have cautioned that the expressio unius canon
is a “feeble helper in an administrative setting,” Adirondack
Med. Ctr. v. Sebelius, 740 F.3d 692, 697 (D.C. Cir. 2014)
(quoting Cheney R.R. Co. v. ICC, 902 F.2d 66, 69 (D.C. Cir.
1990)), and that it “applies only when ‘circumstances support[]
a sensible inference that the term left out must have been meant
to be excluded,’” NLRB v. SW Gen., Inc., 137 S. Ct. 929, 940
(2017) (quoting Echazabal, 536 U.S. at 81). Those
circumstances exist here. The text alone provides more than
enough to sensibly infer that the list is exhaustive because a
close examination reveals that the Commission crafted
detailed, specific, multidimensional and exceedingly flexible
fact patterns that can be satisfied in multiple ways. See, e.g.,
17 C.F.R. § 240.21F-4(c)(1) (causing SEC to “commence an
examination,” “open” or “reopen an investigation” or “inquire
concerning different conduct as part of a current examination
or investigation”); id. § 240.21F-4(c)(2) (providing original
information about conduct already under investigation by other
federal or state agencies, including “the Commission, the
Congress, any other authority of the federal government, a state
2
My colleagues’ minimization to the contrary notwithstanding,
Per Curiam Op. at 12, our circuit has often used the expressio unius
canon qua canon. See, e.g., Taylor v. FAA, 895 F.3d 56, 65 (D.C. Cir.
2018) (applying expressio unius “canon”).
4
Attorney General or securities regulatory authority, any self-
regulatory organization, or [under some conditions] the [Public
Company Accounting Oversight Board]”); id. § 240.21F-
4(c)(3) (reporting information through “entity’s internal
whistleblower, legal, or compliance procedures . . . before or at
the same time [the claimant] reported them to the Commission”
and entity’s subsequent audit or investigation is “initiated in
whole or in part in response to” this information). On my
reading, the Commission’s detailed and refined fact patterns
plainly evince the intent to limit the circumstances to which it
will extend award eligibility to those expressly enumerated in
Rule 21F-4(c) rather than a willingness to entertain other yet-
to-be-defined scenarios on an ad hoc basis. Because the text of
Rule 21F-4(c) unambiguously restricts whistleblower award
eligibility to the three fact patterns provided, no additional
analysis is necessary.3
3
At oral argument, the petitioners’ counsel attempted to
support their reading by comparing the Rule listing three fact patterns
to a restaurant’s menu offering “any of the following” three items—
spaghetti marinara, Bolognese or carbonara—and suggesting that “a
patron could naturally order buttered spaghetti.” Oral Argument at
4:45–5:20. Perhaps. But this analogy provides little, if any, help
because a diner might make this leap based on a restaurant’s custom
or practice but not based on the text of the menu. And that’s what we
are dealing with here—the text. Nothing in the text of the
hypothetical menu indicates that diners are free to order items not
included on the menu. Indeed, nothing in the text of the small-town
Alabama diner’s menu listing “breakfast,” “lunch” and “dinner”
gave Vinny Gambini and Mona Lisa Vito, two big-city New Yorkers,
a choice other than—as the text stated—“breakfast,” “lunch” and
“dinner.” MY COUSIN VINNY (20th Century Fox 1992).