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Flynn v. United States Securities and Exchange Commission

United States Court of Appeals, Fourth Circuit

December 7, 2017

RORY C. FLYNN, Petitioner,
v.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Respondent.

          Argued: September 13, 2017

         On Petition for Review of an Order of the Merit Systems Protection Board. (DC-1221-14-1124-W-1)

         ARGUED:

          Rory Christopher Flynn, Silver Spring, Maryland, for Petitioner.

          Allison Kidd-Miller, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

         ON BRIEF:

          Bruce M. Bettigole, EVERSHEDS SUTHERLAND (US) LLP, Washington, D.C., for Petitioner.

          Laura Walker, David L. Peña, Laura Cunningham, Office of the General Counsel, UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Washington, D.C.; Chad A. Readler, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

          Before MOTZ, DUNCAN, and WYNN, Circuit Judges.

          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 . . . [o]rdinarily, 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. "[W]hen 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. § ...


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