Circuit Watcher

06-1939 Livingston v. Wyeth, Inc.
Before NIEMEYER and MICHAEL, Circuit Judges, and Claude M. HILTON, Senior United States District Judge¹
NIEMEYER, Circuit Judge: Relying on the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, Mark Livingston commenced this action against his employer Wyeth, Inc., a pharmaceutical company, alleging that Wyeth unlawfully discharged him because of his complaints to Wyeth’s management about Wyeth’s inability to implement on schedule a training program at its Sanford, North Carolina facility, supposing therefore that local employees would likely misrepresent or cover up the deficiencies in progress to internal compliance auditors and to the Food and Drug Administration. The training program was designed to train employees in good manufacturing practices, and its implementation was required by regulations of the Food and Drug Administration. Livingston asserted that in making his complaints, he reasonably believed that Wyeth’s potential conduct in misrepresenting or covering up the deficiencies in timely implementation of the program would constitute violations of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated under it, and therefore that his conduct was protected under the Sarbanes-Oxley Act.
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The district court entered summary judgment against Livingston, concluding that his complaints were not protected activity under the Sarbanes-Oxley Act because Livingston could not reasonably have believed that Wyeth was violating the securities laws. The court also concluded that Wyeth had shown, by clear and convincing evidence, that it had discharged Livingston for insubordination in threatening to have the police remove Wyeth’s Director of Human Resources from a company-sponsored holiday party and that Wyeth would have discharged Livingston regardless of whether he had complained about the progress of the training program.
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Because we conclude that no objectively reasonable basis existed for Livingston to have believed that Wyeth was violating the securities laws, we affirm. …
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MICHAEL, Circuit Judge, dissenting: I respectfully dissent from the majority’s holding that Mark Livingston can show no set of facts to entitle him to protection under the whistleblower provision of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A. … Livingston v. Wyeth, Inc.

1. for the Eastern District of Virginia, sitting by designation. [↩]