9th circuit affirms extraterritoriality barriers in Canadian whistleblower case: Daramola v. Oracle America, Inc.

In Daramola v. Oracle Am., Inc. (9th Cir. 2024) 92 F.4th 833, the Court of Appeals for the Ninth Circuit affirmed that key provisions of the Sarbanes-Oxley Act, Dodd-Frank Act, California Whistleblower Protection Act, and California Unfair Competition Law do not apply extraterritorially.

Plaintiff, a Canadian citizen working in Canada for a Canadian subsidiary of a U.S. company, alleged retaliation after reporting fraud to Defendant and the SEC. He sued under the Sarbanes-Oxley Act, the Dodd-Frank Act, Cal. Lab. Code § 1102.5, and Cal. Bus. & Prof. Code § 17200. The district court dismissed all claims under Federal Rule of Civil Procedure 12(b)(6) based on extraterritoriality.

On appeal, the Ninth Circuit affirmed, applying the presumption against extraterritoriality and the two-step framework from Abitron Austria GmbH v. Hetronic Int’l, Inc. (2023) 600 U.S. 412, 417, and RJR Nabisco, Inc. v. European Cmty. (2016) 579 U.S. 325, 337. It held that the anti-retaliation provisions of the Sarbanes-Oxley and Dodd-Frank Acts do not apply to foreign conduct and that Plaintiff’s employment was not located in the United States. The court rejected Plaintiff’s argument that his access to Defendant’s web servers in California constituted domestic conduct. It also dismissed the state law claims, finding that insufficient relevant conduct occurred in California.

Full opinion

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