ABB Inc. v. Tate & Renner
Congress did not intend to occupy the entire field when it enacted the Sarbanes-Oxley Act, and parties may bring state-law claims. Allegedly, Suresh Ahluwalia hired the defendant law firm, Tate & Renner, to represent Ahluwalia in a claim against ABB Dubai. Tate & Renner's claim on behalf of Ahluwalia, alleging that ABB Dubai violated the federal Sarbanes-Oxley Act, was dismissed, because it involved employment that took place outside the U.S. The defendant allegedly knew that the act requires conduct in the U.S. when it filed another complaint against the plaintiff, ABB Inc. ABB Inc. sued Tate & Renner, alleging that Tate & Renner should have appealed the dismissal of the first complaint, as opposed to filing a second complaint that included claims against ABB, which allegedly had no knowledge about or relationship with Ahluwalia and did not qualify as Ahluwalia's employer. ABB's complaint alleged abuse of process, vexatious suit and violation of the Connecticut Unfair Trade Practices Act. The defendant moved to dismiss and argued that the federal Sarbanes-Oxley Act pre-empts the plaintiff's state-law claims. The Sarbanes-Oxley Act does not explicitly state that Congress intended to pre-empt state law. To the contrary, the Sarbanes-Oxley Act provides, "Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law, or under any collective bargaining agreement." Ruling on an issue of apparent first impression in Connecticut, the court construed the language as "explicit evidence" that Congress generally did not intend to pre-empt state-law remedies. "Congress' statement that state law remedies are still available to employees," wrote the court, "is direct evidence that it has not exclusively occupied the field and left no room for the state to supplement it." The court also rejected the defendant's claim that the Whistleblower Protection Program, 49 United States Code §42121(b), restricts remedies for frivolous and bad-faith complaints brought under the Sarbanes-Oxley Act. The legislation does not provide that Congress intended to occupy the field exclusively. Its procedures do not conflict with the plaintiff's ability to allege state-law violations. The court denied the motion to dismiss.