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Plaintiff Tayo Daramola, a Canadian citizen, is a former employee of Oracle Canada, resided in Montreal at all relevant times. Daramola’s offer letter from Oracle stated that Daramola would be assigned to an office in Canada, but Daramola worked remotely. His employment agreement with Oracle stated that it was governed by Canadian law.

By logging into Oracle’s computer systems, Daramola could conduct business and collaborate with colleagues in the United States, including employees of Oracle America. Both Oracle America and Oracle Canada are wholly owned subsidiaries of Oracle Corporation, a California-based company that develops and hosts software applications for institutional customers.

One such Oracle product was the “Campus Store Solution,” a subscription software service for college bookstores. In July 2017, Daramola was assigned as lead project manager for the implementation of Campus Store Solution at institutions of higher education in Texas, Utah, and Washington.

Daramola came to believe that Campus Store Solution was defrauding customers. The product was billed as an e-commerce platform with specific functionalities, but Daramola thought Oracle had no way of delivering the promised features, at least at the agreed-upon price. Daramola reported the suspected fraud to Oracle America and the SEC.

After doing so, Daramola was removed as a project manager. Daramola’s supervisor at Oracle America, Douglas Riseberg, offered Daramola an opportunity to work on another Campus Store Solution project, but Riseberg revoked the offer when Daramola again expressed his unwillingness to take part in fraud. Riseberg also downgraded Daramola’s job performance rating. Believing he had no other option, Daramola resigned from the company. He sent his resignation letter to an HR representative of Oracle Canada in Montreal and copied his “U.S. manager,” Matthew Posey.

Daramola then filed a lawsuit in federal court in California against Oracle America, Riseberg, and other Oracle America employees. Daramola claimed that the defendants violated the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.S.C. § 78u-6(h)(1), and California law, Cal. Lab. Code § 1102.5, by retaliating against him for protected whistleblower activity.

After allowing jurisdictional discovery, the district court dismissed the claims underFederal Rule of Civil Procedure 12(b)(6). The court concluded that the anti-retaliation provisions in the two Acts do not apply extraterritorially, and that here, applying those provisions would be extraterritorial because Daramola’s principal worksite was in Canada. The California law claims “founder[ed] on the same extraterritoriality barrier.” Because Daramola had already amended his complaint twice before, the district court dismissed the case with prejudice.

Darmola appealed. The 9th Circuit Court of Appeals was asked to decide whether the whistleblower anti-retaliation provisions in the Sarbanes-Oxley and Dodd-Frank Acts apply outside the United States, and, if not, whether this case involves a permissible domestic application of the statutes. Its answer to both questions was no and it affirmed the dismissal in the published case of Daramola v Oracle America -22-15959 (February 2024).

The question in this case is whether either of these anti-retaliation provisions apply to Daramola, a Canadian working out of Canada for a Canadian subsidiary of a U.S. parent company.

To answer that question, the Court of Appeals applied a well-known principle of statutory interpretation known as the “presumption against extraterritoriality.” See, e.g., Abitron Austria GmbH v. Hetronic Int’l, Inc., 600 U.S. 412, 417 (2023); RJR Nabisco, Inc. v. European Cmty., 579 U.S. 325, 335 (2016); United States v. Alahmedalabdaloklah, 76 F.4th 1183, 1202-03 (9th Cir. 2023). That presumption is this: “It is a longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Abitron, 600 U.S. at 417 (quoting Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 255 (2010)). Presumptively, “foreign conduct is generally the domain of foreign law.” Id. (alteration omitted) (quoting Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 455 (2007)).

This same reasoning disposes of Daramola’s state law claims. Daramola alleged that Oracle’s retaliation violated California’s labor laws and its public policy, as reflected in Cal. Bus. & Prof. Code § 17200.

Analogous to the federal presumption against extraterritoriality, California presumes that its legislature does “not intend a statute to be ‘operative, with respect to occurrences outside the state, . . . unless such intention is clearly expressed or reasonably to be inferred from the language of the act or from its purpose, subject matter or history.’” Sullivan v. Oracle Corp., 254 P.3d 237, 248 (Cal. 2011) (quoting Diamond Multimedia Sys., Inc. v. Superior Court, 968 P.2d 539, 553 (Cal. 1999)).