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Calderone v. Sonic Houston JLR, L.P.

United States Court of Appeals, Fifth Circuit

January 9, 2018

STEVEN A. CALDERONE, Plaintiff-Appellant,
v.
SONIC HOUSTON JLR, L.P., Defendant-Appellee.

         Appeal from the United States District Court for the Southern District of Texas

          Before SMITH, BARKSDALE, and HIGGINSON, Circuit Judges.

          JERRY E. SMITH, Circuit Judge:

         Steven Calderone, a former employee of Sonic Houston JLR, L.P. ("Sonic"), claims he was unlawfully terminated under the Consumer Financial Protection Act ("CFPA") for reporting racial discrimination in the extension of credit. Calderone appeals an adverse summary judgment. We affirm.

         I.

         Sonic, a car dealership, employed Calderone as a salesman. Calderone alleges that Sonic refused to extend financing or sell cars to customers who were members of racial minorities. Calderone reported the discrimination to supervisors, managers, and eventually the human resources department and was allegedly terminated for those actions.

         Calderone brought several claims against Sonic, only one of which, the CFPA claim, is the subject of this appeal. The CFPA, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, prohibits "covered per-son[s]" and "service provider[s]" from terminating or discriminating against any "covered employee" who provides information regarding a violation of federal law subject to the jurisdiction of the Consumer Financial Protection Bureau ("CFPB" or "the Bureau"). 12 U.S.C. § 5567(a).

         Sonic's actions, if covered, allegedly would violate a section of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691 et seq., which prohibits creditors[1] from discriminating against "any applicant, with respect to any aspect of a credit transaction-on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract), " id. § 1691(a)(1). The ECOA is a statute within generally the jurisdiction of the Bureau. 12 U.S.C. § 5481(12)(D).

         The district court granted summary judgment to Sonic, holding that, as an automobile dealer, Sonic is excluded from the CFPB's jurisdiction by 12 U.S.C. § 5519(a). Sonic provided an affidavit from its financial director stating that it is "predominantly engaged in the sale, leasing, and servicing of motor vehicles. The dealership helps customers obtain retail credit or retail leases from third-party lenders. However, the dealership does not approve (or deny) financing or provide financing or leases directly to customers."

         We agree that Sonic fits under the § 5519(a) automobile dealer exclusion. This does not ultimately end the inquiry, however, as Calderone points out on appeal. But because § 5481(12) extends the dealer exclusion to the laws subject to the jurisdiction of the Bureau, we affirm.

         II.

         The anti-retaliatory termination provision on which Calderone sues reads as follows:

No covered person or service provider shall terminate or in any other way discriminate against, or cause to be terminated or discriminated against, any covered employee or any authorized representative of covered employees by reason of the fact that such employee or representative, whether at the initiative of the employee or in the ordinary course of the duties of the employee (or any person acting pursuant to a request of the employee), has-provided, caused to be provided, or is about to provide or cause to be provided, information to the employer, the Bureau, or any other State, local, or Federal, government authority or law enforcement agency relating to any violation of, or any act or omission that the employee reasonably believes to be a violation of, any provision of this title or any other provision of law that is subject to the jurisdiction of the Bureau, or any rule, order, standard, or prohibition prescribed by the Bureau . . . .

12 U.S.C. § 5567(a)(1) (emphasis added). To determine whether Sonic unlawfully terminated Calderone, then, we must ask which provisions of law are subject to the jurisdiction of the Bureau. Those are found at 12 U.S.C. § 5481(12), which reads, "Except as otherwise specifically provided in section 5519 of this title, subtitle G or subtitle H, the term ...


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