Case: 17-20029 Document: 00514299677 Page: 1 Date Filed: 01/09/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 17-20029
Fifth Circuit
FILED
January 9, 2018
Lyle W. Cayce
Clerk
STEVEN A. CALDERONE,
Plaintiff–Appellant,
versus
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
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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 fed-
eral law subject to the jurisdiction of the Consumer Financial Protection Bur-
eau (“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 juris-
diction 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 stat-
ing that it is “predominantly engaged in the sale, leasing, and servicing of
motor vehicles. The dealership helps customers obtain retail credit or retail
1Though Sonic does not directly provide credit, the ECOA defines “creditor” to include
those who “regularly arrange[ ] for the extension” of credit. 15 U.S.C. § 1691a(e). This could
be interpreted to include automobile dealers, such as Sonic, who provide customer credit
applications to lenders. See Treadway v. Gateway Chevrolet Oldsmobile Inc., 362 F.3d 971,
978 (7th Cir. 2004).
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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 sub-
ject 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 cov-
ered employees by reason of the fact that such employee or represen-
tative, 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 unlaw-
fully 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 ‘enumerated consumer laws’
means . . . the Equal Credit Opportunity Act.”
The exception noted is the automobile dealer exclusion, which provides,
Except as permitted in subsection (b), the Bureau may not exercise any
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rulemaking, supervisory, enforcement or any other authority, including
any authority to order assessments, over a motor vehicle dealer that is
predominantly engaged in the sale and servicing of motor vehicles, the
leasing and servicing of motor vehicles, or both.
12 U.S.C. § 5519(a). The exclusion goes on to state that it does not apply to
dealers that directly extend financing to consumers and that it is not meant to
modify, limit, or supersede the authority of any other federal agencies related
to automobile dealers. § 5519(b)–(c).
A.
Calderone contends that Sonic is a service provider subject to the anti-
retaliation provision in § 5567(a). He explains that automobile dealers that do
not provide direct financing to consumers are exempt from the CFPB’s regula-
tory and enforcement authority but are not exempt from consumer protection
laws otherwise under the CFPB’s jurisdiction. Under Calderone’s theory, even
if Sonic is excepted as an entity from the CFPB’s authority, it still could be
covered by § 5567(a) because that provision regards laws subject to the CFPB’s
jurisdiction, not persons. Because the Secretary of Labor, and not the CFPB,
enforces § 5567, the CFPB’s regulatory authority does not matter. §§ 5567(c),
5519(c).
Sonic uses the automobile dealer exclusion to claim that automobile
dealers are exempt from § 5567(a) as an entity outside the Bureau’s jurisdic-
tion. That does not follow. Importantly, § 5519(c) expressly reserves the power
of other federal agencies over automobile dealers. And it is the Department of
Labor, not the CFPB, that enforces § 5567(a). Thus, nothing in § 5519(a) pre-
cludes the Department of Labor, a separate federal entity, from enforcing the
anti-retaliation provision against dealers even though the CFPB could not. 2
2 Calderone also asserts that the automobile dealer exclusion does not limit the en-
forcement power of the CFPB. That is unavailing. Calderone interprets § 5519 to be limited
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B.
We look to the plain language and statutory structure. 3 Section 5567(a)
forbids covered persons and service providers from terminating employees who
report information about violations of laws subject to the CFPB’s jurisdiction.
The statute enumerates these laws in § 5481 and includes the ECOA, the stat-
ute Calderone believes Sonic violated. Given the above, we must examine
§ 5481(12) to decide which laws are subject to the Bureau’s jurisdiction.
Though the ECOA is enumerated, see § 5481(12)(D), the section bears
this preface: “Except as otherwise specifically provided in section 5519 of this
title . . . the term ‘enumerated consumer laws’ means . . . .” Thus, the enumer-
ated consumer laws are subject to the automobile dealer exclusion. Just as
§ 5519(a) clarifies that automobile dealers are outside the Bureau’s jurisdic-
tion, § 5481(12) clarifies that the statute itself is outside the Bureau’s juris-
diction as applied to those dealers. The ECOA, as applied to automobile
dealers, is therefore not a statute subject to the jurisdiction of the Bureau,
which means that, as a matter of law, Sonic could not have violated § 5567(a).
III.
Calderone contends that, even if he is mistaken in his belief about the
statutory structure, as long as he reasonably believed Sonic was discriminat-
ing, his claim can survive. Calderone centers his position on Wallace v. Tesoro
Corp., 796 F.3d 468 (5th Cir. 2015), to explain that the anti-retaliation provi-
sion protects an employee who “reasonably believes” conduct violates an
to the CFPB’s general powers under Part B and not to extend to the CFPB’s enforcement
powers under Part E. Though that may be so, § 5519 removes the CFPB’s “enforcement or
any other authority.” This is ultimately immaterial, because the CFPB does not enforce
§ 5567, and § 5519(c) expressly preserves the authority of other federal agencies over automo-
bile dealers.
3 Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461–62 (2002).
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enumerated statute, even if it actually does not.
The present controversy is distinct from the dispute in cases such as
Wallace, however, because the question is not whether Calderone reasonably
believed some underlying statute—here the ECOA—was violated. As long as
the plaintiff’s belief is reasonable, he still can benefit from anti-retaliation
provisions even if he makes a mistake of law or fact about the underlying dis-
criminatory conduct. Here we instead are asking, regardless of the reasonable-
ness of Calderone’s belief about the underlying conduct, whether he is
protected, as a statutory matter, by the anti-retaliatory-termination provision,
§ 5567(a). If that provision has no force against Sonic, Calderone’s termination
could not have been unlawful under § 5567(a), regardless of whether Sonic was
actually discriminating. Though the CFPA’s anti-retaliation provision protects
an employee who tells her employer about an act that she “reasonably believes
to be a violation of . . . any . . . provision of law that is subject to the jurisdiction
of the Bureau,” CFPA’s “reasonable belief” language does not modify the Bur-
eau’s jurisdiction. Under the CFPA, a plaintiff may have a reasonable, but
mistaken, belief of fact or law that a statute has been violated. But the CFPA
does not permit a plaintiff’s reasonable beliefs to expand the CFPB’s
jurisdiction.
As noted above, the ECOA, as enumerated, expressly incorporates the
automobile dealer exclusion, so § 5567(a)’s protections have no bearing on
Sonic. See 12 U.S.C. § 5481(12). The district court rightly decided that a CFPA
retaliation claim cannot lie where statutory interpretation shows that the
reported discrimination is not in violation of a law within the CFPB’s jurisdic-
tion. See Murray v. UBS Sec., LLC, 2015 WL 769586, at *5–6 (S.D.N.Y.
Feb. 24, 2015).
A reasonable belief that discrimination is occurring under the ECOA
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cannot extend the jurisdictional scope of the CFPA to include actors to which
the statute does not apply. Nor does the reasonableness of a plaintiff’s belief
matter when it comes to the operative reach of a remedy, at least insofar as the
statutes at issue here are concerned. This would allow an individual’s belief to
alter the scope of a remedial statute. Section 5481 subjects the enumerated
statutes to § 5519, a contrary interpretation is not reasonable, and even a rea-
sonable belief otherwise could not extend a remedial provision beyond what
Congress enacted.
The summary judgment is AFFIRMED.
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