* Trial lawyer Jeffrey Norris had been fired in 2009
* One email to Washington Post, another had secret report
* Earlier emails questioned Mark Cuban's patriotism
* US appeals court says new evidence should be reviewed
By Jonathan Stempel
April 10 A longtime U.S. Securities and Exchange
Commission trial lawyer who was fired for sending inappropriate
emails deserves a chance to get his job back by presenting
medical evidence that those actions won't happen again, a
federal appeals court ruled.
Tuesday's decision by the U.S. Federal Circuit Court of
Appeals in Washington, D.C. overturned an arbitrator's ruling
upholding the August 2009 dismissal of Jeffrey Norris, a 17-1/2
year SEC veteran.
Norris had been fired for sending three emails in late 2008,
including one to the Washington Post espousing political views,
one containing a confidential report about suspicious activity,
and an internal email demeaning SEC support staff.
He had earlier been suspended for two weeks in 2007 for
emails questioning the patriotism of Mark Cuban, the billionaire
owner of the Dallas Mavericks basketball team, for his apparent
backing of a movie suggesting that the government planned the
Sept. 11, 2001 attacks as a pretext to go to war with Iraq.
Cuban is defending himself against SEC civil insider trading
charges into his sale of Mamma.com shares.
Norris argued that his 2008 emails were influenced by
personal matters including his wife becoming disabled, his
daughter suffering from Asperger's Disorder, and his own
suffering from Attention Deficit Hyperactivity Disorder.
But he said that by the time of the November 2010
arbitration, his circumstances had improved, and his
psychiatrist believed the email activity was unlikely to recur.
The arbitrator found that Norris would deserve to regain his
job "if sympathy were the sole deciding factor," but that the
SEC had the right to fire him based on what it knew at the time.
Writing for a three-judge Federal Circuit panel, however,
Judge Timothy Dyk said Congress intended that arbitrators like
Norris' review "all aspects" of a case, including new evidence
suggesting the original penalty might be too harsh.
"We hold that where new evidence in mitigation of the
penalty imposed is presented," Dyk wrote, "the evidence must be
considered in determining whether the agency's imposed penalty
The court ordered the arbitrator to consider whether Norris'
dismissal struck "a responsible balance within tolerable limits
Michael Kator, a lawyer for Norris, said he hopes the SEC
will reinstate his client, whom he said is in his 50s.
"It's a nice decision," he said. "It resolves an important
issue in civil service law that was ambiguous: whether
post-removal medical evidence could be considered in determining
an appropriate penalty. It's important to be able to say the
reasons that an action was taken are no longer valid."
SEC spokesman John Nester declined to comment.
Norris' emails to Cuban were detailed in a 2011 report by
then-SEC Inspector General David Kotz that cleared the regulator
of misconduct in its probe of Cuban's trades. Kotz found that
Norris was not involved "in any way" in that investigation.
The case is Norris v. SEC, U.S. Federal Circuit Court of
Appeals, No. 2011-3129.