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Wingo v. The Southern Co.

United States District Court, N.D. Alabama, Southern Division

May 29, 2018

BRETT WINGO, Plaintiff,
THE SOUTHERN COMPANY, et al., Defendants.



         Before this Court is a Partial Motion to Dismiss, (doc. 30), filed by Defendants The Southern Company (“Southern Company”), Southern Company Services, Inc. (“SCS”), and Thomas A. Fanning (“Fanning”) (collectively, “Defendants”). In their Motion, Defendants argue that certain claims in Plaintiff's Complaint should be dismissed under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted. As stated more fully below, Defendants' Partial Motion is due to be GRANTED in PART and DENIED in PART.

         I. Facts and Procedural Background[1]

         In 2010 Southern Company and one of its subsidiaries, Mississippi Power Company, began construction of a “clean coal” power plant in Kemper, Mississippi (the “Kemper Project”). The Kemper Project was ultimately intended to convert coal into synthetic gas, which would then be fed into a combustion turbine in order to create electricity. Defendants intended to achieve the Kemper Project commercial operations date (“COD”) by May 2014 in order to take advantage of substantial federal tax credits and other financial incentives contingent on the timely completion of the Kemper Project.

         In August 2011, Southern Company promoted Plaintiff to be a Project Manager at the Kemper Project, where he was responsible for the plaint's coal gasification and gas cleanup systems. For three consecutive years, Plaintiff received positive performance review and prestigious Southern Company awards.

         In June 2013, Southern Company employees were asked to participate in a “cultural survey” to root out complacency and encourage persons to step forward to report safety or ethical violations without fear of retaliation. The cultural survey was apparently put in place following two public incidents that were disfavorable to Defendants' public image: (1) an explosion at another of Defendants' power plants caused by a failure to follow safety procedures, and (2) a recalled and amended SEC filing where Southern Company was forced to admit “material weaknesses” in controls over financial reporting at Mississippi Power on the Kemper Project. Plaintiff was selected by his supervisor Tim Pinkston (“Pinkston”) to participate in the cultural survey.

         During a June 20, 2013 interview as part of the cultural survey, Plaintiff reported to Southern Company representatives that he believed the May 2014 COD was not achievable. Plaintiff told the representatives that he was concerned about the Southern Company's reporting of the May 2014 COD because the allegedly unachievable date would mislead shareholders. Plaintiff also feared that in a rush to comply with the May 2014 COD, the Southern Company would take safety shortcuts that could potentially harm its employees. Southern Company representatives were initially receptive to this information and directed Plaintiff to create and supervise a new “resource loaded schedule” (“RLS”) in which the various components of construction and testing are brought together to ensure proper match-up with initial plans. Plaintiff was to complete the first RLS by mid-September 2013.

         After completing the first RLS in early September, Plaintiff informed his supervisor at the time, Joe Miller (“Miller”), that based on Plaintiff's experience he believed the Kemper Project COD would run into the fourth quarter of 2014, if not into 2015. This assessment was buttressed by a Quantitative Risk Assessment (“QRA”)'s finding conducted by Southern Company's outside auditor PwC. The QRA uses statistical analysis of thousands of individual tasks performed in the Kemper Project to attempt to predict a COD. The January 2014 QRA, which relied in part on Plaintiff's RLS, reported a high probability that the COD would occur later than 2015.

         Despite Plaintiff's RLS and PwC's QRA, both of which predicted the Kemper Project COD occurring in 2015, Southern Company management manipulated Plaintiff's RLS to claim that a 2014 COD was still achievable. Because governmental and private incentives for the project of almost half a billion dollars were contingent on a 2014 COD, Plaintiff alleges that Southern Company management continued to repress Plaintiff's conclusions and pressure employees to take dangerous shortcuts that affected the viability of the Kemper Project.

         Plaintiff sought to escalate his concerns about the viability of the 2014 COD and his manager's manipulation of Plaintiff's RLS to upper level managers. Following a meeting between engineers and Mississippi Power Company Vice President John Huggins (“Huggins”) where Huggins emphasized meeting the 2014 COD, Plaintiff informed Huggins that he believed certain managers had manipulated Plaintiff's information to justify the viability of a 2014 COD. Huggins appeared to brush off Plaintiff's concerns, and Plaintiff reiterated these concerns in an email a day later. Huggins did not respond to the email, but called Plaintiff days later to berate him for putting the concerns in writing and told him to meet in person to discuss the issue.

         On March 6, 2014, Plaintiff met with Huggins and another vice president overseeing the Kemper Project to again inform them of the issues surrounding the 2014 COD. Huggins and the vice president both represented that they would take corrective action, such as retracting the QRA, and generally told Plaintiff that his concerns were too great for the problem at hand.

         Out of fear that Huggins and other senior management were involved in promulgating the fraudulent QRA, Plaintiff decided that he should inform Defendant Fanning, who was and continues to be the CEO of Southern Company. On March 10, 2014, Plaintiff called Fanning and detailed management's alleged manipulation of his RLS and the 2014 QRA to produce a false 2014 COD. He informed Fanning that he had raised these issues with other upper-level management, but no corrective action had been taken. Plaintiff also stated his fears that Fanning could be personally liable for misrepresenting the COD to stockholders. Fanning assured Plaintiff that Plaintiff had “done the right thing” and that Fanning would ensure that the problem was dealt with.

         Following this meeting, Plaintiff alleges that Southern Company managers began to retaliate against him for his whistleblowing activities. On March 13, 2014, Plaintiff was excluded from a meeting among Southern Company managers to address future QRA projections. On April 2, 2014, Plaintiff was instructed by Senior Project Manager Brett Wingard to relinquish Plaintiff's scheduling responsibilities, supposedly because Plaintiff's help was needed in location instrument air stations. According to Plaintiff, this reassignment was a low-level task and a clear demotion. On May 13, Plaintiff handed over his scheduling responsibilities to Miller. Plaintiff urged Miller to keep the schedule “real.” Miller replied that if he did that, he would be out of a job.

         Plaintiff continued to report safety violations he observed to Southern Company managers, even as he was marginalized and assigned to non-managerial tasks. Other employees provided Plaintiff with reports and photographs of unsafe conditions at the plant, such as improperly installed piping and valves which could allow a dangerous release of high-pressure steam. Plaintiff reported those violations as well, and management reacted by ignoring these obvious dangers and warning Plaintiff that he was risking his position at the Southern Company.

         On August 29, 2014, Plaintiff requested a two-week vacation. Southern Company management instead placed Plaintiff on forced administrative leave. Before being escorted from his worksite, Plaintiff was instructed to turn over his access card and collect his personal effects. In October, 2014, Plaintiff submitted a Form Tip, Complaint, or Referral (“TCR”) to the SEC, alleging that the Southern Company had engaged in fraudulent, material acts and practices in violation of Rule 10b-5 by misrepresenting the construction schedule and construction milestones to regulators and investors. Plaintiff was eventually told by Southern Company management in December 2014 that he would not be returning to work, although Plaintiff alleges that he was not actually terminated until February 2016.

         Plaintiff filed his first Sarbanes-Oxley Act (“SOX”) retaliation complaint with the United States Department of Labor Occupational Safety and Health Administration (“OSHA”) on February 15, 2015 (the “First Complaint”). Two days later, Plaintiff supplemented the original retaliation complaint with an additional, shorter document (the “Supplemental Complaint”). Defendants were informed of Plaintiff's charges against them later in February 2015, although according to Defendants they only ...

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