Newman v. Lehman Brothers Holdings Inc.
901 F.3d 19
1st Cir.2018Background
- Newman worked in Lehman Brothers' corporate communications and reported suspected securities-law violations to the company's Alert Line and supervisors.
- She was approved for short-term disability, had difficulty obtaining long-term benefits, and alleges she was ostracized and ultimately terminated in 2008.
- Newman filed an OSHA administrative complaint under SOX on July 23, 2008, alleging termination and other retaliatory acts; the complaint twice listed an April 23, 2008 termination date.
- The district court dismissed Newman's SOX claim against the Lehman Plan and Neuberger defendants under Fed. R. Civ. P. 12(b)(6) for failure to exhaust administrative remedies, finding the OSHA complaint filed one day late and that some defendants were not named.
- Newman appealed, arguing timeliness and that other post-termination retaliatory acts (denial of benefits) were actionable; she also sought reconsideration based on allegedly newly proffered evidence.
- The First Circuit affirmed dismissal: it treated the OSHA filing deadline as mandatory (time-bar), concluded the OSHA complaint was untimely as pleaded, rejected arguments raised for the first time on appeal, and found Newman’s “new” evidence was merely newly proffered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Newman timely exhausted SOX administrative remedies by filing OSHA complaint within 90 days of alleged termination | Newman argued her termination occurred after filing OSHA complaint (or date uncertain), so filing was timely | Defendants argued OSHA complaint shows termination April 23, 2008, making July 23 filing one day late | Held: OSHA complaint (incorporated into the pleadings) shows April 23 termination; filing was untimely and claim dismissed for failure to exhaust |
| Whether the district court improperly considered the OSHA complaint on 12(b)(6) review | Newman argued district court engaged in improper fact-finding, should not rely on OSHA interview statements | Defendants argued OSHA complaint was incorporated in SAC and properly considered on 12(b)(6) | Held: Court properly considered the uncontested OSHA complaint incorporated into the SAC; exhibit controls over conflicting vague pleading |
| Whether other alleged retaliatory acts (denial of benefits) render OSHA filing timely | Newman contended denial of benefits occurred within 90 days and could salvage SOX claim | Defendants argued entire SOX claim was subject to dismissal and plaintiff waived reliance on other acts by not arguing them below | Held: Although the denial-of-benefits claim might have been timely, Newman waived arguing those acts below; appellate review barred the new contention |
| Whether newly proffered evidence warranted reconsideration | Newman offered benefit statements claiming employment continued into 2009 and disputing April 23 termination | Defendants argued evidence was available earlier and thus not newly discovered | Held: Evidence was merely newly proffered, not newly discovered; district court did not abuse discretion in denying reconsideration |
Key Cases Cited
- Jorge v. Rumsfeld, 404 F.3d 556 (1st Cir.) (pleaded facts accepted and reasonable inferences drawn on 12(b)(6))
- Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315 (1st Cir.) (documents incorporated by reference merge into pleadings)
- Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1 (1st Cir.) (Twombly plausibility standard explained)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (complaint must plead facts raising relief above speculative level)
- Bonilla v. Muebles J.J. Álvarez, Inc., 194 F.3d 275 (1st Cir.) (administrative-exhaustion deadlines are mandatory, akin to statutes of limitations)
- Day v. Staples, Inc., 555 F.3d 42 (1st Cir.) (OSHA filing deadline interpretation under SOX)
- Iverson v. City of Bos., 452 F.3d 94 (1st Cir.) (theories not timely raised below are waived on appeal)