17 F. Supp. 3d 304
S.D.N.Y.2014Background
- Carmen Segarra, a Senior Bank Examiner at the Federal Reserve Bank of New York (FRBNY), examined Goldman Sachs from late 2011 until her termination on May 23, 2012. She alleges termination for reporting Goldman’s noncompliance with SR 08-08 and for refusing to change her findings.
- SR 08-08 is an advisory letter from the Board of Governors describing expectations for compliance risk management; parties dispute whether it is a binding regulation.
- Segarra sued under the FDIA whistleblower provision, 12 U.S.C. § 1831j, and asserted several state-law claims; Defendants moved to dismiss and she sought leave to amend.
- Defendants argued § 1831j does not provide for individual liability and that SR 08-08 is nonbinding guidance, so reporting noncompliance with it is not reporting a “law or regulation.”
- The court dismissed § 1831j claims against individual defendants because the statute does not impose individual liability and dismissed the § 1831j claim against FRBNY because SR 08-08 lacks the force of law; it declined supplemental jurisdiction over state claims and denied leave to amend as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1831j permits suit against individual employees | Segarra sought relief against Silva, Koh, Kim as retaliators | § 1831j only targets agencies/institutions, not individuals | Court: statute does not permit individual liability; dismiss claims vs individuals |
| Whether reporting noncompliance with SR 08-08 is protected under § 1831j | SR 08-08 is a regulation; reporting its violation is reporting a "law or regulation" | SR 08-08 is advisory guidance, not a binding regulation | Court: SR 08-08 is guidance lacking force of law; not protected under § 1831j |
| Whether Segarra sufficiently pleaded she provided information about other laws/regulations that led to termination | FAC lists other statutes and claims she reported violations generally | Defendants: FAC does not allege she was fired because of reports about those statutes; allegations tie termination to SR 08-08 finding | Court: FAC fails to allege causal connection to other laws; amendment would be futile |
| Whether court should exercise supplemental jurisdiction over state-law claims after dismissal of federal claim | Segarra invoked federal-question jurisdiction | Defendants: federal claim fails; state claims should be dismissed or remanded | Court: declines to exercise supplemental jurisdiction; dismisses state claims without prejudice |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards — factual plausibility required)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Chrysler Corp. v. Brown, 441 U.S. 281 (1979) (distinction between substantive rules and policy/guidance)
- Christensen v. Harris County, 529 U.S. 576 (2000) (interpretative rules and guidance lack force of law)
- Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533 (D.C. Cir. 1986) (factors for distinguishing regulations from policy guidance)
- Matter of Seidman, 37 F.3d 911 (3d Cir. 1994) (agency "Statement of Policy" is not a "law or regulation" for removal/penalty statutes)
- Garcetti v. Ceballos, 547 U.S. 410 (2006) (speech pursuant to official duties not protected by First Amendment)