Mele v. Fed Rsrv Bank NY

Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit

2-24-2004

Mele v. Fed Rsrv Bank NY Precedential or Non-Precedential: Precedential

Docket No. 03-1556 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004

Recommended Citation "Mele v. Fed Rsrv Bank NY" (2004). 2004 Decisions. Paper 941. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/941

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PRECEDENTIAL Yoon Hi Greene (Argued) Federal Reserve Bank of New York UNITED STATES 33 Liberty Street COURT OF APPEALS New York, NY 10045 FOR THE THIRD CIRCUIT Shari Leventhal Federal Reserve Bank of New York 33 Liberty Street No. 03-1556 New York, NY 10045

Counsel for Appellee MICHAEL MELE,

Appellant OPINION v.

FEDERAL RESERVE BANK CHERTOFF, Circuit Judge. OF NEW YORK Appellant Michael Mele alleges his employment was terminated in violation of On Appeal from the the Federal Reserve Bank of New York’s United States District Court for the (“the Bank”) Management Guide to District of New Jersey Personnel Policies (“Guide”). The District (Dist. Ct. No. 02-cv-01216) Court granted the Bank’s motion to District Judge: Hon. Anne E. Thompson dismiss all counts on the pleadings pursuant to Fed. R. Civ. P. 12(c). 1 For the

Argued: November 18, 2003 1 Rule 12(c) provides: “After the Before: RENDELL, BARRY, and pleadings are closed but within such time CHERTOFF, Circuit Judges as not to delay the trial, any party may move for judgment on the pleadings. If, (Filed: February 24, 2004) on a motion for judgment on the pleadings, matters outside the pleadings Brian E. Fleisig (Argued) are presented to and not excluded by the Pearce & Massler court, the motion shall be treated as one 25 Main Street for summary judgment and disposed of as Court Plaza North provided in Rule 56, and all parties shall Hackensack, NJ 07601-7025 be given reasonable opportunity to present Counsel for Appellant all material made pertinent to such a

reasons stated below, we will affirm the became verbally and physically abusive, District Court’s dismissal. and physically escorted Mele out of his office. Mele immediately reported the I. incident to the Bank’s Human Resources Jurisdiction in this Court is proper Department. As a result of these events, because the judgment is a final order under Mele was suspended with pay, and later 28 U.S.C. § 1291. This Court’s review of was terminated for what was deemed a Rule 12(c) motion to dismiss is plenary. “misconduct.” Leamer v. Fauver, 288 F.3d 532, 535 (3d On January 13, 2002, Mele filed a Cir. 2002). As with a Rule 12(b)(6) four-count complaint against the Bank in motion, this Court “view[s] the facts the Superior Court of New Jersey. Count alleged in the pleadings and the inferences One alleged breach of contract based on to be drawn from those facts in the light the Bank’s failure to adhere to the Guide’s most favorable to the plaintiff.” Id. That warning procedures or graduated is, the motion should not be granted discipline measures in terminating Mele. “unless the moving party has established Count Two claimed wrongful termination that there is no material issue of fact to on the ground that Mele’s purported resolve, and that it is entitled to judgment “misconduct” did not fall into one of the in its favor as a matter of law.” Id. four categories of employee misconduct Mele was employed as a facilities set forth in the Guide. Count Three pled engineer at the East Rutherford Operations breach of the implied covenant of good Center (“EROC”) of the Bank in Bergen faith and fair dealing, and Count Four County, New Jersey, from July 1995 to alleged wrongful interference with Mele’s January 2000. Mele claims that, in early prospective economic advantage in January 2000, he was denied access to a continued employment. Mele does not particular area of EROC on the ground that advance any authority other than the Guide he was required to be armed or to support any of these claims. accompanied by an armed individual, On March 19, 2002, the Bank filed despite the fact that he had previously a notice of removal, pursuant to 12 U.S.C. enjoyed unhampered access to that area. §632.2 On January 23, 2003, the District Thereafter, Mele reported to his supervisor Court granted the Bank’s motion to Terrence McCorry, who, he alleges, dismiss all counts on the pleadings denied his request for a written copy of the pursuant to Fed. R. Civ. P. 12(c). The Bank’s policy regarding access to the area, 2 This section provides, in pertinent motion by Rule 56.” As the District Court part: “[A]ny Federal Reserve bank which noted, because the Bank had already filed is a defendant in any such suit may, at any an answer in the action, the motion is for a time before the trial thereof, remove such judgment on the pleadings pursuant to suit from a State court into the district Rule 12(c). court of the United States.”

District Court explained that Mele’s claims Third. To make contracts. rested on the premise that he had an ... employment contract with the Bank, a conclusion undermined by both the Fifth. To appoint by its board of language of the Federal Reserve Act, 12 directors a president, vice U.S.C. § 341, Note 3, and case law presidents, and such officers and interpreting the Act to restrict the Bank’s employees as are not otherwise power to enter into employment contracts. provided for in this chapter, to The District Court, however, opted not to define their duties, require bonds address the open question of the Bank’s for them and fix the penalty power to contract, concluding that even thereof, and to dismiss at pleasure “assuming in arguendo that the Federal such officers or employees. . . . Reserve Bank could enter into an employment contract, nothing inside the 12 U.S.C. § 341 (emphasis added). The Guide prevents the Federal Reserve Bank Bank asserts that the language of from terminating an employee in paragraph five confers an indefeasible plaintiff’s position, in view of the power to terminate employees at will. disclaimer found on the front cover.” Mele argues that paragraph five’s Notice of appeal was timely filed on “dismiss[al] at pleasure” provision should February 24, 2003. be read in conjunction with paragraph three, so that it is not treated as a limitation II. on the Bank’s authority to enter into The Bank contends we should contracts, including employment contracts. affirm the dismissal of Mele’s claim Mele tries to reconcile these provisions by because the Federal Reserve Act, 12 suggesting that binding the Bank to U.S.C. § 341, Note 3, restricts the Bank’s employment contracts is consistent with authority to enter into employment the reserved power to dismiss employees contracts, so that any implied contract at will because “any party to any contract created by the Guide is unenforceable. can breach its duties provided only that it The statute enumerates the general powers pay damages ensuing from the breach.” of the Federal Reserve Bank: (Appellant Br. at 8). Upon the filing of the organization We reject such a strained certificate with the Comptroller of interpretation of the statute. Mele’s the Currency a Federal Reserve position would rewrite Congress’s specific bank shall become a body instruction that the Bank retain the power corporate and as such, and in the to dismiss at pleasure into a statutory name designated in such damages clause. The better reading organization certificate, shall have recognizes that paragraph three generally power— refers to “contracts,” and that the more ... specific reference in paragraph five to

employment should be read as a limitation to create such rights by reference to on the general power to enter into independent sources are violative of the contracts. “[A] recognized tenet of statute and void thereunder.” Bollow, 650 statutory interpretation directs that a F.2d at 1098. M oreover, the cases have specific provision in an enactment prevails specifically rejected claims, similar to over a seemingly irreconcilable general those of Mele, that an employee is one.” LaVallee Northside Civic Ass'n v. contractually protected by personnel Virgin Islands, 866 F.2d 616, 621 (3d Cir. policies and practices, including written 1989) (citing 2A A. Sutherland, Statutes policies of progressive discipline. See and Statutory Construction § 51.05, at 499 Little, 601 F. Supp. at 1376; Armano, 468 (N. Singer 4th ed. 1984)). F. Supp. at 675-76; Obradovich, 569 F. While this Court has not previously Supp. at 790. Rather, “[a]ny implied addressed this particular statute, “[c]ourts contract based upon the Federal Reserve’s uniformly hold that [the Federal Reserve personnel rules would exceed the Federal Act] precludes the enforcement of any Reserv e’s autho rity, and be employment contract against a Federal unenforceable.” Id. at 790. Such a Reserve Bank and prevents the contractual obligation would undermine development of any reasonable the Congressional intent to protect Federal expectation of continued employment.” Reserve Banks from restrictions in Jaffee v. Federal Reserve Bank of carrying out their duties. See Armano, 468 Chicago, 586 F. Supp. 106, 107-08 (N.D. F. Supp. at 676. Ill. 1984) (citing cases); see Magel v. Mele points to no authority to the Federal Reserve Bank of Philadelphia, 776 contrary. We now explicitly join the F. Supp. 200, 205 (E.D. Pa. 1991), aff’d 5 approach uniformly adopted by other F.3d 1490 (3d Cir. 1993); Bollow v. courts considering this issue. We hold that Federal Reserve Bank of San Francisco, the Federal Reserve Act precludes 650 F.2d 1093, 1097-98 (9th Cir. 1981); enforcement against a Federal Reserve Little v. Federal Reserve Bank of Bank of an employment contract that Cleveland, 601 F. Supp. 1372, 1375-77 would compromise its statutory power to (N.D. Ohio 1985); Obradovich v. Federal dismiss at pleasure, and prevents the Reserve Bank of New York, 569 F. Supp. development of a reasonable expectation 785, 790 (S.D.N.Y. 1983); Armano v. of continued employment. As a result, Federal Reserve Bank of Boston, 468 F. Mele’s argument that he was terminated in Supp. 674, 675-76 (D. Mass. 1979); see contravention of the Guide’s policies is also Inglis v. Fienerman, 701 F.2d 97 (9th without merit. Cir. 1983) (analyzing similar language under the Federal Home Loan Bank Act). III. These courts have noted that “no Mele contends that even if the Bank process or tenure rights are conferred on has the power to dismiss employees at reserve bank employees . . . [and] attempts will, the Guide relinquishes this right in

order to retain those employees, and the This guide provides a description Bank should not be allowed to disavow of certain Bank policies, this supposed quid pro quo. Mele, procedures and benefits. This however, cites no authority to support the guide is not intended to be a proposition that the Bank is authorized to contract of employment, nor does it waive or relinquish the right to terminate supersede or modify the Bank’s employees at will.3 We need not decide Operating Bulletins and Circulars, whether it is ever possible for a Federal the specific contracts and Reserve Bank to relinquish this right documents covering Bank-provided because in this case it is clear that it did benefits, or the Bank’s right, under not do so. federal law, to terminate any The Guide actually disclaims any employee at will.5 limitation on the Bank’s statutory power to dismiss at pleasure. The Guide contains the following statement on the cover in cannot now complain that it is somehow italicized font:4 “unfair” or “unjust” for the Bank to “disavow” the Guide. 5 3 At argument, even Mele concedes Mele argues that the District Court that there is no case supporting the erroneously relied on the disclaimer in proposition that the Bank has the authority ruling on the Rule 12(c) motion. The to waive the dismiss at pleasure provision. general rule is that a “district court ruling Mele merely directs this Court’s attention on a motion to dismiss may not consider to a general line of estoppel cases. See, matters extraneous to the pleadings.” In re e.g., Heckler v. Cmty. Health Servs. of Burlington Coat Factory Sec. Lit., 114 Crawford County, Inc., 467 U.S. 51, 59 F.3d 1410, 1426 (3d Cir. 1997). (1984). None of the cases deal However, an exception to this general rule specifically with the authority of the Bank provides that a “‘document integral to or to relinquish an explicit statutory grant of explicitly relied upon in the complaint’ power to dismiss at pleasure. may be considered ‘without converting the motion [to dismiss into one for summary 4 Mele contended at argument that judgment.’” Id. (quoting Shaw v. Digital the disclaimer is not actually on the cover Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. since the Guide was placed in a binder. 1996)) (emphasis added in In re Even if the binder cover had to be opened Burlington). Here, consideration of the before the text of the disclaimer was disclaimer in the Guide clearly falls within revealed, this does not undermine the this exception for documents “integral to claim that the Bank specifically indicated or explicitly relied upon in the complaint.” it was not relinquishing its power to The Guide forms the heart of Mele’s dismiss at pleasure, and that the disclaimer complaint. Thus, the disclaimer is just the was conspicuously placed such that Mele kind of evidence that the “integral”

This disclaimer specifically emphasizes not allege the termination was invalid the Bank’s federal right to terminate any because it was not authorized by the Board employee at will, and rejects any notion of Directors or its valid delegate. What he that the Guide is intended to be a alleged—and what we have rejected—was relinquishment of this power. that his termination was forbidden by the The District Court concluded that in Guide. Mele first raised the suggestion light of the disclaimer, nothing in the that the termination was unauthorized in a Guide prevents the Bank from terminating letter submitted after a status conference in employees. Because we conclude above which the District Court provided Mele that the Federal Reserve Act precludes with a final opportunity to submit case law enforcement of an employment contract in support of his opposition to the 12(c) that would compromise the Bank’s motion. statutory power to dismiss at pleasure, we “‘It is black-letter law that [a] need not reach the issue of whether the motion to dismiss for failure to state a disclaimer is sufficient under ordinary claim . . . is to be evaluated only on the employment contract law principles. But pleadings.’” A.D. Bedell Wholesale Co., the disclaimer certainly rebuts Mele’s Inc. v. Philip Morris, Inc., 263 F.3d 239, contention that the Bank intentionally 266 (3d Cir. 2001) (quoting Mahone v. relinquished the power to dismiss at Addicks Utility Dist., 836 F.2d 921, 935 pleasure (assuming it could do so). (5th Cir. 1988)) (other internal quotations omitted). An entirely new claim for relief IV. presented in a letter brief does not Mele suggests on appeal that the constitute an amendment to the pleadings. Bank cannot claim the protection of the In deciding a Rule 12(c) motion, the court employment at will provision because the does not consider matters outside the termination was not undertaken by the pleadings.6 Here, viewing the complaint Board of Directors, as required by 12 “in the light most favorable to the U.S.C. § 341. In his complaint, Mele did plaintiff,” the Bank has established that “there is no material issue of fact to resolve, and that it is entitled to judgment documents exception was intended to in its favor as a matter of law.” Leamer, encompass, so that plaintiff cannot 288 F.3d at 534. maintain a claim “by extracting an isolated statement from a document and placing it in the complaint, even though if the 6 statement were examined in the full Mele’s own brief concedes that “a context of the document, it would be clear Court may only consider the Complaint that the statement [did not support the and the reasonable inferences therefrom” claim].” In re Burlington Coat Factory, in deciding a Rule 12(c) motion. 114 F.3d at 1426. (Appellant Br. at 27, n.5).

V. For the foregoing reasons, we affirm the District Court’s grant of the motion to dismiss pursuant to Fed. R. Civ. P. 12(c).