Casissa v. First Republic Bank, No. 4:2009cv04129 - Document 157 (N.D. Cal. 2012)

Court Description: ORDER GRANTING DEFENDANTS 119 MOTION FOR SUMMARY JUDGMENT. Signed by Judge Claudia Wilken on 7/24/2012. (ndr, COURT STAFF) (Filed on 7/24/2012)

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Casissa v. First Republic Bank Doc. 157 1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 FREDERICK J. CASISSA, Plaintiff, 5 6 7 8 v. FIRST REPUBLIC BANK, a division of MERRILL LYNCH BANK AND TRUST FSB; and DOES 1-20, Defendants. 9 United States District Court For the Northern District of California 10 11 ________________________________/ ELIZABETH RIGGINS, 14 15 18 19 20 21 22 23 24 FIRST REPUBLIC BANK, a division of MERRILL LYNCH BANK AND TRUST FSB; and DOES 1-20, Defendants. ________________________________/ Plaintiffs Frederick Casissa and Elizabeth Riggins bring claims against Defendant First Republic Bank concerning the termination of their employment. Defendant moves for summary judgment on Plaintiffs’ claims. Plaintiffs oppose Defendant’s motion. Having considered the papers filed by the parties and their arguments at the hearing, the Court GRANTS Defendant’s motion. BACKGROUND 25 26 27 ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (Docket No. 119) v. 16 17 No. C 09-4130 CW Plaintiff, 12 13 No. C 09-4129 CW The following facts are construed in favor of Plaintiffs, as the non-moving parties. 28 Dockets.Justia.com 1 Plaintiffs were originally hired by First Republic Bank. 2 Casissa Decl. ¶ 1; Riggins Decl. ¶ 1. 3 Lynch Bank & Trust Company, FSB acquired First Republic Bank. 4 Ben-Ora Decl. in Supp. of Notice of Removal ¶ 1. 5 acquisition, First Republic Bank continued to exist as an 6 operating division within Merrill Lynch. 7 N.A., subsequently acquired Merrill Lynch in 2009, and is 8 defending this case as successor-in-interest to Merrill Lynch. 9 In September 2007, Merrill Id. Following this Bank of America, Defendant employed Casissa as its Anti-Money Laundering United States District Court For the Northern District of California 10 (AML)/Bank Secrecy Act (BSA) Compliance Officer. 11 ¶ 1. 12 General Counsel at First Republic Bank. 13 included coordinating and managing the bank’s compliance with the 14 BSA. 15 Analyst, and she reported to Casissa. 16 Riggins’s duties included conducting investigations and preparing 17 Suspicious Activity Reports (SARs), reports made by a financial 18 institution to the Financial Crimes Enforcement Network (FinCEN), 19 a bureau of the United States Department of the Treasury, “of any 20 suspicious transaction relevant to a possible violation of law or 21 regulation.” 22 31 C.F.R. § 103.18). 23 Casissa Decl. Until 2008, Casissa reported to Edward Dobranski, the Id. Id. Casissa’s duties Defendant employed Riggins as an Anti-Money Laundering Id.; Riggins Decl. ¶ 1. 31 U.S.C. § 5318(g); 31 C.F.R. § 1020.320 (formerly In October 2007, Riggins received a copy of a news article 24 related to suspected criminal activity involving a Ponzi scheme by 25 two bank customers, Does One and Two. 26 Decl. ¶ 5. 27 Decl. ¶ 3, Ex. C; Casissa Decl. ¶ 5. 28 spoke to Dobranski about the article. Riggins Decl. ¶ 3; Casissa Riggins forwarded the article to Casissa. 2 Riggins Casissa and Riggins then Casissa Depo. Tr. 16:9-10. 1 The “substance” of what Casissa told Dobranski was that “there was 2 negative news on the [customer] and that we should open up an 3 investigation and file a SAR.” 4 Casissa both told Dobranski that they believed that “[a] SAR was 5 warranted.” 6 that they should “take no action”1 and “that we don’t need to file 7 a SAR because [the customer] had not been indicted, he hasn’t been 8 proven of any criminal activity, and that he stated it was just a 9 credit issue.” Id. at 16:15-18. Riggins Depo. Tr. 32:12. Riggins and Dobranski’s response was Casissa Decl. ¶ 5; id. at 16: 21-24. Casissa United States District Court For the Northern District of California 10 testifies that, in that conversation, “we didn’t say 11 specifically--I didn’t say specifically” to Dobranski that they 12 thought it would be a “violation of the law if we don’t file” a 13 SAR. 14 that [Dobranski] was aware that if we didn’t file the SAR, then 15 it’s a violation of the law.” 16 that Dobranski’s “difference of opinion” from her and Casissa 17 about filing a SAR constituted “impeding a law enforcement 18 investigation” by “not finding it necessary to look at it 19 further.” 20 she “was going to continue investigating” and that she “was 21 refusing to dismiss this client’s activity as reasonable and Casissa Depo. Tr. 125:16-18. Casissa “made the assumption Id. at 125:5-7. Riggins Depo. Tr. 30:3-18. Riggins believed Riggins told Dobranski that 22 23 1 24 25 26 27 28 Defendant objects to this statement in Casissa’s declaration on the basis that it contradicts his deposition testimony. Reply at 9. Defendant cites a portion of Casissa’s deposition testimony, in which he answered, “Correct,” to the statement, “So the substance of Mr. Dobranski’s reaction, as I understand your testimony, is he said he didn’t think filing a SAR was necessary.” Casissa Depo. Tr. 18:23-19:01. This is not contradictory. Casissa did not testify that this was the entirety of Dobranski’s response. Accordingly, the Court OVERRULES Defendant’s objection. 3 1 justified.” 2 that she was refusing to engage in conduct contrary to the law and 3 regulations governing her duties and responsibilities at First 4 Republic. Id. at 32:6, 32:18-24. She did not tell Dobranski Id. at 30:23-31:13. 5 Casissa decided to raise the issue to Brian Walsh and Robert 6 Werner, higher-level employees of Merrill Lynch who were involved 7 in filing SARs and in anti-money laundering activity. 8 Decl. ¶ 6; Casissa Depo. Tr. 19:2-20:20. Riggins also 9 communicated with Walsh about the issue. Riggins Decl. ¶ 5. Casissa United States District Court For the Northern District of California 10 Walsh expressed a belief that “additional research and an 11 investigation should be conducted as a result of the public 12 information and a potential SAR should be prepared.” 13 Decl. ¶ 6; Riggins Decl. ¶ 5. 14 Casissa A meeting with Casissa, Dobranski, Werner and other personnel 15 from Merrill Lynch was subsequently held, at which Dobranski “was 16 adamant that the bank was not going to file the SAR.” 17 Depo. Tr. 23:1-15. 18 a SAR was reversed in a conversation between Werner and Dobranski, 19 but he did not participate in such a conversation. 20 Tr. 28:6:12. 21 in November 2007, within thirty days of the date that he became 22 aware of the news report. 23 expressed any disapproval of Casissa or Riggins for raising the 24 issue with people at Merrill Lynch. 25 Depo. Tr. 43:22-44:2. 26 Casissa Casissa believes that the decision not to file Casissa Depo. Casissa believes that the SAR was ultimately filed Id. at 54:16-23. Dobranski never Id. at 22:19-22; Riggins In March 2008, Casissa and Riggins learned that a grand jury 27 subpoena related to another customer, Doe Three, had been served 28 on First Republic in August 2007. Casissa Decl. ¶ 7; Riggins 4 1 Decl. ¶ 5. 2 to the subpoena when it was received in August 2007. 3 Tr. 50:11-51:06. 4 role in complying with subpoenas. 5 136:19-137:3; Riggins Depo. Tr. 60:20-22. 6 his job duties at First Republic, Casissa would have followed up 7 on a subpoena by opening an investigation; in this instance, Doe 8 Three was already under investigation by First Republic. 9 78:2-17. First Republic began producing documents in response Smith Depo. Casissa and Riggins had no responsibility or Casissa Depo. Tr. 79:07-11, In the normal course of Id. at Casissa admits that he does not have any facts to United States District Court For the Northern District of California 10 support a contention that Dobranski had deliberately concealed the 11 subpoena from him, other than that he was not told about it. 12 at 60:18-24. 13 Id. Nonetheless, Casissa “was surprised and concerned that it had 14 not been brought to [his] attention before since it was part of 15 [his] responsibilities . . . to determine whether to report the 16 suspected criminal activity related to a subpoena.” 17 ¶ 7. 18 told him “not to worry about” it and to take no action. 19 Casissa Depo. Tr. 77:18-21.2 Casissa Decl. Casissa asked Dobranski about the subpoena, and Dobranski Id.; Casissa understood this to mean “not 20 21 22 23 24 2 25 26 27 28 At his deposition, Casissa was asked, “Is that when he said words to the effect as stated in paragraph 28 [of the Second Amended Complaint (2AC)], not to worry about the subpoena?” Casissa responded, “Correct.” Casissa Depo. Tr. 77:18-20. See 2AC ¶ 28 (“Dobranski instructed Casissa and Riggins ‘not to worry’ about the DOE 3 subpoena and to take no action with regard to the DOE 3 subpoena.”). He did not testify whether or not Dobranski directly stated he should not do anything about the subpoena. 5 1 to worry about it and don’t do anything with it.” 2 Tr. 77:23-25. 3 whether [he] should or should not file a suspicious activity 4 report.” 5 Dobranski’s direction meant he should not file a SAR, because, 6 based on the subpoena and a “314 request”3 they had received on 7 Doe Three, they “probably” had enough to file a SAR at that time. 8 Id. at 87:5-23.4 9 Casissa Depo. Dobranski did not tell Casissa “anything about Id. at 87:9-12. Nonetheless, Casissa believed In the conversation, Casissa did not tell Dobranski that he United States District Court For the Northern District of California 10 “refused to participate in conduct contrary to the law and 11 regulations governing their duties and responsibilities at the 12 bank.” 13 he understood the instruction to require him to violate the law. 14 Id. at 126:8-13. 15 bank, would understand the conversation to mean that Casissa was 16 opposed to breaking the law. 17 18 Id. at 126:1-7. He also did not mention to Dobranski that He assumed that Dobranski, as an attorney at a Id. at 126:14-18. Riggins did not directly interact with Dobranski about the subpoena. Riggins Depo. Tr. 68:23-69:03. She believed that she 19 20 21 22 23 24 In his declaration, Casissa states that, when he asked Dobranski about the subpoena, “He again informed me to take no action.” Casissa Decl. ¶ 7. Defendant objects to this statement in the declaration, arguing that it directly contradicts the deposition testimony. This is not contradictory, because Casissa did not testify that Dobranski said only “not to worry” about the subpoena. Thus, the Court OVERRULES this objection. 3 25 The parties do not state what a 314 request is. 4 26 27 28 Defendant states that Casissa admitted that a SAR was filed on Doe Three properly and timely, and cites pages of his deposition transcript in support. Mot. at 6-7 (citing Casissa Depo. Tr. 129:24-130:01). Defendant failed to include these deposition pages with its exhibits, but Plaintiffs have not disputed that a SAR was filed properly. 6 1 informed Dobranski through her actions that she was refusing to 2 follow his instruction to Casissa, because she continued her 3 investigation into Doe Three and included the subpoena in it. 4 at 73:24-74:12. 5 that she refused to participate in “withholding the knowledge of 6 that subpoena to Merrill Lynch and [Merrill Lynch’s] office of 7 global compliance.” 8 9 Id. By doing so, she believes that she communicated Id. at 74:13-15. About three days after his conversation with Dobranski about the subpoena, Casissa asked Werner if he was aware of the United States District Court For the Northern District of California 10 subpoena. 11 Werner that he was refusing to violate the law, and did not tell 12 him that he believed Dobranski was trying to make him do so, but 13 assumed that Werner would understand him to mean that. 14 128:16-24, 134:5-10. 15 the ramifications of going outside of First Republic to Merrill 16 Lynch and that he might lose his job. 17 told him that he and Riggins were protected. 18 Casissa also complained to Werner that Dobranski was hostile about 19 bringing First Republic’s AML/BSA program into compliance with 20 Merrill Lynch standards. 21 Casissa Depo. Tr. 133:14-134:4. Casissa did not tell Id. at Casissa told Werner that he was afraid of Casissa Decl. ¶ 7. Id. Werner At some point, Werner Depo. Tr. 46:18-47:6. On the same day, Riggins spoke about the subpoena with Werner 22 and Joane Herndon, from Merrill Lynch’s Office of Global 23 Compliance. 24 going to follow Dobranski’s instruction to Casissa not to worry 25 about the subpoena and that she “felt compelled to share the 26 existence of the subpoena with him.” 27 She did not tell him that she believed that she was being asked to 28 engage in unlawful activity. Riggins Decl. ¶ 8. She told Werner that she was not Riggins Depo. Tr. 82:4-9. Id. at 82:12-16. 7 1 After Casissa and Riggins brought the subpoena to the 2 attention of Werner, he asked Dobranski to travel to New York to 3 discuss the subpoena, because he was “extremely concerned . . . 4 about the potential ramifications of not having known about it and 5 having not coordinated on the anti-money laundering side,” due to 6 the “reporting obligations” that they “needed to evaluate.” 7 Werner Depo. Tr. 61:10-21. 8 uncertain as to what Dobranski knew or when he learned of the 9 subpoena, and it appeared that Dobranski lied at some point about During Werner’s investigation, he was United States District Court For the Northern District of California 10 the date that he learned of it. 11 Werner discussed with others his frustration that Dobranski was 12 resistant to changing First Republic’s procedures and his concerns 13 that Dobranski was used to “flying under the regulatory radar” as 14 a small bank and did not understand the “level of scrutiny” that 15 staff at First Republic “were going to get under the kind of 16 regulation that Merrill Lynch was subject to.” 17 Dobranski admits that the legal department, including Casissa, at 18 First Republic was remiss in not having a procedure in place by 19 which there was communication regarding subpoenas between the 20 individuals in charge of subpoenas and the AML group. 21 Depo. Tr. 97:17-98:14. 22 Id. at 85:10-17, 86:19-87:6. Id. at 45:14-25. Dobranski Plaintiffs contend that they were subsequently subjected to 23 retaliation by Dobranski and others at First Republic for their 24 insistence on complying with the BSA and reporting to Merrill 25 Lynch. 26 In April 2008, a new position was created at First Republic, 27 Senior Vice President of Risk Management, and Dave Montez, who 28 previously served as the audit director of the Federal Savings 8 1 Bank for Merrill Lynch, was moved into the role. 2 18:12-16, 21:5-22:25. 3 were consolidated under this position, including AML/BSA, because 4 best practices suggested that the risk units should be brought 5 together. 6 only from an audit perspective, not from an operations 7 perspective. 8 his termination, Casissa reported directly to Montez, and Montez 9 reported to Dobranski. Montez Depo. Tr. Several different areas of risk management Id. at 21:5-15. Montez had experience with AML/BSA Id. at 24:12-25. After the restructuring and until Id. at 34:5-13. Montez was thus Riggins’s United States District Court For the Northern District of California 10 indirect supervisor. 11 evidence regarding who made the decision to put Montez into this 12 position, and instead state that this was “presumably” done by 13 Dobranski. 14 “impression” that the decision was made by Dobranski. 15 Werner Depo. Tr. 160:22-161:1). 16 Riggins Decl. ¶ 10. Opp. at 16. Plaintiffs do not offer They point out that Werner had the Id. (citing Casissa believed that Montez was not qualified for the job, 17 because Montez did not seem to know basic AML terminology and 18 would ask Casissa questions about AML or BSA issues that others 19 asked of Montez. 20 with Montez, Werner also believed that Montez was not qualified 21 for the position and that “he had less AML experience and 22 understanding than [Casissa] did.” 23 Casissa Decl. ¶ 9. Based on his interactions Werner Depo. Tr. 161:22-162:3. Casissa’s authority decreased after Montez became the Senior 24 Vice President of Risk Management. 25 of contact between First Republic and Merrill Lynch, and later 26 First Republic and Bank of America, for AML purposes and, as a 27 result, Casissa did not participate in various meetings on this 28 topic. Casissa Decl. ¶ 9. Montez became the main point Casissa was not asked for input or to 9 1 review Price Waterhouse Corporation (PWC) “engagement letters for 2 work performed in the AML area,” could not make changes or 3 decisions without consulting Montez and could not file several 4 SARs until he had Montez’s approval. 5 provide evidence that he had participated in these meetings or 6 engaged in these tasks before Montez was hired. 7 February 2009, First Republic retained a consultant who began 8 taking over Casissa’s compliance responsibilities and who was 9 eventually hired as the bank’s compliance officer; Casissa was not Id. Casissa does not In or around United States District Court For the Northern District of California 10 told beforehand about the consultant or that his compliance 11 responsibilities would be reduced. 12 difficulty getting additional staff, which he believed was 13 necessary to conduct his work. 14 that he was able to get staff more easily before Montez was hired 15 or that his workload increased after Montez was hired. 16 Id. Id. Casissa also had Casissa provides no evidence Riggins states that these changes also affected her. 17 Specifically, she states that, because Casissa “no longer had 18 access to information shared” at meetings, she did not get 19 information necessary to perform her job effectively. 20 Decl. ¶ 13. 21 requested to review” the PWC engagement letters and that she could 22 not make changes or decisions without consulting Montez, although 23 there is no evidence that she could do these things independently 24 before he was hired. 25 Riggins She also states that she was “not asked for input or Id. After he became Casissa’s manager, Montez observed, and was 26 told by other employees, that Casissa was disrespectful in his 27 dealings with coworkers and that he did not treat them as equals. 28 Montez Depo. Tr. 35:13-36:14. Montez felt Casissa acted this way 10 1 towards him. 2 performance reviews and in face-to-face conversations. 3 36:15-21. 4 and communication skills. 5 reports that Riggins was unorganized, disrespectful, did not 6 communicate, and lacked process. 7 Id. Montez brought this up with Casissa during his Id. at Montez also believed that Casissa lacked organizational Id. at 37:6-38:12. Montez received Id. at 52:8-53:3. During his time at First Republic, Casissa was given either 8 an outstanding or above average rating for all of his annual 9 performance evaluations. Casissa Decl. ¶ 3. Except for one year United States District Court For the Northern District of California 10 involving budget cuts, he was also given an annual bonus, which 11 averaged thirty to forty percent of his base salary and was based 12 on performance. 13 his performance reviews were prepared by Dobranski. 14 Montez prepared Casissa’s last performance review, which rated him 15 above average. 16 points that Casissa needed to improve his communication skills and 17 teamwork with staff in areas of risk management outside of AML, 18 and cited problems with team management and organization. 19 Ex. A. 20 Id. Id. Until Montez became his supervisor, all of Id. In 2008, In the review, Montez noted at numerous Id., While Riggins worked at First Republic, she received either 21 an outstanding or exceeds expectations rating on all of her annual 22 performance reviews, which were each prepared by Casissa. 23 Decl. ¶ 2. 24 the end of 2008, her overall rating, on a scale of one to five, 25 was “4++.” 26 interpersonal skills with both internal (i.e. Merrill Lynch and 27 external . . . clients” and gives her a 4.5 rating for teamwork. Riggins In her last review, which covered the period through Id., Ex. A. The review notes that she “has great 28 11 1 Id. 2 department head. 3 This review was signed by Casissa and by Dave Montez, as the Id. Casissa states that, prior to his termination, neither Montez 4 nor Dobranski ever told him that his performance with respect to 5 AML or the subpoena process was subpar, or that anyone at Merrill 6 Lynch or Bank of America had concerns about his performance or 7 that of Riggins. 8 never given a verbal or written warning about his performance. 9 Id. Casissa Decl. ¶ 12. He also states that he was United States District Court For the Northern District of California 10 In early May 2009, Bill Fox, the head of the AML/BSA program 11 for Bank of America, called Dobranski and told him that Casissa’s 12 duties would no longer include serving as the AML/BSA officer for 13 First Republic. 14 Fox why, and recalls Fox saying that “we want an adult in that 15 position.” 16 meant by this, but assumed that it meant “that he was being 17 terminated for performance issues.” 18 a follow-up email, Fox also stated that Montez was to take on that 19 role, and that Riggins was to report to an individual in the Bank 20 of America AML program for the analysis and reporting of 21 suspicious activity. 22 no reason to believe that Fox would want to retaliate against him 23 for anything. 24 Dobranski Depo. Tr. 62:22-64:5. Id. at 64:2-5. Dobranski asked Dobranski did not ask Fox what he Id., Ex. 14. Id. at 64:6-12. According to Casissa testified that he had Casissa Depo. Tr. 164:22-25. After Casissa was removed as the AML/BSA officer, Montez 25 decided to terminate both Riggins and Casissa for “very similar” 26 reasons, including “lack of organization, disrespectful, lack of 27 communication, lack of process.” 28 52:3-10. Montez Depo. Tr. 48:16-20, Montez had the option either to terminate Casissa and 12 1 Riggins outright or to include them in a reduction-in-force 2 process that was occurring because of the Bank of America 3 acquisition. 4 reduction-in-force program to help them financially and get them 5 additional benefits that they would not have received had they 6 been otherwise terminated. 7 Id. at 69:17-70:11. He included them in the Id. Riggins and Casissa were informed of their terminations on 8 May 29, 2009. 9 Depo. Tr. 176:21-25. Riggins Decl. ¶ 12; Casissa Decl. ¶ 10; Casissa Each received a termination letter stating United States District Court For the Northern District of California 10 that his or her position was being eliminated as a part of the 11 reorganization resulting from the combining of Bank of America and 12 Merrill Lynch, and that the termination was effective as of July 13 31, 2009. 14 Riggins Decl., Ex. B; Casissa Decl., Ex. B. Plaintiffs bring claims under California law, asserting that 15 Defendant violated California Labor Code section 1102.5(c) and 16 terminated their employment in violation of public policy. 17 LEGAL STANDARD 18 Summary judgment is properly granted when no genuine and 19 disputed issues of material fact remain, and when, viewing the 20 evidence most favorably to the non-moving party, the movant is 21 clearly entitled to prevail as a matter of law. 22 Civil Procedure 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 23 (1986); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 24 (9th Cir. 1987). 25 Federal Rule of The moving party bears the burden of showing that there is no 26 material factual dispute. 27 true the opposing party’s evidence, if supported by affidavits or 28 other evidentiary material. Therefore, the court must regard as Celotex, 477 U.S. at 324; Eisenberg, 13 1 815 F.2d at 1289. 2 in favor of the party against whom summary judgment is sought. 3 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 4 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 5 F.2d 1551, 1558 (9th Cir. 1991). 6 The court must draw all reasonable inferences Material facts which would preclude entry of summary judgment 7 are those which, under applicable substantive law, may affect the 8 outcome of the case. The substantive law will identify which 9 facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. United States District Court For the Northern District of California 10 11 242, 248 (1986). Where the moving party does not bear the burden of proof on 12 an issue at trial, the moving party may discharge its burden of 13 production by either of two methods: 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The moving party may produce evidence negating an essential element of the nonmoving party’s case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial. Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party discharges its burden by showing an absence of evidence to support an essential element of a claim or defense, it is not required to produce evidence showing the absence of a material fact on such issues, or to support its motion with evidence negating the non-moving party’s claim. Id.; see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If the moving party shows an absence of evidence to support the non-moving party’s case, the burden then shifts to the non-moving 14 1 party to produce “specific evidence, through affidavits or 2 admissible discovery material, to show that the dispute exists.” 3 Bhan, 929 F.2d at 1409. 4 If the moving party discharges its burden by negating an 5 essential element of the non-moving party’s claim or defense, it 6 must produce affirmative evidence of such negation. 7 F.3d at 1105. 8 burden then shifts to the non-moving party to produce specific 9 evidence to show that a dispute of material fact exists. United States District Court For the Northern District of California 10 Nissan, 210 If the moving party produces such evidence, the Id. If the moving party does not meet its initial burden of 11 production by either method, the non-moving party is under no 12 obligation to offer any evidence in support of its opposition. 13 Id. 14 ultimate burden of persuasion at trial. 15 This is true even though the non-moving party bears the Id. at 1107. DISCUSSION 16 Defendant moves for summary judgment on the ground that 17 Plaintiffs have not established a prima facie case for retaliation 18 under California Labor Code section 1102.5(c) and that they failed 19 to exhaust their administrative remedies for such a violation. 20 Defendant also argues that the non-disclosure and safe harbor 21 provisions of the Annunzio-Wylie Anti-Money Laundering Act and the 22 Bank Secrecy Act preempt California Labor Code section 1102.5 and 23 provide them with immunity from the charges brought here. 24 I. 25 California Labor Code section 1102.5(c) Defendant argues that, because Plaintiffs did not file an 26 administrative claim with the California Labor Commissioner prior 27 to bringing this lawsuit, their section 1102.5(c) claim is barred 28 for failure to exhaust administrative remedies, pursuant to 15 1 Campbell v. Regents of the Univ. of Cal., 35 Cal. 4th 311 (2005). 2 Plaintiffs respond that Campbell requires only exhaustion of 3 internal agency administrative remedies and does not apply to the 4 instant case. 5 This Court has held previously that the California Supreme 6 Court’s holding in Campbell was not limited to the exhaustion of 7 internal agency administrative remedies. 8 Inv. & Mgmt. Co., 2008 WL 5396361, at *3 (N.D. Cal.) (Wilken, J.); 9 see also Ferretti v. Pfizer Inc., 2012 U.S. Dist. LEXIS 27214, at See Hall v. Apartment United States District Court For the Northern District of California 10 *12-13 (N.D. Cal.) (Koh, J.); Reynolds v. City & County of San 11 Francisco, 2011 U.S. Dist. LEXIS 117230, at *4 (N.D. Cal.) 12 (Seeborg, J.) (“post-Campbell, courts in this district have 13 uniformly held that claims under §1102.5 must first be presented 14 to the Labor Commissioner”). 15 In Hall, this Court explained, “In Campbell, the California 16 Supreme Court discussed whether the well established rule in 17 California jurisprudence of exhaustion of administrative remedies 18 was abrogated in Labor Code § 1102.5.” 19 Campbell, 35 Cal. 4th at 321). 20 legislative history appears unclear on the question of whether the 21 Legislature intended to depart from the exhaustion doctrine’ and 22 concluded that ‘we cannot read that intent into the statute when 23 the history does not clearly support it.’” 24 35 Cal. 4th at 331). 25 exhaust her administrative remedies before bringing suit under 26 § 1102.5.” 27 did not limit its holding to require only the exhaustion of 28 internal administrative remedies.” Id. at *3 (citing “The court held that ‘the Id. (quoting Campbell, “Thus, the court required Campbell to Id. (citing Campbell, 35 Cal. 4th at 332). 16 Id. “The court While the court in 1 Campbell noted that there are certain exceptions to the exhaustion 2 requirement, 35 Cal. 4th at 322, Plaintiffs have not argued, or 3 offered evidence to support, that any of these exceptions apply 4 here. 5 administrative remedies for this claim prior to filing the instant 6 case. 7 Therefore, Plaintiffs were required to exhaust available California Labor Code section 98.7 provided Plaintiffs with 8 an administrative remedy for their claims under section 1102.5(c). 9 See Ferretti, 2012 U.S. Dist. LEXIS 27214, at *12. This section United States District Court For the Northern District of California 10 provides, “Any person who believes that he or she has been 11 discharged or otherwise discriminated against in violation of any 12 law under the jurisdiction of the Labor Commissioner may file a 13 complaint with the division within six months after the occurrence 14 of the violation.” 15 six-month period may be extended for good cause.” 16 California Labor Code § 98.7(a). “The Id. Plaintiffs do not dispute that they failed to file an 17 administrative claim with the Labor Commissioner within six months 18 after their termination or at any other time prior to bringing 19 suit. 20 for failure to exhaust administrative remedies. 21 Thus, Plaintiffs’ California Labor Code claims are barred The Court also finds that Plaintiffs have failed to establish 22 a prima facie case under California Labor Code section 1102.5(c). 23 This section forbids an employer from taking retaliatory action 24 against an employee for “refusing to participate in an activity 25 that would result in a violation of state or federal statute, or a 26 violation or noncompliance with a state or federal rule or 27 regulation.” 28 intended “to protect employees who refuse to act at the direction In enacting the statute, the California Legislature 17 1 of their employer or refuse to participate in activities of an 2 employer that would result in a violation of law.” 3 22, 2003, ch. 484, § 1, 2003 Cal. Legis. Serv. 484. Act of Sep. 4 To establish a prima facie case under section 1102.5, 5 Plaintiffs must offer proof that (1) they engaged in a protected 6 activity, (2) Defendant subjected them to adverse employment 7 actions and (3) there is a causal link between the two. 8 County of Orange, 157 Cal. App. 4th 121, 138 (2007). 9 Mokler v. If Plaintiffs establish a prima facie case, the burden then United States District Court For the Northern District of California 10 shifts to Defendant to offer a legitimate, non-discriminatory 11 reason for the adverse employment action. 12 Defendant makes such a showing, the burden shifts back to 13 Plaintiffs to prove Defendant’s proffered reasons for termination 14 are pretextual. 15 persuading the court that a discriminatory reason more likely 16 motivated the employer or indirectly by showing that the 17 employer’s proffered explanation is unworthy of credence.” 18 (internal quotation marks and formatting omitted). 19 Id. Id. at 140. If They may do this “either directly by Id. Plaintiffs have failed to raise a dispute of material fact 20 that they engaged in protected activity. 21 offered evidence that following Dobranski’s directions not to do 22 anything in response to the news article or the subpoena would 23 have resulted in a violation of federal banking laws. 24 regulations require that every bank file “a report of any 25 suspicious transaction relevant to a possible violation of law or 26 regulation.” 27 § 353.3(a)(2) (requiring a report whenever “the bank detects any 28 known or suspected federal criminal violation, or pattern of 31 C.F.R. § 103.18(a)(1). 18 Plaintiffs have not Federal See also 12 C.F.R. 1 criminal violations . . . involving a transaction or transactions 2 conducted through the bank, and involving or aggregating $5,000 or 3 more in funds or other assets, where the bank believes it was 4 . . . used to facilitate a criminal transaction, and the bank has 5 a substantial basis for identifying a possible suspect or group of 6 suspects”). 7 Council (FFIEC)5 states that the “decision to file a SAR is an 8 inherently subjective judgment,” and that “the bank should not be 9 criticized for the failure to file a SAR unless the failure is The Federal Financial Institutions Examination United States District Court For the Northern District of California 10 significant or accompanied by evidence of bad faith.” 11 Institutions Examination Council, Bank Secrecy Act/Anti-Money 12 Laundering Examination Manual 75-76 (2010),6 available at 13 http://www.ffiec.gov/bsa_aml_infobase/documents/BSA_AML_Man_2010. 14 pdf. 15 violation of the SAR regulations, and will take appropriate 16 supervisory action, if the organization’s failure to file a SAR 17 (or SARs) evidences a systemic breakdown in its policies, 18 procedures, or processes to identify and research suspicious 19 activity, involves a pattern or practice of noncompliance with the 20 filing requirement, or represents a significant or egregious 21 situation.”). Fed. Fin. See also id., Appendix R, R-6 (“The Agencies will cite a 22 23 24 25 26 27 28 5 The FFIEC is an interagency body established by Congress and charged with “establish[ing] uniform principles and standards and report forms for the examination of financial institutions which shall be applied by the Federal financial institutions regulatory agencies.” 12 U.S.C. § 3305(a). 6 Defendant requests, and Plaintiffs do not oppose, that the Court take judicial notice of this document, which Plaintiffs cite in their 2AC. The Court grants Defendant’s request. 19 1 In the first incident, involving Does One and Two, Plaintiffs 2 cite a news article, which suggested that two of Defendant’s 3 customers were involved in an unlawful “Ponzi” scheme that may 4 have implicated funds obtained through a loan held by Defendant. 5 The evidence in the record supports that Plaintiffs and Dobranski 6 had a different opinion as to whether, under the circumstances, a 7 SAR was warranted. 8 Dobranski did not act in good faith, that failure to file a SAR 9 would be significant or egregious, that such failure would Plaintiffs offer no evidence establishing that United States District Court For the Northern District of California 10 represent a systemic breakdown in the bank’s policies, procedures, 11 or processes to identify and research suspicious activity, that 12 there was a pattern or practice of noncompliance with the filing 13 requirement, or that a SAR was required by law in this instance, 14 based only on the news report. 15 In the second incident, involving Doe Three, Plaintiffs also 16 offer no such evidence. 17 Plaintiffs ever proposed the filing of a SAR in relation to this 18 incident with Dobranski. 19 about” the subpoena and to take no action on it appears related to 20 the fact that someone other than Casissa and Riggins had the 21 responsibility to collect and return documents in response to the 22 subpoena, not that Casissa was to violate the law. 23 supported by the fact that First Republic was already conducting 24 an investigation into Doe Three. 25 have no evidence that Dobranski deliberately kept the subpoena 26 from them. 27 done differently had Dobranski told him of the subpoena earlier or 28 given him a different direction; the only action he normally would The evidence does not establish that Dobranski’s direction “not to worry This is Plaintiffs acknowledge that they Further, Casissa identified nothing that he would have 20 1 take in response to a subpoena was to initiate an investigation 2 and, in this instance, one was already ongoing. 3 Plaintiffs have also failed to raise a material factual 4 dispute regarding a causal link between their purportedly 5 protected activities and any adverse employment actions. 6 establish causation, Plaintiffs state that “defendant implemented 7 a series of retaliatory acts soon after plaintiffs engaged in 8 protected activities.” 9 proximity to raise an inference of causation. Opp. at 18. To They rely on temporal Plaintiffs contend United States District Court For the Northern District of California 10 that the adverse employment actions began when Dobranski put 11 Montez in place as Casissa’s direct supervisor, to “engage[] in a 12 plan to effect Montez as a buffer between him and plaintiffs,” 13 which culminated when Casissa and Riggins were terminated. 14 However, as previously noted, Plaintiffs offer no evidence that 15 Dobranski decided to make Montez Casissa’s supervisor. 16 the other purported adverse actions, such as Plaintiffs having to 17 consult with Montez before making decisions or not participating 18 in certain meetings, are the result of Montez’s position as 19 Casissa’s supervisor, not a separate adverse action. 20 there is no evidence that Plaintiffs could do these things without 21 supervision before Montez took that position. 22 adverse actions--the retention of a consultant who took on 23 Casissa’s compliance responsibilities in February 2009, and the 24 termination of Riggins and Casissa in May 2009--are too temporally 25 distant from the purportedly protected actions in October 2007 and 26 March 2008 to create an inference of retaliatory causation on 27 their own. 28 802 (9th Cir. 2003) (explaining that lapse of nine months defeated Id. Several of Further, The remaining See, e.g., Manatt v. Bank of Am., NA, 339 F.3d 792, 21 1 inference of retaliatory causation); see also Clark County Sch. 2 Dist. v. Breeden, 532 U.S. 268, 273 (2001) (stating that temporal 3 proximity between protected activity and adverse action must be 4 “very close” to support inference of causation). 5 Accordingly, the Court GRANTS Defendant’s motion for summary 6 judgment on Plaintiffs’ first cause of action. 7 II. 8 9 Wrongful Termination in Violation of Public Policy Under California law, an employee may maintain a tort cause of action against his or her employer when the employer’s United States District Court For the Northern District of California 10 discharge of the employee contravenes fundamental public policy. 11 Foley v. Interactive Data Corp., 47 Cal. 3d 654, 666 (1988). 12 claims are often referred to as Tameny claims, after the decision 13 in Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167, 176-177 14 (1980). 15 policy must be based on a fundamental policy established by a 16 constitutional, statutory or regulatory provision. 17 Eng’g Co., 19 Cal. 4th 66, 76, 90 (1998). 18 Such A claim for wrongful termination in violation of public Green v. Ralee To the extent that Plaintiffs’ Tameny causes of action rest 19 on the fundamental policy established by section 1102.5(c), these 20 claims fail for the same reasons that Plaintiffs have failed to 21 establish a prima facie case for violations of this section. 22 At the hearing, Plaintiffs argued for the first time that 23 their Tameny claims are based on the public policy set forth in 24 the Bank Secrecy Act and not only on section 1102.5(c). 25 Plaintiffs did not base this claim on any federal law in their 26 complaint. 27 “constitutes the termination of plaintiff’s employment in 28 violation of the public policies, laws, and statutes of the State However, See 2AC ¶ 42 (alleging that Defendant’s conduct 22 1 of California and California Labor Code § 1102.5(c)”). 2 Court’s prior order denying Defendant’s motion to dismiss the 2AC 3 also allowed the Tameny claims to proceed only “to the extent that 4 they implicate the same conduct that supports their claim under 5 1102.5(c).” 6 basis for their Tameny claims at this late stage would unduly 7 prejudice Defendant, which has litigated this case with the 8 understanding that these claims were based on the alleged section 9 1102.5(c) violation. Docket No. 41, 8. The To allow Plaintiffs to add a new Plaintiffs have offered no explanation for United States District Court For the Northern District of California 10 their failure to allege this theory at any earlier point in this 11 litigation. 12 13 Accordingly, the Court GRANTS Defendant’s motion for summary judgment on Plaintiffs’ second cause of action. 14 15 CONCLUSION For the reasons set forth above, the Court GRANTS Defendant’s 16 motion for summary judgment (Docket No. 119). 17 grants Defendant’s motion in its entirety on other grounds, the 18 Court does not reach its argument that the non-disclosure and safe 19 harbor provisions of the Annunzio-Wylie Anti-Money Laundering Act 20 and the Bank Secrecy Act preempt California Labor Code section 21 1102.5 and provide it with immunity. 22 23 24 Because the Court The Clerk shall enter judgment and close the file. Defendant shall recover its costs from Plaintiffs. IT IS SO ORDERED. 25 26 27 Dated: 7/24/2012 CLAUDIA WILKEN United States District Judge 28 23

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