Leung v. Federal Deposit Insurance Corporation et al, No. 5:2024cv00337 - Document 92 (N.D. Cal. 2024)

Court Description: ORDER GRANTING IN PART AND DENYING IN PART 32 46 51 MOTIONS TO DISMISS. Signed by Judge Beth Labson Freeman on 7/29/24. (blflc2, COURT STAFF) (Filed on 7/29/2024)

Download PDF

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SHIRLEY JANE LEUNG, Case No. 24-cv-00337-BLF Plaintiff, 8 v. 9 10 FEDERAL DEPOSIT INSURANCE CORPORATION, et al., 11 ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO DISMISS [Re: ECF No. 32, 46, 51] United States District Court Northern District of California Defendants. 12 Plaintiff Shirley Jane Leung alleges that, while she worked for Silicon Valley Bank 13 14 (“SVB”), she repeatedly alerted senior executives to SVB’s systemic failures to manage client 15 portfolios and to potential fraud in an ongoing audit, and she was laid off for her efforts. ECF No. 16 1 (“Compl.”) ¶¶ 1–2. She brought this lawsuit against the Federal Deposit Insurance Corporation, 17 acting in its capacity as receiver for SVB (“FDIC-R”)1; First Citizens Bank & Trust Co. (“FCB”); 18 SVB Investment Services, Inc.; SVB Wealth, LLC; Greg Becker; and John Longley. Id. ¶¶ 10–16. 19 Before the Court are three motions to dismiss: one motion brought by FCB, SVB 20 Investment Services, Inc., and SVB Wealth, LLC (collectively “FCB Defendants”), ECF No. 32 21 (“FCB Mot.”); one motion brought by John Longley, ECF No. 46-1 (“Longley Mot.”); and one 22 motion brought by Greg Becker, ECF No. 51 (“Becker Mot.”). Plaintiff opposes the motions. See 23 ECF No. 37 (“Opp. to FCB”); ECF No. 59 (“Opp. to Becker”); ECF No. 60 (“Opp. to Longley”). 24 The FCB Defendants, Becker, and Longley filed replies. See ECF No. 39 (“FCB Reply”); ECF 25 26 27 28 1 Plaintiff originally identified the FDIC and SVB as Defendants. See Compl. ¶¶ 10–11. On May 6, 2024, the FDIC-R substituted in place and stead of the FDIC and SVB because the FDIC-R succeeded to SVB’s rights, titles, powers, privileges, assets, books, and records and because Plaintiff erroneously sued the FDIC in its corporate capacity (“FDIC-C”), which is a legally distinct capacity from the FDIC-R. ECF No. 53. 1 No. 67 (“Becker Reply”); ECF No. 68 (“Longley Reply”). The Court held a hearing on the 2 motions on July 11, 2024. ECF No. 85. For the reasons stated below, the Court GRANTS IN PART and DENIES IN PART the 3 4 5 6 United States District Court Northern District of California 7 motions. I. BACKGROUND For purposes of this motion, the Court accepts the well-pleaded facts in Plaintiff’s complaint as true. See Compl. 8 Plaintiff joined SVB in 2020 and worked in the SVB division known as SVB Private. 9 Compl. ¶ 9. Plaintiff also had oversight over SVB Investment Services, SVB’s broker-dealer 10 platform. Id. Defendant FDIC-R was appointed as SVB’s receiver upon the bank’s failure and 11 succeeded to all of the failed bank’s rights, titles, powers, privileges, assets, books, and records, 12 including SVB’s interest and status as a Defendant in this action. ECF No. 53 ¶¶ 1–2. Defendant 13 FCB is a North Carolina state-charted commercial bank that “purchased SVB’s assets and 14 liabilities from” the FDIC-R. Compl. ¶ 14. Defendants SVB Investment Services, Inc. and SVB 15 Wealth, LLC were divisions of SVB and are now wholly owned subsidiaries of FCB. Id. ¶¶ 12– 16 13. Defendant Greg Becker was the Chief Executive Officer (“CEO”) of SVB and SVB Financial 17 Group. Id. ¶ 15. Defendant John Longley was the SVB Head of Private Bank, Wealth & Trust; 18 Interim Head of SVB Private; and Leung’s immediate supervisor. Id. ¶ 16. 19 Beginning in August 2022, Plaintiff began to alert senior executives “to SVB’s systemic 20 failures to manage client portfolios and to potential fraud in an ongoing audit, as well as other 21 issues.” Compl. ¶¶ 2, 17. In August 2022, Plaintiff alerted SVB Private’s Senior Counsel, Ajay 22 Kattel, and SVB’s Deputy Chief Compliance Officer, Jillana Downing, to problems with SVB’s 23 weak compliance culture following its acquisition of Boston Private. Id. ¶ 17. In summer and fall 24 of 2022, Plaintiff also provided SVB Private’s outside counsel, Ghillaine Reid, detailed emails and 25 files pertaining to Plaintiff’s concerns about SVB’s compliance culture. Id. ¶ 18. In October 26 2022, Plaintiff began reporting to Longley on a regular basis. Id. ¶ 20. In doing so, Plaintiff 27 consistently warned Longley of potential violations of fiduciary duties to clients, including 28 inadequate processes and technology to manage customer investment portfolios and poor risk 2 United States District Court Northern District of California 1 management processes and issue escalation within the investment and trading teams. Id. Plaintiff 2 also informed internal and external counsel of these violations. Id. On October 19, 2022, Plaintiff 3 flew from Los Angeles to San Francisco to meet with Longley and reiterate her concerns. Id. 4 ¶¶ 21–22. In a December 2022 meeting, Plaintiff repeated her concerns to Deputy General 5 Counsel, Chester Te. Id. ¶ 23. On December 14, 2022, Plaintiff emailed Longley to emphasize 6 that the problems she identified were not simply operational, technological, or integration related, 7 and that SVB’s culture encouraged non-compliant behavior. Id. ¶ 24. Plaintiff also told Longley 8 that client accounts could not be viewed properly and were potentially mismanaged. Id. On 9 January 6, 2023, Plaintiff again warned Longley that SVB was not upholding its fiduciary duties 10 and obligations to clients and that these failures created a risk that SVB might be shut down. Id. 11 ¶ 26. 12 On January 18, 2023, Plaintiff attended a monthly Risk Review Meeting, during which she 13 raised concerns regarding delays in addressing issues with trust accounts from Boston Private. 14 Compl. ¶ 27. Plaintiff reported to the Chief Compliance Officer and internal counsel about 15 misrepresentations in the compliance manual regarding monitoring and the responsibility to 16 manage client portfolios against risk objectives, among other things. Id. ¶ 28. Around January 17 2023, on a Registered Investment Advisor Compliance Questionnaire, Plaintiff declined to certify 18 that there were no violations of SVB’s manual relative to its actual practice. Id. ¶ 29. Plaintiff 19 also informed internal counsel that there were violations of SVB’s Code of Conduct that might 20 require disclosure. Id. On February 7, 2023, Plaintiff told SVB Private’s Senior Counsel that she 21 had received information indicating that SVB Private’s Chief Investment Officer had directed her 22 team to amend process and procedure documents to ensure that an audit would pass and to obscure 23 the mishandling of accounts. Id. ¶ 30. Plaintiff also emailed Longley, urging him to speak with 24 other members of the investment operations and solutions teams that were raising concerns. Id. 25 On February 14, 2023, Plaintiff again spoke to SVB Private’s Senior Counsel and expressed her 26 concerns over the lack of integrity, tendency to ignore or hide difficult issues, and the apparent 27 plans to manipulate the audit. Id. ¶ 31. 28 On February 16, 2023, Plaintiff was laid off during a Zoom call with Human Resources 3 1 Director Linda Spearman-Scott and Longley. Compl. ¶ 32. Becker approved Plaintiff’s layoff. 2 Id. On February 17, 2023, Leung received a severance agreement, which reflected that her 3 Separation Date was March 17, 2023. Id. ¶ 38. On March 10, 2023, SVB closed and was taken 4 into receivership by the FDIC-R. See id. ¶ 39. On March 13, 2023, the FDIC-R transferred 5 substantially all assets and certain liabilities to Silicon Valley Bridge Bank, N.A. (“SVBB”). Id. 6 ¶ 40. The FDIC-R retained SVB’s liabilities under Section 2.02 of the Transfer Agreement 7 between the FDIC-R and SVBB. Id. On March 27, 2023, the FDIC-R entered into a Purchase and Assumption Agreement United States District Court Northern District of California 8 9 (“P&A Agreement”) for SVBB with FCB. Compl. ¶ 42. The transaction made SVB Investment 10 Services, Inc. and SVB Wealth, LLC wholly owned subsidiaries of FCB. Id. FCB represented to 11 SVB’s former clients that SVB’s services would continue as before. Id. ¶ 45. A substantial 12 number of SVB employees also became employees of FCB and undertook the same or similar jobs 13 under similar conditions and in the same locations as they had worked when SVB was their 14 employer. Id. ¶¶ 46–48. After exhausting her administrative remedies, Leung filed this lawsuit. See Compl. ¶¶ 49– 15 16 50. The complaint brings the following causes of action: (1) retaliation in violation of the 17 Sarbanes-Oxley Act (“SOX”), id. ¶¶ 53–60; (2) retaliation in violation of California Labor Code 18 § 1102.5(b), id. ¶¶ 61–68; (3) termination in violation of public policy, id. ¶¶ 69–74; (4) retaliation 19 in violation of California Labor Code § 232.5, id. ¶¶ 75–81; (5) intentional interference with 20 prospective economic relations, id. ¶¶ 82–85. Count 1 is brought against all Defendants; Counts 21 2–4 are brought against the FDIC-R and the FCB Defendants; and Count 5 is brought against 22 Longley and Becker. The FDIC-R answered, ECF No. 55, and all remaining Defendants have filed motions to 23 24 25 26 dismiss. See FCB Mot.; Becker Mot.; Longley Mot. II. LEGAL STANDARD “A Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 27 claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 28 Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 4 United States District Court Northern District of California 1 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts 2 as true all well-pled factual allegations and construes them in the light most favorable to the 3 plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the 4 Court need not “accept as true allegations that contradict matters properly subject to judicial 5 notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or 6 unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) 7 (internal quotation marks and citations omitted). While a complaint need not contain detailed 8 factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to 9 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 10 Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the 11 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In deciding whether to grant leave to amend, the Court must consider the factors set forth 12 13 by the Supreme Court in Foman v. Davis, 371 U.S. 178 (1962), and discussed at length by the 14 Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003). A district 15 court ordinarily must grant leave to amend unless one or more of the Foman factors is present: 16 (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by 17 amendment, (4) undue prejudice to the opposing party, or (5) futility of amendment. Eminence 18 Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the opposing party that carries 19 the greatest weight.” Id. However, a strong showing with respect to one of the other factors may 20 warrant denial of leave to amend. Id. 21 III. 22 REQUEST FOR JUDICIAL NOTICE A court generally cannot consider materials outside the pleadings on a motion to dismiss 23 for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). A court may, however, consider items of 24 which it can take judicial notice without converting the motion to dismiss into one for summary 25 judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). A court may take judicial notice 26 of facts “not subject to reasonable dispute” because they are either “(1) generally known within 27 the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by 28 resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201. A court 5 1 may additionally take judicial notice of “‘matters of public record’ without converting a Motion to 2 Dismiss into a motion for summary judgment.” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th 3 Cir. 2001) (quoting MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)). Under 4 the incorporation by reference doctrine, courts may consider documents “whose contents are 5 alleged in a complaint and whose authenticity no party questions, but which are not physically 6 attached to the [plaintiff’s] pleading.” In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 7 (9th Cir. 1999) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)) (alteration in 8 original). United States District Court Northern District of California 9 The FCB Defendants request that the Court take judicial notice of the Transfer Agreement 10 between the FDIC-R and SVBB (“Transfer Agreement”) and the Purchase and Assumption 11 Agreement between the FDIC-R and FCB (“P&A Agreement”) because they are public documents 12 available on the FDIC’s website and incorporated by reference in Plaintiff’s Complaint. ECF No. 13 32-1 (“RJN”) at 2; FCB Mot. at 8. Plaintiff opposes the request, arguing that the Transfer 14 Agreement and P&A Agreement are not public documents because only redacted versions are 15 publicly available and that her Complaint does not incorporate the Transfer Agreement and P&A 16 Agreement because the Complaint merely references the Transfer Agreement. Opp. to FCB at 3–5 17 & n.1. In reply, the FCB Defendants note that the relevant portions of the Transfer Agreement and 18 P&A Agreement are publicly available. FCB Reply at 7–8. 19 The Court will consider the Transfer Agreement and P&A Agreement because both 20 documents are judicially noticeable as matters of public record not subject to reasonable dispute 21 and because these documents are incorporated by reference in Plaintiff’s Complaint. First, the 22 Transfer Agreement and P&A Agreement are government records that are available on the FDIC’s 23 website. As such, they are matters of public record and not subject to reasonable dispute. See 24 First-Citizens Bank & Tr. Co. v. HSBC Holdings plc, No. 23-CV-02483-LB, 2024 WL 115933, at 25 *3 (N.D. Cal. Jan. 10, 2024) (taking judicial notice of the Transfer Agreement and the P&A 26 Agreement); United States v. Venture One Mortg. Corp., No. 13-CV-1872 W (JLB), 2016 WL 27 4768875, at *3 (S.D. Cal. June 10, 2016) (taking judicial notice of an FDIC purchase agreement 28 because it is a government record available on the FDIC’s website); McCann v. Quality Loan 6 1 Serv. Corp., 729 F.Supp.2d 1238, 1241 (W.D. Wash. 2010) (taking judicial notice of an FDIC 2 purchase agreement because it is a public record). To the extent that Plaintiff argues that the Court 3 should not take judicial notice of these documents because the versions published on the FDIC’s 4 website are redacted, this argument is unavailing because Plaintiff points to redacted portions that 5 are irrelevant to this motion—the FCB Defendants rely only on publicly available portions of the 6 Transfer Agreement and P&A Agreement. Second, the Court will consider the Transfer Agreement and P&A Agreement as United States District Court Northern District of California 7 8 incorporated by reference in the Complaint. A document “may be incorporated by reference into a 9 complaint if the plaintiff refers extensively to the document or the document forms the basis of the 10 plaintiff’s claim.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). “[A] court may 11 consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the 12 document; (2) the document is central to the plaintiff’s claim; and (3) no party questions the 13 authenticity of the copy attached to the 12(b)(6) motion.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 14 F.3d 992, 998 (9th Cir. 2010). The Court finds that the Transfer Agreement and P&A Agreement 15 form the basis of Plaintiff’s claims. The Complaint refers to the Transfer Agreement at ¶ 40 and 16 the Purchase Agreement at ¶ 42. Importantly, both Agreements are necessary conditions for 17 Plaintiff to bring her claims against the FDIC-R and the FCB Defendants. Plaintiff alleges that the 18 FDIC-R and the FCB Defendants are successors-in-interest to SVB, and the basis for such an 19 allegation and any alleged liability for Plaintiff’s claims is the assumption of SVB’s liability by 20 the FDIC-R pursuant to the Transfer Agreement and the assumption of liability by FCB under the 21 P&A Agreement. Compl. ¶ 44. Finally, no party has questioned the authenticity of the copies of 22 the Transfer Agreement and P&A Agreement attached to the FCB Defendants’ request for judicial 23 notice. Accordingly, the FCB Defendants’ request for judicial notice (ECF No. 32-1) is 24 25 GRANTED. 26 IV. DISCUSSION The FCB Defendants’ Motion 27 A. 28 The FCB Defendants argue that Plaintiff’s claims against them should be dismissed 7 1 because FCB did not assume any of SVB’s liabilities that would pertain to Plaintiff’s claims. FCB 2 Mot. at 8–11. The FCB Defendants point to the Transfer Agreement between the FDIC-R and 3 SVBB, which agreed that “claims or litigation” would be retained by the FDIC-R and not 4 transferred to SVBB, and the P&A Agreement that transferred certain SVBB assets to FCB, which 5 expressly identified the liabilities that FCB assumed. Id. at 10. Plaintiff argues that FCB’s 6 assumption of liability for “the Failed Bank Records,” includes the assumption of liability for her 7 claims. Opp. to FCB at 1–2. Plaintiff also argues that FCB is liable under principles of successor 8 liability under federal common law and California law. Id. at 5–12. United States District Court Northern District of California 9 Under the Federal Deposit Insurance Act, the FDIC may accept appointment as a receiver 10 for any closed insured depository institution. See 12 U.S.C. § 1821(c). As receiver, the FDIC 11 “succeed[s] to—all rights, titles, powers, and privileges of the insured depository institution” and 12 may “take over the assets of and operate the insured depository institution.” Id. 13 § 1821(d)(1)(A)(i), (B)(i). “The FDIC as receiver ‘steps into the shoes’ of the failed [financial 14 institution]” and operates as its successor. O’Melveny & Myers v. F.D.I.C., 512 U.S. 79, 86 15 (1994) (citation omitted). “The FDIC also ha[s] broad powers to allocate assets and liabilities in 16 order to effect a P & A Agreement.” W. Park Assocs. v. Butterfield Sav. & Loan Ass’n, 60 F.3d 17 1452, 1459 (9th Cir. 1995). “Absent an express transfer of liability, no liability is transferred from 18 a failed bank to an assuming bank.” Mobine v. OneWest Bank, FSB, No. 11-CV-2550-IEG BGS, 19 2012 WL 243351, at *4 (S.D. Cal. Jan. 24, 2012); see also Kennedy v. Mainland Sav. Ass’n, 41 20 F.3d 986, 990 (5th Cir. 1994) (“The purchaser of an asset from a failed institution is not liable for 21 the conduct of the receiver or [failed] institution unless the liability is transferred and assumed.” 22 (alteration in original) (quoting Nashville Lodging, Inc. v. RTC, 839 F.Supp. 58, 62 23 (D.D.C.1993))); Payne v. Sec. Sav. & Loan Ass’n, F.A., 924 F.2d 109, 111 (7th Cir. 1991) (noting 24 that, under the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), all 25 liabilities remain the responsibility of the Resolution Trust Corporation (“RTC”) unless RTC 26 expressly transferred a liability and an assuming thrift institution expressly assumed that liability). 27 “The reason for this rule is clear—‘an assuming bank would rarely be inclined to enter a P & A 28 agreement with the FDIC knowing that it could be taking on unidentified liabilities of undefined 8 1 dimensions that could arise at some uncertain date in the future.’” Williams v. F.D.I.C., No. CIV 2 2:07-2418 WBS GGH, 2009 WL 5199237, at *5 (E.D. Cal. Dec. 23, 2009) (quoting Vill. of 3 Oakwood v. State Bank & Tr. Co., 519 F.Supp.2d 730, 738 (N.D. Ohio 2007), aff’d, 539 F.3d 373 4 (6th Cir. 2008)); see also Vernon v. Resol. Tr. Corp., 907 F.2d 1101, 1109 (11th Cir. 1990) 5 (“Undoubtedly very few, if any, banks would enter into purchase and assumption agreements with 6 a federal receiver if the successor banks had to assume the latent claims of unknown magnitude of 7 shareholders like appellants.”). 8 9 10 United States District Court Northern District of California 11 12 13 14 The Court finds that the Transfer Agreement and P&A Agreement are clear that FCB did not assume SVB’s liability for Plaintiff’s claims. The Transfer Agreement states that the FDIC-R expressly retained liability for any (A) Claims or Litigation related to (1) the Retained Assets or any other asset, liability or obligation not assumed by the Bridge Bank pursuant to this Agreement, (2) the Receiver’s exercise of any of its statutory powers and rights, or (3) this Agreement; and (B) Litigation to the extent that either the Receiver or the Failed Bank is a defendant or defending a claim or counter-claim. 15 RJN Ex. 1 art. 2, § 2.02(b)(i). Under the P&A Agreement, FCB expressly assumed a list of 16 certain liabilities that does not include Plaintiff’s claims or any employment claims of the type 17 being asserted by Plaintiff. See RJN Ex. 2 art. II, § 2.1. The P&A Agreement also states which 18 liabilities were not assumed by FCB: 19 20 21 22 23 Except for the Liabilities Assumed expressly set forth above, the Assuming Institution shall not assume any claims, debts, obligations or liabilities (whether known or unknown, contingent or unasserted, matured or unmatured), however they may be characterized, that the Failed Bank has, or may now or in the future have . . . . Id. § 2.2. Plaintiff’s claims arise from employment actions taken by SVB and its employees prior to the FDIC-R’s appointment as receiver and FCB’s purchase of certain assets of the failed bank. 24 See Compl. ¶¶ 17–33 (describing events from August 2022 to February 2023); id. ¶¶ 39–42 25 (noting that SVB was taken into receivership on March 10, 2023, its assets were transferred to 26 SVBB on March 13, 2023, and FCB and the FDIC-R entered into the P&A Agreement on March 27 27, 2023). Thus, Plaintiff’s claims clearly fall under the litigation claims retained by the FDIC-R 28 9 United States District Court Northern District of California 1 under § 2.02 of the Transfer Agreement. Indeed, Plaintiff alleges this in her Complaint as the 2 basis for the FDIC-R’s retention of SVB’s liabilities. See Compl. ¶ 40. However, the language of 3 the P&A Agreement is clear that the FDIC-R did not expressly transfer liability for Plaintiff’s 4 claims to FCB, nor did FCB expressly assume any such liability. Absent an express assumption of 5 liability for Plaintiff’s claims, she cannot bring her claims against the FCB Defendants. See 6 Mobine, 2012 WL 243351, at *4 (“Courts have uniformly held that absent an express transfer of 7 liability, no liability is transferred from a failed bank to an assuming bank.”); Williams, 2009 WL 8 5199237, at *5 (“[G]iven that no section of the P & A Agreement explicitly transfers liability for 9 claims related to Washington Mutual’s credit card business to Chase, any liability for such claims 10 remained with the FDIC receiver.”); In re Shirk, 437 B.R. 592, 600 (Bankr. S.D. Ohio 2010) 11 (“The FDIC has the power ‘to sell an asset . . . while retaining a related liability, and no liability is 12 transferred to an assuming institution . . . absent an express transfer.” (quoting Vill. of Oakwood, 13 519 F.Supp.2d at 739)). 14 Plaintiff’s arguments to the contrary are unavailing. First, Plaintiff argues that FCB 15 assumed liability for her claims because FCB expressly assumed liability for “Failed Bank 16 Records.” Opp. to FCB at 1–2. Under the P&A Agreement, FCB expressly assumed liability for 17 “duties and obligations assumed pursuant to this Agreement including those relating to the Failed 18 Bank Records.” RJN Ex. 2 art. II, § 2.1(i). “‘Failed Bank Records’ means records as defined in 19 12 C.F.R. § 360.11(a)(3).” Id. art. 1. Section 360.11(a)(3)(i) lists examples of records, including 20 “employee and employee benefits information.” The duties and obligations assumed pursuant to 21 the P&A Agreement relating to Failed Bank Records are described in Article VI, which sets terms 22 for the ownership of, custody of, and access to SVB’s records. RJN Ex. 2 art. VI, §§ 6.1, 6.3, 6.4. 23 The Court finds that the relevant language in § 2.1(i) of the P&A Agreement is not 24 ambiguous, and Plaintiff’s interpretation of that language is unreasonable. The P&A Agreement 25 states that it is governed by federal law, and in the absence of controlling federal law, in 26 accordance with the law of the state in which the main office of the Failed Bank is located. See 27 RJN Ex. 2, art. XIII, § 13.9. There is no federal law governing contracts, so the interpretation of 28 the P&A Agreement is controlled by California law, where SVB’s main office was located. See 10 United States District Court Northern District of California 1 Compl. ¶ 11 (noting that SVB was headquartered in Santa Clara, California). Under California 2 law, “[t]he fundamental goal of contractual interpretation is to give effect to the mutual intention 3 of the parties. . . . If contractual language is clear and explicit, it governs.” Apex Sols., Inc. v. Falls 4 Lake Ins. Mgmt. Co., 100 Cal.App.5th 1249, 1257 (2024) (internal quotation marks and citations 5 omitted) (quoting Pep Boys Manny Moe & Jack of California v. Old Republic Ins. Co., 98 6 Cal.App.5th 329, 335 (2023)). “When a dispute arises over the meaning of contract language, the 7 first question to be decided is whether the language is ‘reasonably susceptible’ to the interpretation 8 urged by the party. If it is not, the case is over.” Mondragon v. Sunrun Inc., 101 Cal.App.5th 592, 9 612 (2024) (quoting Horath v. Hess, 225 Cal.App.4th 456, 464 (2014)). 10 Plaintiff interprets “relating to Failed Bank Records” to be an assumption of liability for 11 any claim about which SVB kept records. She argues that because SVB must have made some 12 internal assessment of her claims in terminating her and calculating and offering her a severance 13 package, any such assessment would have been written down and included in SVB’s records. 14 Opp. to FCB at 2. Thus, Plaintiff argues that FCB must have assumed liability for her claims 15 because it assumed liability for Failed Bank Records. This interpretation is implausible because it 16 contrary to the clear language of the P&A Agreement, under which FCB did not assume liability 17 for any claims relating to Failed Bank Records, but rather for specific “duties and obligations 18 assumed pursuant to this Agreement including those relating to the Failed Bank Records.” RJN 19 Ex. 2 art. II, § 2.1(i) (emphasis added); see also RJN Ex. 2 art. VI, §§ 6.1, 6.3, 6.4 (identifying the 20 duties and obligations relating to Failed Bank Records assumed by FCB); Another Planet Ent., 21 LLC v. Vigilant Ins. Co., 15 Cal.5th 1106 (2024) (“[L]anguage in a contract must be interpreted as 22 a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the 23 abstract. Courts will not strain to create an ambiguity where none exists.” (quoting Waller v. 24 Truck Ins. Exchange, Inc., 11 Cal.4th 1, 18–19 (1995))). Plaintiff’s claim does not fall under any 25 of FCB’s duties and obligations relating to Failed Bank Records because her claim has nothing to 26 do with the ownership of, custody of, or access to SVB’s records. See RJN Ex. 2 art. VI, §§ 6.1, 27 6.3, 6.4. Instead, Plaintiff’s claims arise out of SVB’s and its employees’ actions relating to her 28 employment. Thus, Plaintiff’s claims do not fall under FCB’s assumption of liability for “duties 11 1 and obligations assumed pursuant to this Agreement including those relating to the Failed Bank 2 Records,” RJN Ex. 2 art. II, § 2.1(i), but rather under the provision of the P&A Agreement 3 expressly disclaiming an assumption of liability, see id. § 2.2. To the extent that Plaintiff believes 4 that “evidence of [her] protected activity is plausibly among these records,” then she may seek to 5 receive this evidence during discovery. The fact that the FCB Defendants may hold such records 6 does not, as Plaintiff erroneously suggests, make the FCB Defendants liable for her claims. United States District Court Northern District of California 7 Second, Plaintiff argues that the FCB Defendants are liable for her claims under principles 8 of successor liability. Opp. to FCB at 5–12. However, Plaintiff offers no authority for the 9 assertion that successor liability principles may apply where a financial institution fails, is taken 10 into receivership by the FDIC-R, and its assets are sold to an assuming financial institution. In 11 fact, the only case cited by the parties that addresses this issue, Holman v. Downey Savings and 12 Loan Association, rejects the argument that common law successor liability applies in this context. 13 See Holman v. Downey Sav. & Loan Ass’n, No. CV 09-03121 DMG (AGRx), 2010 WL 14 11597286, at *10 (C.D. Cal. Apr. 21, 2010). Moreover, the Court agrees with the FCB 15 Defendants that to apply the equitable doctrine of successor liability in this context would 16 undermine FIRREA and the FDIC’s authority under that statute. Under FIRREA, the FDIC, 17 rather than an assuming financial institution, becomes the successor of a failed financial 18 institution. See O’Melveny & Myers, 512 U.S. at 86. Additionally, the FDIC in its role as receiver 19 has broad authority to allocate assets and liabilities, and absent an express transfer and assumption 20 of liability, the FDIC does not transfer liabilities to an assuming financial institution. See Mobine, 21 2012 WL 243351, at *4. Thus, the application of successor liability to an assuming financial 22 institution is not only contrary to FIRREA, but it would hamstring the FDIC’s ability to enter into 23 a P&A Agreement with an assuming financial institution. Cf. Williams, 2009 WL 5199237, at *5 24 (observing that an assuming bank would be disincentivized from entering into a P&A Agreement 25 if it would risk taking on unidentified liabilities); Vernon, 907 F.2d at 1109 (same). Thus, the 26 Court declines to extend common law successor liability principles to this context. 27 28 Accordingly, the Court GRANTS the FCB Defendants’ motion to dismiss Plaintiff’s claims against them. The Court further finds that any amendment would be futile and 12 1 2 3 4 B. Longley’s Motion i. SOX Claim Longley argues that Plaintiff’s allegations in support of her SOX claim are conclusory and 5 fail to support the conclusion that she was terminated because of any whistleblowing or that she 6 suffered damages. Longley Mot. at 12–13. Plaintiff responds that she has adequately alleged facts 7 showing that she engaged in protected activities, that Longley knew of her protected activities, and 8 that her termination was because of her protected activity. Opp. to Longley at 2–5. 9 United States District Court Northern District of California DISMISSES Plaintiff’s claims against the FCB Defendants WITH PREJUDICE. “SOX grants ‘whistleblower’ protection to employees of publicly traded companies by 10 prohibiting employers from retaliating against employees for reporting certain potentially unlawful 11 conduct.” Coppinger-Martin v. Solis, 627 F.3d 745, 748–49 (9th Cir. 2010) (citing 18 U.S.C. 12 § 1514A). In order to state a claim for a violation of SOX, an employee must allege that “(1) the 13 employee engaged in protected activity; (2) the employer knew, actually or constructively, of the 14 protected activity; (3) the employee suffered an unfavorable personnel action; and (4) the 15 circumstances raise an inference that the protected activity was a contributing factor in the 16 personnel action.” Id. at 750 (citing 29 C.F.R. § 1980.104(b)(1)). 17 Longley does not dispute the first three elements of a prima facie SOX claim, and the 18 Court finds that Plaintiff has adequately alleged these elements. Plaintiff has adequately alleged 19 that she engaged in protected activity because her Complaint identifies specific instances in which 20 she reported issues with noncompliance, violations of fiduciary duties to clients, and efforts to 21 cover up violations. See Compl. ¶¶ 17–31; see also 18 U.S.C. § 1514A(a)(1) (noting that 22 protected activity includes “provid[ing] information . . . regarding any conduct which the 23 employee reasonably believes constitutes a violation of section 1341, 1343, 1344, or 1348, any 24 rule or regulation of the Securities and Exchange Commission, or any provision of Federal law 25 relating to fraud against shareholders”). Plaintiff has adequately alleged that Longley had 26 knowledge of her protected activities because she made several of these reports directly to 27 Longley. See Compl. ¶¶ 20–22, 24–26, 30. Finally, Plaintiff has adequately alleged that she 28 suffered an adverse personnel action because she alleged that she was laid off. See id. ¶ 32. 13 United States District Court Northern District of California 1 The Court also finds that Plaintiff has adequately alleged that her protected activity was a 2 contributing factor in her termination. The Ninth Circuit has acknowledged that “causation can be 3 inferred from timing alone where an adverse employment action follows on the heels of protected 4 activity.” Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1003 (9th Cir. 2009) (quoting Villiarimo 5 v. Aloha Island Air, Inc., 281 F.3d 1054, 1065 (9th Cir. 2002)). In this case, the Complaint states 6 that Plaintiff was laid off two days after her last protected activity (i.e., a report to an SVB senior 7 executive) and nine days after her last protected activity with respect to Longley. See Compl. 8 ¶¶ 30–32. Plaintiff also alleges that, despite her layoff, she was “highly rated as an SVB Private 9 executive with decades of industry experience at the largest, most respected firms. Her skills, 10 including deep experience in risk management and investment platform construction, 11 certifications, and licenses, were needed to operate SVB Private’s wealth and investment 12 management operations.” Id. ¶ 35. When accepted as true and construed in the light most 13 favorable to Plaintiff, the Court finds that these facts are sufficient to reasonably infer that 14 Plaintiff’s protected activity was a contributing factor to her termination. See Coppinger-Martin, 15 627 F.3d at 751 (noting that the timing of a plaintiff’s termination and allegations about her good 16 evaluations prior to engaging in protected activity and unfavorable evaluations following her 17 protected activity were sufficient to raise an inference that her protected activity was a 18 contributing factor for a prima facie showing of a SOX claim); see also Van Asdale, 577 F.3d at 19 1003 (finding a dispute of material fact with respect to whether protected activity was a 20 contributing factor in a termination where one plaintiff was terminated two and a half months after 21 engaging in protected activity). 22 Longley’s argument that Plaintiff failed to allege the type and amount of her economic and 23 non-economic harm is unavailing. Perhaps Plaintiff’s complaint could be clearer about the type 24 and amount of damages she is seeking, but Longley has failed to demonstrate why a failure to 25 make such allegations is a basis for dismissing a SOX claim, especially where damages are not an 26 element of a prima facie SOX claim. 27 Accordingly, Longley’s motion to dismiss Plaintiff’s SOX claim is DENIED. 28 14 1 ii. Intentional Interference with Prospective Economic Relations Longley argues that Plaintiff has failed to adequately allege facts to support any of the 2 elements of a claim for intentional interference with prospective economic relations because she 3 has not alleged that she had any probability of future economic relationship, Longley’s knowledge 4 of any future relationship, that Longley engaged in wrongful conduct, that Longley acted with the 5 requisite intent, or that she suffered economic harm. Longley Mot. at 10–12. Plaintiff argues that 6 Longley intentionally interfered with her relationship with SVB and that his actions violated state 7 and federal law as well as SVB’s Code of Conduct. Opp. to Longley at 5–6. Longley responds 8 that the Complaint alleges that he was acting as an agent of SVB and thus was not a third-party 9 with respect to SVB. Longley Reply at 2–3. 10 In order to state a claim for intentional interference with prospective economic relations 11 United States District Court Northern District of California under California law, the plaintiff must allege: 12 13 14 15 (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. 16 Youst v. Longo, 43 Cal.3d 64, 71 n.6 (1987). A plaintiff seeking to recover damages for 17 18 19 intentional interference with prospective economic relations must also “plead as an element of the claim that the defendant’s conduct was ‘wrongful by some legal measure other than the fact of interference itself.’” Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130, 1142 (2020) (quoting 20 Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal.4th 376, 393 (1995)). 21 As an initial matter, the Court notes that the Complaint is not clear about the exact 22 economic relationship with which Longley purportedly interfered. On one hand, Plaintiff appears 23 to allege that Longley interfered with her relationship with SVB. See Compl. ¶ 83 (“Leung was in 24 a productive economic relationship with the SVB Defendants before Defendants Longley and 25 Becker intentionally interfered and caused her business relationship with the SVB Defendants to 26 27 come to an end.”). On the other hand, Plaintiff also contemplates a future employment relationship with FCB. See id. ¶ 86 (“Their actions caused Leung not only to lose her job but 28 15 United States District Court Northern District of California 1 prevented her from being rehired by the SVB Defendants and FCB after SVB’s collapse.”). To 2 the extent that Plaintiff relies on the latter theory, the Court finds that Plaintiff fails to state a 3 claim. California courts generally agree that the first element of the tort of intentional interference 4 with prospective economic relations is a “threshold” determination that requires the Plaintiff to 5 allege a reasonable probability that “the prospective economic advantage would have been 6 realized but for defendant’s interference.” Youst, 43 Cal.3d at 71. Plaintiff has failed to meet this 7 threshold requirement because her theory that she would have been hired by FCB after SVB’s 8 collapse is speculative. Plaintiff’s theory relies on multiple key assumptions, including that SVB 9 would be taken into receivership, that the FDIC-R would sell SVB’s assets to FCB, and that FCB 10 would decide to rehire most of SVB’s staff. All of these assumptions must be true for Plaintiff’s 11 theory to be plausible, and none of them is supported by any facts. Moreover, Plaintiff would also 12 have to show that these assumptions were known by Longley at the time of Plaintiff’s termination 13 in order to meet the second element of the tort of intentional interference with prospective 14 economic relations, and she fails to allege any facts supporting such an inference. Accordingly, 15 Plaintiff has failed to establish the first two elements of a claim for intentional interference with 16 prospective economic relations based on a theory that she would have been rehired by FCB. 17 Whether Plaintiff can state a claim for intentional interference with prospective economic 18 relations turns on whether she can allege that Longley interfered with her relationship with SVB. 19 The first element of the tort of intentional interference with prospective economic relations 20 requires Plaintiff to allege “an economic relationship between the plaintiff and some third party.” 21 Youst, 43 Cal.3d at 71 n.6 (emphasis added). A third party is necessarily a “stranger” to the 22 economic relationship. See Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503, 514 23 (1994) (“The tort duty not to interfere with the contract falls only on strangers—interlopers who 24 have no legitimate interest in the scope or course of the contract’s performance.”); see also Ixchel 25 Pharma, 9 Cal.5th at 1141 (noting that intentional interference with contractual relations and 26 intentional interference with prospective economic relations are related, but intentional 27 interference with prospective economic relations does not require a contract and thus requires that 28 the defendant’s conduct be wrongful by some additional legal measure). A person acting on 16 United States District Court Northern District of California 1 behalf of an interested party to the economic relationship is not a stranger to the economic 2 relationship. In this case, Plaintiff alleges that Longley “was the SVB Head of Private Bank, 3 Wealth & Trust; Interim Head of SVB Private; and Leung’s immediate supervisor,” that she 4 reported issues to Longley, and that Longley terminated her. Compl. ¶¶ 16, 20–32. Although 5 Plaintiff also alleges that “Longley and Becker acted outside the scope of their employment as 6 senior executives,” Compl. ¶ 85; see also id. ¶ 36 (similar), Plaintiff does not identify any facts to 7 support this allegation. See Marin v. Jacuzzi, 224 Cal.App.2d 549, 552 (1964) (affirming 8 dismissal of claims against the vice president and board of directors for claims related to plaintiff’s 9 termination for whistleblowing because the plaintiff failed to allege conspiracy or ultra vires acts); 10 cf. O’Brien as Tr. of Raymond F. O’Brien Revocable Tr. v. XPO CNW, Inc., 362 F.Supp.3d 778, 11 785 (N.D. Cal. 2018) (finding that the plaintiff could bring a claim for intentional interference 12 with contract against an individual defendant who acted as an officer and director of the company 13 when deciding to cut off payments from the company to the plaintiff because the plaintiff 14 presented evidence creating a dispute of material fact regarding whether the defendant was acting 15 as a stranger to the contract or on behalf of the interested party); Kozlowsky v. Westminster Nat. 16 Bank, 6 Cal.App.3d 593, 600 (1970) (rejecting cases applying a “manager’s privilege” because 17 “[t]here is no allegation that [the individual defendant] is the general manager, or that he was 18 otherwise authorized to act on behalf of the Bank in discharging its president”). Thus, the Court 19 finds that Plaintiff has failed to adequately allege facts to support a reasonable inference that SVB 20 was a third party with respect to Longley. 21 To the extent that Longley argues that Plaintiff has failed to allege the other elements of a 22 claim for intentional interference with prospective economic relations, the Court disagrees. 23 Plaintiff alleges that Longley was her supervisor at SVB and that he was responsible for her 24 termination, which is sufficient for the Court to infer that Longley was aware of her relationship to 25 SVB, that Longley acted intentionally, and that her relationship was actually disrupted. See 26 Compl. ¶¶ 16, 20, 32. The Court may also reasonably infer that Plaintiff lost her salary and stock 27 options when she was terminated. See id. ¶¶ 51–52. Finally, Plaintiff alleges that Longley’s 28 conduct was wrongful by some legal measure other than the conduct itself because she alleges that 17 1 it violated SOX. See id. ¶¶ 53–60. Although Plaintiff also argues that Longley’s conduct violated 2 SVB’s Code of Conduct, id. ¶ 85, the Court finds that this allegation lacks factual support— 3 Plaintiff has not identified which provisions of SVB’s Code of Conduct Longley purported 4 violated. 5 6 with prospective economic relations is GRANTED. Because the Court finds that amendment may 7 not be futile, the claim is DISMISSED WITH LEAVE TO AMEND. 8 United States District Court Northern District of California Accordingly, Longley’s motion to dismiss Plaintiff’s claim for intentional interference iii. Punitive Damages 9 Longley argues that Plaintiff has failed to allege that his actions were malicious, 10 oppressive, or reckless to support a request for punitive damages. Longley Mot. at 14. Plaintiff 11 responds that she need only plead simple averments of malice or fraudulent intent and that she has 12 alleged that Longley acted illegally, engaged in a coverup, violated SVB’s Code of Conduct, 13 and/or exceeded his authority in terminating Plaintiff. Opp. to Longley at 6–7. 14 “In federal court, plaintiffs simply need to include a short and plain prayer for punitive 15 damages that relies entirely on unsupported and conclusory averments of malice or fraudulent 16 intent.” Waddell v. Trek Bicycle Corp., No. SACV152082DOCJCGX, 2016 WL 7507770, at *3 17 (C.D. Cal. Apr. 7, 2016) (quotation marks omitted) (quoting Alejandro v. ST Micro Elecs., Inc, 18 129 F.Supp.3d 898, 918 (N.D. Cal. 2015)). Plaintiff has satisfied this standard by alleging that 19 Longley “acted with malice and implemented Leung’s termination to hide and cover up the risk, 20 compliance, and fiduciary duty violations Leung was raising.” Compl. ¶ 37. To the extent that 21 Longley argues that Plaintiff must identify more facts to support her claim for punitive damages, 22 the Court disagrees. Plaintiff alleges that she was a highly skilled and valuable employee who was 23 terminated after repeatedly reporting serious violations of law and SEC regulations and a potential 24 coverup. See Compl. ¶¶ 33–37. The Court takes these allegations as true and construes them in 25 the light most favorable to Plaintiff. After doing so, the Court finds that it may draw a reasonable 26 inference that Longley acted maliciously or oppressively. Although the Court observes that 27 Plaintiff’s request for punitive damages is adequately pled, the request for relief with respect to 28 Longley will fail if Plaintiff cannot state a claim for intentional interference with prospective 18 1 economic relations. See Erhart v. BofI Fed. Bank, No. 15-CV-02287-BAS-NLS, 2022 WL 2 3160730, at *1 (S.D. Cal. Aug. 8, 2022) (“Punitive damages are not available under Sarbanes- 3 Oxley.”); Focal Point Films, LLC v. Sandhu, No. 19-CV-02898-JCS, 2019 WL 7020209, at *12 4 (N.D. Cal. Dec. 20, 2019) (noting that punitive damages may be awarded for the tort of intentional 5 interference with prospective economic relations). 6 7 Accordingly, Longley’s motion to dismiss Plaintiff’s request for punitive damages is DENIED. * United States District Court Northern District of California 8 * * 9 The Court GRANTS IN PART and DENIES IN PART Longley’s motion to dismiss 10 Plaintiff’s claims against him. Plaintiff’s claim for intentional interference with prospective 11 economic relations is DISMISSED WITH LEAVE TO AMEND. Longley’s motion to dismiss 12 Plaintiff’s SOX claim and her request for punitive damages is DENIED. 13 14 15 Becker’s Motion C. i. SOX Claim Becker argues that Plaintiff has failed to allege sufficient facts to show that he had 16 knowledge of any protected activities or that protected activity was a contributing factor in his 17 approval of Plaintiff’s layoff. Becker Mot. at 9–10. Plaintiff argues that the Court can infer that 18 Becker had knowledge of her protected activities and that she has adequately alleged that Becker 19 was a decisionmaker regarding her termination. Opp. to Becker at 1–4. The Court identified the 20 relevant legal standard above, in Part IV.B.i, supra. 21 The Court finds that Plaintiff has not adequately alleged the second and fourth elements of 22 a SOX claim against Becker. The Complaint alleges only that Becker approved the decision to 23 terminate Plaintiff. Compl. ¶¶ 15, 32. The remainder of Plaintiff’s allegations against Becker are 24 conclusory and without support from facts. See, e.g., Compl. ¶ 56 (“Beck[er] [was] aware of 25 Leung’s reporting of known or suspected violations prior to her termination.”); see also id. ¶¶ 36, 26 37, 56–58, 83–87 (similarly conclusory allegations). These allegations are insufficient for the 27 Court to draw a reasonable inference that Becker knew of Plaintiff’s protected activity or that her 28 protected activity was a contributing factor in his decision to terminate her. Plaintiff argues that 19 1 the Court may infer that Becker had knowledge of her protected activity because she reported to 2 other senior executives at SVB, but she has alleged no facts that would allow the Court to 3 reasonably infer that any of the senior executives to which she reported would have informed 4 Becker of her protected activity. Because Plaintiff has failed to allege that Becker had knowledge 5 of her protected activity, it follows that she has failed to allege that her protected activity was a 6 contributing factor to his approval of her termination. 7 Accordingly, Becker’s motion to dismiss Plaintiff’s SOX claim is GRANTED. Because 8 the Court finds that amendment may not be futile, the claim is DISMISSED WITH LEAVE TO 9 AMEND. 10 United States District Court Northern District of California 11 ii. Intentional Interference with Prospective Economic Relations Becker argues that Plaintiff fails to allege sufficient facts to state a claim against him for 12 intentional interference with prospective economic relations and that SVB is not a third-party with 13 respect to Becker. Becker Mot. at 11–14. Plaintiff responds that Becker acted outside the scope 14 of his authority and that she likely would have been rehired at FCB but for her termination. Opp. 15 to Becker at 4–5. The Court identified the relevant legal standard above, in Part IV.B.ii, supra. 16 For the reasons discussed above with respect to Longley, Plaintiff has failed to adequately 17 state a claim against Becker for intentional interference with prospective economic relations. 18 Plaintiff’s theory that she would have been rehired by FCB is speculative, and Plaintiff has failed 19 to allege how SVB is a third party with respect to Becker. See Part IV.B.ii, supra. 20 Accordingly, Becker’s motion to dismiss Plaintiff’s claim for intentional interference with 21 prospective economic relations is GRANTED. Because the Court finds that amendment may not 22 be futile, the claim is DISMISSED WITH LEAVE TO AMEND. 23 iii. Punitive Damages 24 Becker argues that Plaintiff’s request for punitive damages should be dismissed because 25 Plaintiff failed to allege that Becker acted maliciously, oppressively, or in reckless disregard for 26 Plaintiff’s rights. Becker Mot. at 14–15. Plaintiff responds that she need only plead simple 27 averments of malice or fraudulent intent and that she has alleged that Becker acted illegally, 28 engaged in a coverup, violated SVB’s Code of Conduct, and/or exceeded his authority in 20 1 terminating Plaintiff. Opp. to Becker at 6. For the reasons discussed above with respect to Longley, the Court finds that Plaintiff’s 2 3 allegations are adequate support a request for punitive damages. See Part IV.B.iii, supra. 4 However, the Court again observes that Plaintiff’s request for relief will fail if she fails to state a 5 claim for intentional interference with prospective economic relations. Accordingly, Becker’s motion to dismiss Plaintiff’s request for punitive damages is 6 7 DENIED. * 8 * The Court GRANTS IN PART and DENIES IN PART Becker’s motion to dismiss 9 United States District Court Northern District of California * 10 Plaintiff’s claims against him. Plaintiff’s SOX claim and her claim for intentional interference 11 with prospective economic relations are DISMISSED WITH LEAVE TO AMEND. Becker’s 12 motion to dismiss Plaintiff’s request for punitive damages is DENIED. 13 V. ORDER 14 For the foregoing reasons, IT IS HEREBY ORDERED that: 15 1. 16 Inc., and SVB Wealth, LLC’s motion to dismiss (ECF No. 32) is GRANTED. a. Plaintiff’s claims against Defendants FCB, SVB Investment Services, Inc., and 17 SVB Wealth, LLC are DISMISSED WITHOUT LEAVE TO AMEND. 18 19 20 Defendants First Citizens Bank & Trust Co. (“FCB”), SVB Investment Services, 2. Defendant John Longley’s motion to dismiss (ECF No. 46) is GRANTED IN PART and DENIED IN PART. 21 a. Plaintiff’s claim for intentional interference with prospective economic 22 relations against Longley is DISMISSED WITH LEAVE TO AMEND. 23 b. Longley’s motion with respect to Plaintiff’s SOX claim and her request for punitive damages is DENIED. 24 25 26 3. Defendant Greg Becker’s motion to dismiss (ECF No. 51) is GRANTED IN PART and DENIED IN PART. 27 a. Plaintiff’s claims under SOX and for intentional inflection with prospective 28 economic relations against Becker are DISMISSED WITH LEAVE TO 21 AMEND. 1 b. Becker’s motion with respect to Plaintiff’s request for punitive damages is 2 DENIED. 3 4 4. Plaintiff may file an amended complaint within 30 days of the date of this Order. 5 6 7 8 Dated: July 29, 2024 ______________________________________ BETH LABSON FREEMAN United States District Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.