Mele v. Fed Rsrv Bank NY ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
2-24-2004
Mele v. Fed Rsrv Bank NY
Precedential or Non-Precedential: Precedential
Docket No. 03-1556
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PRECEDENTIAL Yoon Hi Greene (Argued)
Federal Reserve Bank of New York
UNITED STATES 33 Liberty Street
COURT OF APPEALS New York, NY 10045
FOR THE THIRD CIRCUIT
Shari Leventhal
Federal Reserve Bank of New York
33 Liberty Street
No. 03-1556 New York, NY 10045
Counsel for Appellee
MICHAEL MELE,
Appellant
OPINION
v.
FEDERAL RESERVE BANK CHERTOFF, Circuit Judge.
OF NEW YORK
Appellant Michael Mele alleges his
employment was terminated in violation of
On Appeal from the the Federal Reserve Bank of New York’s
United States District Court for the (“the Bank”) Management Guide to
District of New Jersey Personnel Policies (“Guide”). The District
(Dist. Ct. No. 02-cv-01216) Court granted the Bank’s motion to
District Judge: Hon. Anne E. Thompson dismiss all counts on the pleadings
pursuant to Fed. R. Civ. P. 12(c). 1 For the
Argued: November 18, 2003
1
Rule 12(c) provides: “After the
Before: RENDELL, BARRY, and pleadings are closed but within such time
CHERTOFF, Circuit Judges as not to delay the trial, any party may
move for judgment on the pleadings. If,
(Filed: February 24, 2004) on a motion for judgment on the
pleadings, matters outside the pleadings
Brian E. Fleisig (Argued) are presented to and not excluded by the
Pearce & Massler court, the motion shall be treated as one
25 Main Street for summary judgment and disposed of as
Court Plaza North provided in Rule 56, and all parties shall
Hackensack, NJ 07601-7025 be given reasonable opportunity to present
Counsel for Appellant all material made pertinent to such a
1
reasons stated below, we will affirm the became verbally and physically abusive,
District Court’s dismissal. and physically escorted Mele out of his
office. Mele immediately reported the
I. incident to the Bank’s Human Resources
Jurisdiction in this Court is proper Department. As a result of these events,
because the judgment is a final order under Mele was suspended with pay, and later
28 U.S.C. § 1291. This Court’s review of was terminated for what was deemed
a Rule 12(c) motion to dismiss is plenary. “misconduct.”
Leamer v. Fauver, 288 F.3d 532, 535 (3d On January 13, 2002, Mele filed a
Cir. 2002). As with a Rule 12(b)(6) four-count complaint against the Bank in
motion, this Court “view[s] the facts the Superior Court of New Jersey. Count
alleged in the pleadings and the inferences One alleged breach of contract based on
to be drawn from those facts in the light the Bank’s failure to adhere to the Guide’s
most favorable to the plaintiff.” Id. That warning procedures or graduated
is, the motion should not be granted discipline measures in terminating Mele.
“unless the moving party has established Count Two claimed wrongful termination
that there is no material issue of fact to on the ground that Mele’s purported
resolve, and that it is entitled to judgment “misconduct” did not fall into one of the
in its favor as a matter of law.” Id. four categories of employee misconduct
Mele was employed as a facilities set forth in the Guide. Count Three pled
engineer at the East Rutherford Operations breach of the implied covenant of good
Center (“EROC”) of the Bank in Bergen faith and fair dealing, and Count Four
County, New Jersey, from July 1995 to alleged wrongful interference with Mele’s
January 2000. Mele claims that, in early prospective economic advantage in
January 2000, he was denied access to a continued employment. Mele does not
particular area of EROC on the ground that advance any authority other than the Guide
he was required to be armed or to support any of these claims.
accompanied by an armed individual, On March 19, 2002, the Bank filed
despite the fact that he had previously a notice of removal, pursuant to 12 U.S.C.
enjoyed unhampered access to that area. §632.2 On January 23, 2003, the District
Thereafter, Mele reported to his supervisor Court granted the Bank’s motion to
Terrence McCorry, who, he alleges, dismiss all counts on the pleadings
denied his request for a written copy of the pursuant to Fed. R. Civ. P. 12(c). The
Bank’s policy regarding access to the area,
2
This section provides, in pertinent
motion by Rule 56.” As the District Court part: “[A]ny Federal Reserve bank which
noted, because the Bank had already filed is a defendant in any such suit may, at any
an answer in the action, the motion is for a time before the trial thereof, remove such
judgment on the pleadings pursuant to suit from a State court into the district
Rule 12(c). court of the United States.”
2
District Court explained that Mele’s claims Third. To make contracts.
rested on the premise that he had an ...
employment contract with the Bank, a
conclusion undermined by both the Fifth. To appoint by its board of
language of the Federal Reserve Act, 12 directors a president, vice
U.S.C. § 341, Note 3, and case law presidents, and such officers and
interpreting the Act to restrict the Bank’s employees as are not otherwise
power to enter into employment contracts. provided for in this chapter, to
The District Court, however, opted not to define their duties, require bonds
address the open question of the Bank’s for them and fix the penalty
power to contract, concluding that even thereof, and to dismiss at pleasure
“assuming in arguendo that the Federal such officers or employees. . . .
Reserve Bank could enter into an
employment contract, nothing inside the 12 U.S.C. § 341 (emphasis added). The
Guide prevents the Federal Reserve Bank Bank asserts that the language of
from terminating an employee in paragraph five confers an indefeasible
plaintiff’s position, in view of the power to terminate employees at will.
disclaimer found on the front cover.” Mele argues that paragraph five’s
Notice of appeal was timely filed on “dismiss[al] at pleasure” provision should
February 24, 2003. be read in conjunction with paragraph
three, so that it is not treated as a limitation
II. on the Bank’s authority to enter into
The Bank contends we should contracts, including employment contracts.
affirm the dismissal of Mele’s claim Mele tries to reconcile these provisions by
because the Federal Reserve Act, 12 suggesting that binding the Bank to
U.S.C. § 341, Note 3, restricts the Bank’s employment contracts is consistent with
authority to enter into employment the reserved power to dismiss employees
contracts, so that any implied contract at will because “any party to any contract
created by the Guide is unenforceable. can breach its duties provided only that it
The statute enumerates the general powers pay damages ensuing from the breach.”
of the Federal Reserve Bank: (Appellant Br. at 8).
Upon the filing of the organization We reject such a strained
certificate with the Comptroller of interpretation of the statute. Mele’s
the Currency a Federal Reserve position would rewrite Congress’s specific
bank shall become a body instruction that the Bank retain the power
corporate and as such, and in the to dismiss at pleasure into a statutory
name designated in such damages clause. The better reading
organization certificate, shall have recognizes that paragraph three generally
power— refers to “contracts,” and that the more
... specific reference in paragraph five to
3
employment should be read as a limitation to create such rights by reference to
on the general power to enter into independent sources are violative of the
contracts. “[A] recognized tenet of statute and void thereunder.” Bollow, 650
statutory interpretation directs that a F.2d at 1098. M oreover, the cases have
specific provision in an enactment prevails specifically rejected claims, similar to
over a seemingly irreconcilable general those of Mele, that an employee is
one.” LaVallee Northside Civic Ass'n v. contractually protected by personnel
Virgin Islands, 866 F.2d 616, 621 (3d Cir. policies and practices, including written
1989) (citing 2A A. Sutherland, Statutes policies of progressive discipline. See
and Statutory Construction § 51.05, at 499 Little, 601 F. Supp. at 1376; Armano, 468
(N. Singer 4th ed. 1984)). F. Supp. at 675-76; Obradovich, 569 F.
While this Court has not previously Supp. at 790. Rather, “[a]ny implied
addressed this particular statute, “[c]ourts contract based upon the Federal Reserve’s
uniformly hold that [the Federal Reserve personnel rules would exceed the Federal
Act] precludes the enforcement of any Reserv e’s autho rity, and be
employment contract against a Federal unenforceable.” Id. at 790. Such a
Reserve Bank and prevents the contractual obligation would undermine
development of any reasonable the Congressional intent to protect Federal
expectation of continued employment.” Reserve Banks from restrictions in
Jaffee v. Federal Reserve Bank of carrying out their duties. See Armano, 468
Chicago, 586 F. Supp. 106, 107-08 (N.D. F. Supp. at 676.
Ill. 1984) (citing cases); see Magel v. Mele points to no authority to the
Federal Reserve Bank of Philadelphia, 776 contrary. We now explicitly join the
F. Supp. 200, 205 (E.D. Pa. 1991), aff’d 5 approach uniformly adopted by other
F.3d 1490 (3d Cir. 1993); Bollow v. courts considering this issue. We hold that
Federal Reserve Bank of San Francisco, the Federal Reserve Act precludes
650 F.2d 1093, 1097-98 (9th Cir. 1981); enforcement against a Federal Reserve
Little v. Federal Reserve Bank of Bank of an employment contract that
Cleveland, 601 F. Supp. 1372, 1375-77 would compromise its statutory power to
(N.D. Ohio 1985); Obradovich v. Federal dismiss at pleasure, and prevents the
Reserve Bank of New York, 569 F. Supp. development of a reasonable expectation
785, 790 (S.D.N.Y. 1983); Armano v. of continued employment. As a result,
Federal Reserve Bank of Boston, 468 F. Mele’s argument that he was terminated in
Supp. 674, 675-76 (D. Mass. 1979); see contravention of the Guide’s policies is
also Inglis v. Fienerman, 701 F.2d 97 (9th without merit.
Cir. 1983) (analyzing similar language
under the Federal Home Loan Bank Act). III.
These courts have noted that “no Mele contends that even if the Bank
process or tenure rights are conferred on has the power to dismiss employees at
reserve bank employees . . . [and] attempts will, the Guide relinquishes this right in
4
order to retain those employees, and the This guide provides a description
Bank should not be allowed to disavow of certain Bank policies,
this supposed quid pro quo. Mele, procedures and benefits. This
however, cites no authority to support the guide is not intended to be a
proposition that the Bank is authorized to contract of employment, nor does it
waive or relinquish the right to terminate supersede or modify the Bank’s
employees at will.3 We need not decide Operating Bulletins and Circulars,
whether it is ever possible for a Federal the specific contracts and
Reserve Bank to relinquish this right documents covering Bank-provided
because in this case it is clear that it did benefits, or the Bank’s right, under
not do so. federal law, to terminate any
The Guide actually disclaims any employee at will.5
limitation on the Bank’s statutory power to
dismiss at pleasure. The Guide contains
the following statement on the cover in cannot now complain that it is somehow
italicized font:4 “unfair” or “unjust” for the Bank to
“disavow” the Guide.
5
3
At argument, even Mele concedes Mele argues that the District Court
that there is no case supporting the erroneously relied on the disclaimer in
proposition that the Bank has the authority ruling on the Rule 12(c) motion. The
to waive the dismiss at pleasure provision. general rule is that a “district court ruling
Mele merely directs this Court’s attention on a motion to dismiss may not consider
to a general line of estoppel cases. See, matters extraneous to the pleadings.” In re
e.g., Heckler v. Cmty. Health Servs. of Burlington Coat Factory Sec. Lit., 114
Crawford County, Inc., 467 U.S. 51, 59 F.3d 1410, 1426 (3d Cir. 1997).
(1984). None of the cases deal However, an exception to this general rule
specifically with the authority of the Bank provides that a “‘document integral to or
to relinquish an explicit statutory grant of explicitly relied upon in the complaint’
power to dismiss at pleasure. may be considered ‘without converting the
motion [to dismiss into one for summary
4
Mele contended at argument that judgment.’” Id. (quoting Shaw v. Digital
the disclaimer is not actually on the cover Equip. Corp., 82 F.3d 1194, 1220 (1st Cir.
since the Guide was placed in a binder. 1996)) (emphasis added in In re
Even if the binder cover had to be opened Burlington). Here, consideration of the
before the text of the disclaimer was disclaimer in the Guide clearly falls within
revealed, this does not undermine the this exception for documents “integral to
claim that the Bank specifically indicated or explicitly relied upon in the complaint.”
it was not relinquishing its power to The Guide forms the heart of Mele’s
dismiss at pleasure, and that the disclaimer complaint. Thus, the disclaimer is just the
was conspicuously placed such that Mele kind of evidence that the “integral”
5
This disclaimer specifically emphasizes not allege the termination was invalid
the Bank’s federal right to terminate any because it was not authorized by the Board
employee at will, and rejects any notion of Directors or its valid delegate. What he
that the Guide is intended to be a alleged—and what we have rejected—was
relinquishment of this power. that his termination was forbidden by the
The District Court concluded that in Guide. Mele first raised the suggestion
light of the disclaimer, nothing in the that the termination was unauthorized in a
Guide prevents the Bank from terminating letter submitted after a status conference in
employees. Because we conclude above which the District Court provided Mele
that the Federal Reserve Act precludes with a final opportunity to submit case law
enforcement of an employment contract in support of his opposition to the 12(c)
that would compromise the Bank’s motion.
statutory power to dismiss at pleasure, we “‘It is black-letter law that [a]
need not reach the issue of whether the motion to dismiss for failure to state a
disclaimer is sufficient under ordinary claim . . . is to be evaluated only on the
employment contract law principles. But pleadings.’” A.D. Bedell Wholesale Co.,
the disclaimer certainly rebuts Mele’s Inc. v. Philip Morris, Inc., 263 F.3d 239,
contention that the Bank intentionally 266 (3d Cir. 2001) (quoting Mahone v.
relinquished the power to dismiss at Addicks Utility Dist., 836 F.2d 921, 935
pleasure (assuming it could do so). (5th Cir. 1988)) (other internal quotations
omitted). An entirely new claim for relief
IV. presented in a letter brief does not
Mele suggests on appeal that the constitute an amendment to the pleadings.
Bank cannot claim the protection of the In deciding a Rule 12(c) motion, the court
employment at will provision because the does not consider matters outside the
termination was not undertaken by the pleadings.6 Here, viewing the complaint
Board of Directors, as required by 12 “in the light most favorable to the
U.S.C. § 341. In his complaint, Mele did plaintiff,” the Bank has established that
“there is no material issue of fact to
resolve, and that it is entitled to judgment
documents exception was intended to in its favor as a matter of law.” Leamer,
encompass, so that plaintiff cannot 288 F.3d at 534.
maintain a claim “by extracting an isolated
statement from a document and placing it
in the complaint, even though if the
6
statement were examined in the full Mele’s own brief concedes that “a
context of the document, it would be clear Court may only consider the Complaint
that the statement [did not support the and the reasonable inferences therefrom”
claim].” In re Burlington Coat Factory, in deciding a Rule 12(c) motion.
114 F.3d at 1426. (Appellant Br. at 27, n.5).
6
V.
For the foregoing reasons, we
affirm the District Court’s grant of the
motion to dismiss pursuant to Fed. R. Civ.
P. 12(c).
7