2004 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit

2-24-2004 

# M ele v . F ed R s r v B a nk NY

P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al

D ocke t N o . 03-1556

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### 1 PRECE DENTI AL

UNITED STA TES COURT OF APPEALS FO R T HE TH IRD CIR CU IT

No. 03-1556

M ICH AE L M EL E,

Appellant

v.

FEDER AL RES ERVE BAN K OF NEW YORK

On Appeal from the United States District Court for the Distri ct of New Jerse y (Dist. Ct. No. 02-c v-01216) Distri ct Judge: Hon. Anne E. Thompson

Argued: November 18, 2003

Before: RENDELL , BARRY , and CH ER TO FF , Circuit

Judges
(Fil ed: February 24, 2004)

Brian E. Fl eisi g (Argued) Pearce & Ma ssler 25 Main Street Court Plaza

North Hackensack, NJ 07601-7025 Counsel for

Appellant Yoon Hi Greene (Argued) Federal Rese rve Bank of New York 33 L iberty S treet New Y ork, NY 10045

Shari Leventhal Federal Rese rve Bank of New York 33 L iberty S treet New Y ork, NY 10045
Counsel for

Appellee

OPI NION

CH ER TO FF , Circuit

Judge

. Appellant

M ichae l M ele alleg es his employment w as terminat ed in viol ation of the Federal R eserve B ank of N ew Y ork’s (“ th e Ban k”) M anag eme nt G uide to Personnel Polici es (“ Guide ”)

. The Distri ct Cou rt g ranted the B ank’ s mo tion to dismiss all counts o n the ple adings pursuant to Fed. R . Civ. P. 12(c). 1 For the

1 

### Rule 12(c) provide s: “ A fter the pleadings are clos ed bu t within such time

as not to delay the t

rial, a ny party may
move for judgment on the pleadings

. If,

on amotion for judgment o n th e pleadings, matters o ut side the pleadings
are presented to and not

excluded by the court, the motion s hall be treated asone for summaryjudgment and disposed of as providedin Rule 56, and all parties shall be given reasonable

opportunity to prese

nt all material made pertinent to such a

### 2

reasons st at ed b el ow, we wi llaf fi rm th e Dis trict C our t’s di sm issal

.

I. Juris dict io n in thi s Court i s proper because the jud gm ent is a finalorder under 28 U.S.C. § 1291. This Court’ s revi ew of

a Rule 12(c) motion to dismis s is pl enary. Lea me r v. Fauver , 288 F.3d 532, 535 (3d Cir. 20 02). As with a Rule 12(b)( 6) motion, thi s Co urt “vie w[s] the facts alle ged in the pl eadings and t he inferences to be dr aw n from those facts in t he light

mo st favorabl e to the plaint iff .” Id. That i s, the m otion s hou ld no t be gra nte d “unless the moving party has es tabli shed that there is n o mate rial issue of fact to resol ve, and that

it i s enti tled to judgment in it s favor a s a matte r of l aw.” Id. M ele was employed as a fa cili ties engineer at the East Ru therford Operations Center (“EROC”) of the Bank in Bergen County, New Jersey, fr om July 1 995 to Janu ary 200 0. M ele claim s that, in e arly Janu ary 20 00, he was denie d access t o a parti cular

area of EROC on the ground that he was requir ed to be a rm ed or

acco mp anied by an arme d ind ividua l, desp ite the fac t that he had p reviou sly enjoyed unh am pered acces s to that are a. Therea fter, Mele report ed to his supervi sor Terrence McCor

ry , w h o, he alleges, denied his request

for a wri tten copy of the Bank ’s policy regarding a ccess t o the are a, bec ame verball y and physical ly abusi ve, and phy sically e scorte d M ele ou t of his offi ce. M ele i mmediatel y report ed the incide nt to the Bank’ s Human R eso urces Departmen t. As a result of t hese events, M ele was suspended with pa y, and l ater
was terminated for what was deemed “m isco ndu ct.” On January 13, 2002, Mele fi led a four-c ount compl a int aga inst the B ank in the Sup er io r Co ur t o f Ne w J ersey . Count One alle ged breach of

contrac t based on the Ban k’s failu re to ad here to the Guide ’s

war ning procedures or gradu ate d disci pline measures i n terminat in g Mele. Count Two claimed wrongful termination

on the g roun d that Mele’ s purport ed “misc ond uct” did not f all i nto on e of t he four categories of

employee misconduct

se t forth in the Guide . Count Three pl ed bre ac h of the i mplied covenant of good faith and fair

deali ng, and Count Four alle ged wron gful interference w ith Mele’s prospect ive economic advantage i n continue d emp lo yment. Mele does not advance any authori ty other than the Guide to su ppo rt an y of thes e cla ims

. On March 19, 2002, the Bank fil ed

a notice of rem oval, pursuant to 12 U.S .C. §632. 2 On Janu ary 23, 2003, the Dist rict Cou rt granted the Bank’s m otion to dismiss all c ounts on the pl e adings pursuant to Fed

. R. Civ. P. 12(c). The



### motionby Rule 56.” As the District Court noted, because the Bank had alrea dy filed

an answer in the

action, the mot

ion is for a judgment on the pleadings pursuant to Rule 12(c). 2 

### This section provides, in pertinent part: “[A]n y Fe deral Re serve bank which is a defe ndan t in any such sui t may, at any ti me before t

he tria l thereof, r emove such

s uit f rom a State court i nto the di stri ct court of the Unite d States .”

### 3

Distri ct Co urt explai ned that Me le’s clai ms rest ed on th e p remise t hat he had an employment cont ract w ith th e B ank , a
c onclusi on undermined by both t h e language of the F e deral 

### Reserve Act, 12 U.S.C. § 341, Note 3 , and case l aw inter preti ng the Ac t to restrict the Bank’s power to ente r into employment contracts. The Distric t Cou rt, how ever, o pted n ot to address the open question of the Bank ’s power to contr act, concludi ng that e ven “assu min g i n arguendo that t he Federal Reserve Ban k cou ld ente r into an employment contr ac t, not hing ins ide the Guide prevents the F ederal Re serv e Bank from te rmi nat in g an emp loyee i n p l aintiff’s position, i n view of the discl aimer found on the f ront co ve r.” N otice of appeal was timely f iled o n Feb rua ry 2 4, 20 03.

II. 

### The Bank contends we sho ul d af firm the dismissal of Mele’s cla i m because the Federal Res erve Act , 12 U.S.C. § 341, Note 3, restrictsthe Bank’s authority to enter into em ployment contracts, so that any impli ed c on tract created by the Guide is unenforce able

. The statute enumerates t

he general powers of the Federal Re serve Bank: Upon the filing of the

organization certificate with the Comptroller of the Curr enc y a Federal Rese rve bank shal l beco me a bod y corporate and as such, and in the

name design ated in suc h

o rganization

certifica te, shall have power—

. . . Third. To make contr acts.

. . .
Fifth. To appoint by its board of directors a p re sident, vic e presidents, and such officer s and employees as are not otherwise pr o videdfor in this chapter, to definetheir duti es, require bonds for them and fix the penalty thereof, and to dismiss at pleasure such officers

or employees

. . . .
12 U.S.C. § 341 (empha sis added). The Bank asserts tha

t the language of paragraph

five confers a

n indefeas i ble power to terminate employ ees at will. Mele argues that par

agraphfi ve’s “dismiss[al] at

pleasure” provision sho uld be read in conjuncti on with par agr aph three, so that it is not

treated as a

limitation

on the Bank’s authority to enter into contracts , in cluding employment contracts

. Mele tries t

o reconcile the se provisions by

s ugg esting that binding the Ban k to employment

contracts i s consistent with th e r eserved power to di smiss employees at will because “ any party to any contract
can breach its duti es provided on ly that it pay dama ges ensuing from the breach .” (Appellant Br. at 8). W e reject such a

strai ne d int e rpretation

of the statute . Mele’s positi on would rewrite C ongress’s specifi c instruction tha

t the Bank retain the power to dismiss at ple asu re into a stat utory damages clause. The bet ter reading recognizes that paragraph three gen erally refers to “co ntra cts,” and that the more specific refere nce in paragraph five to

### 4

employment

should be read as a

limitation

on the general power to en ter into contracts. “[A] reco gnized tenet of statutory interpretation directs that a specific provision in an enactmen t p revails
over a seemingly irr

econcilable general

on e.” LaValle e North side Civ ic Ass'n v

. Virgin Islands , 866 F.2d 616, 621 (3d Cir. 1989) (citing 2A A. Sut

he rland, Statutes and Statutory Construc tion § 51.05, at 499 (N. Singer 4th ed. 1984) ). While this Court

has not previously addressed this particular s tatute, “[c]ourts uniformly hold that [the Fede ral Reserve Act] pr ecludes the enf

orcement of any

e mployment

contract against a Federa l Reserve Bank and prevents th e developme nt of any r easonabl e expectation

of con t inued employment.” Jaffee v. Federal Rese

rve Bank of Chicago , 586 F. Supp. 106, 107-08 (N.D. Ill. 1984) (citing cases); see Magel v. Fede ral Reserve Bank

of Philadelphia , 776 F. Supp. 200, 205 (E.D

. Pa. 1991), aff’d 5 F .3d 1 490 (3d Cir. 199 3); Bollow v. Fed eralReserve Bank of San Francisc o , 650 F.2d 1093, 1097-98 (9th Cir. 1981); Little v. FederalReserve Bank of Cleveland , 601 F. Supp. 1372 , 1 375-77 (N. D. Ohio 1 985); Obradovi ch v. Federal Reserve Bank of New York , 569 F. Supp. 785, 790 (S.D .N.Y . 1983 ); Armano v. Federal Reserve Bank of Boston , 468 F. Supp. 674 , 675- 76 (D . Ma ss. 197 9); see also Inglis v. Fienerman , 701 F .2d 97 (9th Cir. 1983) (anal yzing si milar l anguage under the F ederal H ome L oan B ank A ct). These courts have no ted tha t “no process or tenur e right s are conf erred on

reser ve bank employees

. . . [and] attem pts to create such rights b y refer ence to independ en t sources are viol ative of the statute and void the reunder. ” Bollow , 650 F.2d at 10 98. M ore ove r, th e cases have

s pe cifically rejected claim s, similar to those of M ele, that a n em ploy ee is contra ctually protected by personnel polici es and pra ctice s, in cluding wri tten polic i es of p rog ress ive d iscip line. See Little , 601 F. Su pp. at 1 376 ; Armano , 468 F. Sup p. at 67 5-76 ; Obradovich , 569 F. Supp. at 790. Rat her , “[a] ny impli ed contrac t based upon the Federal Reserv e’s personnel rules woul d e xceed the Feder al Reserv e’s autho rity , an d b e
une nfo rcea ble.” Id. at 790. Such a contrac tual obl ig at io n wo ul d undermine the Congressiona l intent to prot ect Federal Reser ve Ban ks from restriction s in carryi ng out their dut ies. See Armano , 468 F. Supp. at

676. Me le po ints to no authority t o the contrary. 

### W e now explicitly join the approachuniformly adopted by ot her courts considering this issue. We h old that the Federal Reser

ve Act precl udes enforcement

againsta Federal Reser ve Bank of an emplo yme nt contract tha t would compromise its statutory pow er to dismiss at pleasure, and prevents the development

of a reasonable

expect ati on of continued employmen t. As a result, Mele’s argument

that hewas terminated in contravention

of the Guide ’s policies is without merit.

III. Mele contends that even if the Bank has the power to dism is s employees at will, the Guide relinquishesthis right in

### 5

order to retain those

employees, and t

he Bank should not be allowed t o disavow this supposed quid pro quo . Mele, however, cites no authority to support the proposition

that the Bank is authoriz ed to waive or relinquish the right to terminate employees at will. 3 

### We ne ed not decide whether it is ever pos s ible for a Feder al Rese rve Bank to relinquish t his right because in this case it is c lear that it did not do so. The Guide actually discl aimsany l imitation on the Ba nk’s st atutor y power t o dismiss a t pleasure. The Guide contains the following state

m ent o n the cover in italicized font: 4 

### This guide pro vid es a description of certa in Ba nk policies
, proceduresand benefits. Th i s guide is not intended to be a contract of employment, nor d oes it supersedeor modify the Bank ’ s Operating Bulletins

and Circulars, the specific con tracts a n d docume nts covering Ban k-provide d benefits, or the Bank’sright, under federal law, to terminate

any employee at will. 5

3 

### At argument, even Mele concedes that there is no cas e s upporting the proposition

that the Bank hasthe authority to waive the dismi ss at pleasur e provision. Mele merely directs this Court’s attent ion to a gen eral li ne of estoppel cases. See, e.g. , H eckler v. Cmty. Health Servs. of Crawford County, Inc. , 467 U.S. 51, 59 (1 98 4). None of the casesdeal specifically with theauthority of the Ba nk to relinquish an explicit statutory grant of power to dismiss at pleasure.

4 

### Mele contended at argum ent that the disclaimer is not actually on the cover sinceth e Guide was placed in a binder. Even if the binder cover

had to be opened befo re the text of the di sclaimer wa s revealed, this does not underm ine the claimthat the Bank specifica lly indicated it was not relinqui shing its power to dismiss at pleasure, and

that the discl aimer
was conspicuously plac e d such that Mele can not now complain that it is someho w “unfair” or “unjust” for t he Bank to “disavow” the Guide

.

5 

### Mele arg ue s that the Dist rict Court

er rone ously relied on the disclaimer in

r uling on the Rule 12(c) motio n. T h e generalrule is that a “distric t court ruling

on a motion to dismi ss ma y not consider matters extraneous to the

pleadings.” In re BurlingtonCoat Factory Sec. Lit. , 114 F.3d1410, 1426 (3 d Cir. 1997). However, an exception

to this general rule pr ovides that a “‘document integral to o r explicitly relied upon in the comp laint’ may be cons idered ‘w ithout converting t he motion[to dismiss into one for summar y judgment.’” Id. (quoting S haw v. Digital Equip. Corp. , 82 F.3d1194, 1220 (1 st Cir. 1996)) (emphasis adde d i n In r e Burlington ). Here, co nsideration of t he disclaimer

in the Guide clearly falls within this exception for doc uments “integral to

or explicitly relied upon in the complaint.” The Guide fo rm s the heart of Mele’s complaint. Thus, the disclaimer is justthe kindof eviden ce that the “integral”

### 6

This disclaimer specificall y emphasizes the Bank’s federal

ri g ht to terminat

e any employeeat will, and re

jects any notion that the Guide is intended to be a relinquishment of this po wer. The District Court

c oncluded that i n light of the disclaimer, nothing in the Guide prevents the Bank f rom terminat

ing employees. Because we concl ude above that the Federal

Re serve Act prec ludes enforcement

of an employment c ontract that would compromise t he Bank’s statutorypower to dismiss at ple asure , we
n eedn ot reach the is sue of whether the disclaimer

is suffic ie nt under ordinary employment

contract law pr

inciples

. But th e disclaimer

certainly re

buts Mele’s contention

that the Bank i n tentionally relinquished

the power to dismi ss at pleasure (assuming it could d o so).

IV. Mele suggests on appe a l that the Ba nk cannot claim t

he protection of

th e employment

at will provision bec ause the termination

w as not undertaken by the Boardo f Dir ectors, as r equired by 12 U.S.C. § 341. In his complaint, Mele di d n o t allege the termination was inv alid because it was not authorized by the Board of Directors or

its valid dele gate. What he alleged—and

what we have rej ected—was that his terminatio n wa s forbidden by the Guide

. Mele first raise d the suggestion that the terminat

ion was unauthorized

in a letter submitted aft

er a statusconference in whichthe D is trict Court provided M ele with a final opportunity to submit case l aw in support of his op pos ition to the 12(c) motion. “‘It is black-l ett er law that [a] motiont o dismiss for f

ailure to sta

te a claim. . . is to be evaluated onl y on the pleadings.’” A.D. Be dell Who lesale Co., Inc. v. P hilip Morris, I

nc. , 263 F.3d 239, 266 (3 d Ci r. 2001) (quoting Mahone v. Addicks Utility Dist. , 836 F.2d 9 21, 9 35 (5th Cir. 1988)) (other interna l quotations omitted). An entirely newclaim for relief presented in a letter br

ief does not constitute an amendment to t he pleadings. In deciding a

Rule 12(c) motion, the court d o es not consider mat

ters outside t

he plea di ngs. 6 

### Here, viewing the complaint “in the light mos t favorable to the plaintiff,” the B ank has establi shed that “thereis no mate rial issue of fact to resolve, and tha

t it is entit

led to judgment in its favor as a

matter of

law.” Leamer , 288 F.3d at 534

. documents exceptio n was intended to encompass, so that plaintiff cannot maintain a claim “by ext

racting an isolated statement f

rom adocument and placing it in the complaint, ev en th ough if the statement were examined

i n the full context of the document, it would be clear that the stateme

nt [did not support the claim].” In re Burlington Co at F actory , 114 F.3d at 142 6. 6 

### Mele’s own brief concedes that

“a Court may onl y co nsider the Compla int andthe reasonable in ferences therefrom” in deciding a Rule 12(c ) motion. (Appellant Br. at 27, n.5 ).

### 7 V. F or th e f

or eg oi ng rea so ns , w e affirm the D istrict C ou rt’ s grant of the motion to dis miss purs uant to Fed. R. Civ. P. 12(c).