Opinion ID: 761244
Heading Depth: 2
Heading Rank: 1

Heading: Defamatory Statements in the SAR

Text: 10 In his complaint, Lee alleged that Bankers Trust defamed him in an SAR filed with the United States Attorney for the Southern District of New York. While refusing to confirm or deny the filing of an SAR, Bankers Trust counters that it has immunity for any allegedly defamatory statements made in such a filing. Lee recognizes that Bankers Trust enjoys some immunity for statements in an SAR, but argues that this immunity extends only to statements made in good faith. Lee is incorrect. 11 This Court reviews de novo a district court's decision to dismiss a complaint for failure to state a claim, taking all factual allegations as true and construing all reasonable inferences in the plaintiff's favor. See Jaghory v. New York State Dep't of Educ., 131 F.3d 326, 329 (2d Cir.1997). Dismissal is proper only if 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'  Valmonte v. Bane, 18 F.3d 992, 998 (2d Cir.1994) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). 12 The regulations promulgated under the Annunzio-Wylie Act (the Act), 31 U.S.C. § 5318(g), require financial institutions like Bankers Trust to file an SAR no later than thirty (30) days after the initial detection of a known or suspected violation of federal law, a suspected transaction related to money laundering activity, or a violation of the Bank Secrecy Act. 12 C.F.R. § 208.20(d) (1997). Institutions are prohibited from acknowledging filing, or commenting on the contents of, an SAR unless ordered to do so by the appropriate authorities. See 12 C.F.R. § 208.20(j) & (g). 13 SAR filers are protected from civil liability by the safe harbor provision of the Act, which provides: 14 Liability for disclosures. Any financial institution that makes a disclosure of any possible violation of law or regulation or a disclosure pursuant to this subsection or any other authority, and any director, officer, employee, or agent of such institution, shall not be liable to any person under any law or regulation of the United States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the person involved in the transaction or any other person of such disclosure. 15 31 U.S.C. § 5318(g)(3) (Supp.1998). The safe harbor provision applies, regardless of whether the SAR is filed as required by the Act or in an excess of caution. See 12 C.F.R. § 208.20(k) (1998) (to be recodified at 12 C.F.R. 208.62(k) (1999)). 16 Although the regulation does not say so, Lee argues that there is immunity only where the disclosures in the SAR were made in good faith. We disagree. 17 It is axiomatic that the plain meaning of a statute controls its interpretation, see Greenery Rehabilitation Grp., Inc. v. Hammon, 150 F.3d 226, 231 (2d Cir.1998), and that judicial review must end at the statute's unambiguous terms. See Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981). Legislative history and other tools of interpretation may be relied upon only if the terms of the statute are ambiguous. See Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1073 (2d Cir.1993). 18 The plain language of the safe harbor provision describes an unqualified privilege, never mentioning good faith or any suggestive analogue thereof. The Act broadly and unambiguously provides for immunity from any law (except the federal Constitution) for any statement made in an SAR by anyone connected to a financial institution. There is not even a hint that the statements must be made in good faith in order to benefit from immunity. Based on the unambiguous language of the Act, Bankers Trust enjoys immunity from liability for its filing of, or any statement made in, an SAR. 19 Our conclusion based on the language of the Act is bolstered by a common sense appraisal of the safe harbor provision's place within the Act. Financial institutions are required by law to file SARs, but are prohibited from disclosing either that an SAR has been filed or the information contained therein. See 12 C.F.R. § 208.20(k) (1998). Thus, even in a suit for damages based on disclosures allegedly made in an SAR, a financial institution cannot reveal what disclosures it made in an SAR, or even whether it filed an SAR at all. 20 Under plaintiff's theory, he can allege, on information and belief, that a bank filed an SAR containing allegedly defamatory statements that were not made in good faith. If the bank sought summary judgment, it would then have to establish that the statements in the SAR were made in good faith, but it would be prohibited by law both from disclosing the filing or the contents of an SAR. It flies in the face of common sense to assert that Congress sought to impale financial institutions on the horns of such a dilemma. 21 Finally, although the safe harbor provision is unambiguous, and does not require resort to legislative history, the history of the Act demonstrates that Congress did not intend to limit protection to statements made in good faith. An earlier draft of the safe harbor provision included an explicit good faith requirement for statements made in an SAR. See 137 Cong. Rec. S16,642 (1991). However, the requirement was dropped in later versions of the bill, and was not included in the bill that was eventually enacted by Congress. See 137 Cong. Rec. S17,910, S17,969 (1991); 31 U.S.C. § 5318(g)(3). 22 Lee urges us to ignore the plain meaning of the Act, the common sense argument, and the legislative history, and to accept the analysis suggested by the Eleventh Circuit in Lopez v. First Union Nat'l Bank, 129 F.3d 1186 (11th Cir.1997). In Lopez, the court stated that the safe harbor provision protects institutions only if they have a good faith suspicion that a law or regulation may have been violated. Lopez, 129 F.3d at 1192-93. Lopez did not explain where the requirement of a good faith suspicion came from, or why it was necessary to its decision. 23 We decline to import a good faith requirement into the statute. The Act provides immunity for disclosure of any possible violation of law or regulation. 31 U.S.C. § 5318(g)(3) (emphasis added). We conclude that the safe harbor provision does not limit protection to disclosures based on a good faith belief that a violation has occurred.