Opinion ID: 718327
Heading Depth: 2
Heading Rank: 1

Heading: The Whistleblower Claim.

Text: 14 Walleri's principal claim is founded on 12 U.S.C. § 1831j. The predecessor of that section was adopted in 1989 as section 932(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Pub.L. No. 101-73, 103 Stat. 183. In the form in which it was then enacted, the provision prohibited [federally] insured depositary institution[s] from discharging or otherwise discriminating against an employee because the employee ... provided information to any Federal Banking agency or to the Attorney General regarding a possible violation of any law or regulation.... Since Walleri was not an employee of a federally insured depositary institution, she would not have been entitled to protection under that section. 15 In 1991, the statute was amended by section 251 of the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub.L. No. 102-242, 105 Stat. 2236. The amendment extended the statute's protection to employees of federal home loan banks. It also for the first time included a definition of the term federal banking agency. The definition included the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Federal Housing Finance Board, the Comptroller of the Currency and the OTS. It did not include FHLBB because, pursuant to the 1989 legislation, FHLBB had been replaced by OTS. Finally, the 1991 amendment also provided that it shall be treated as having taken effect on January 1, 1987.... Thus, the amendment applies to the 1988 and 1989 events about which Walleri complains. 16 Walleri brought § 1831j claims against both FHLBS and OTS. Walleri alleged that FHLBS violated § 1831j by retaliating against her for two reasons: (1) for reporting irregularities and possible illegalities involving Far West to her FHLBS supervisors; and (2) for reporting wrongdoing by Far West, FHLBS, and FHLBB to ORA (the regulatory arm of FHLBB). FHLBS moved for summary judgment on Walleri's § 1831j claim on the grounds that (1) Walleri's reports were not protected under § 1831j because she failed to blow the whistle to an agency listed in the statute; and (2) Walleri could not prove a causal link between her whistleblowing and FHLBS' termination of her employment. The district court held that Walleri's complaint did not allege a valid claim under § 1831j. 17
18 Regarding Walleri's § 1831j claim based on Walleri's reports to her FHLBS supervisors, the district court held that, despite evidence that Walleri had reported wrongdoing to her supervisors at FHLBS, her complaint did not state a valid claim because it did not allege that she reported wrongdoing to FHLBS or that FHLBS retaliated against her in response to those reports. See E.R. at 124-25. In effect, the district court treated defendant's summary judgment motion as a motion to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. 19 Walleri argues that the district court's ruling was in error because the allegations in her fourth amended complaint adequately stated a § 1831j claim based on reports she made to FHLBS. In paragraph eleven of the complaint, Walleri alleged that her examination of Far West--a bank to which FHLBS had agreed to loan 1.5 billion dollars in connection with a Risk Controlled Arbitrage (RCA) program-revealed irregularities, improprieties and possible illegal conduct by Far West. E.R. at 77 (emphasis added). In paragraphs twelve and thirteen, Walleri alleged that she prepared and submitted a report of examination (ROE) presenting those findings. And in paragraphs fourteen and nineteen, she alleged: 20 ... [FHLBS] employee defendants, in order to quiet Walleri, repeatedly discouraged and interfered with the performance of [her] contractual duties through their threats to her that she would be removed as examiner-in-charge and be given an unacceptable performance rating and terminated if she did not delete certain significant exam findings which Far West said were inaccurate, incomplete or false statements. 21 E.R. at 80, Fourth Amended Complaint, p 14. 22 As a result of [her] refusal to agree to the deletion of facts and findings from her report of examination ... and as a result of her whistleblowing [to ORA of FHLBB] ..., [Walleri] was subjected to ... retaliatory treatment [including confrontational meetings and threats, removal as examiner-in-charge of the Far West examination, unacceptable performance ratings, refusal to make use of her when she was available for part-time work, and, ultimately, termination]. 23 E.R. at 81-82, Fourth Amended Complaint, p 19 (emphasis added). 24 FHLBS, on the other hand, argues that the district court correctly ruled that Walleri's complaint failed to allege a claim based on reports to the FHLBS. It relies on paragraph 45 which stated: 25 Defendant [FHLBS] discriminated against [Walleri] with respect to conditions or privileges of employment ... because she provided information to federal banking agencies and the office of the Attorney General regarding possible violations of law or federal regulations by defendant Far West, its officers and directors, and employees of the [FHLBS and FHLBB]. 26 E.R. at 93, Fourth Amended Complaint, p 45 (emphasis added). 27 In general, a complaint is construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). In appraising the sufficiency of the complaint we follow ... the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The court is bound to give the plaintiff the benefit of every reasonable inference to be drawn from well-pleaded facts. See Retail Clerks Local 1625 v. Schermerhorn, 373 U.S. 746, 753 n. 6, 83 S.Ct. 1461, 1465 n. 6, 10 L.Ed.2d 678 (1963). 28 The facts alleged in paragraphs eleven through fourteen and paragraph nineteen of the complaint can reasonably be interpreted as alleging a claim that FHLBS discriminated against her in her employment because she provided information to FHLBS regarding possible illegal conduct by Far West. Although paragraph nineteen emphasizes that she was retaliated against because she would not change the contents of the report she submitted to FHLBS, it would be reasonable to infer that they retaliated against her not solely because she would not change the report, but because she provided [the] information in the report regarding a possible violation of any law or regulation to her FHLBS supervisors in the first place. See 12 U.S.C. § 1831j(a)(2). Thus, the factual allegations in Walleri's complaint adequately stated a § 1831j claim and put FHLBS on notice of her claim against it. 29 Having found that Walleri adequately alleged a § 1831j claim based on her report to FHLBS, we turn to whether the district court should have granted FHLBS's motion for summary judgment on this claim. Viewed in the light most favorable to Walleri, the evidence in the record establishes a triable issue of fact as to whether she was discriminated against in her employment as a result of the reports she submitted to her FHLBS supervisors. The court found, and FHLBS does not dispute, that the evidence shows that Walleri had reported wrongdoing to her supervisors at FHLBS. See CR 301 at 7-8. Moreover, FHLBS apparently does not dispute that FHLBS supervisors ordered Walleri to change her report and threatened to remove her from her position as examiner-in-charge if she failed to do so, that Walleri received unfavorable reviews after submission of her report, and that FHLBS ultimately discharged Walleri. The issue in dispute is whether Walleri produced sufficient evidence to raise a triable issue of fact as to whether FHLBS' stated reason for discharging Walleri was a pretext for retaliation. We find that she has. 30 FHLBS contends that it discharged Walleri because Walleri's leave of absence lasted longer than 90 days, and FHLBS' disability leave of absence policy required the termination of any employee whose leave exceeded 90 days. Walleri first submitted a letter from her doctor requesting medical leave on January 24, 1989. Walleri went on leave at that time. On April 11, 1989, Walleri submitted to FHLBS a letter from her doctor advising FHLBS that Walleri could return on a part-time basis but had to remain in the Portland area to continue treatment. On April 13, 1989, Walleri received a letter from Foltos of FHLBS stating that FHLBS did not have part-time work for Walleri at that time, but that she could begin part-time work in the beginning of May. On May 8, 1989, Walleri returned to work as instructed, but after completing all available part-time work she was sent home. The same occurred the next day. On the third day, May 10, 1989, FHLBS informed Walleri by letter that it had run out of work that could be done on a part-time schedule and she was therefore being returned to leave status. By the beginning of June, Walleri's leave of absence had exceeded 90 days. However, Walleri produced evidence that about that time she went to the FHLBS office and left a message for a supervisor, Mike Cline, that her doctor was releasing her to return to work full-time. See E.R. at 217-18. According to the deposition testimony of FHLBS Personnel Director, Lee Foltos, she and Mike Cline were aware of Walleri's message when the decision to terminate Walleri was made. Id. Foltos testified that when they were unable to reach Walleri by phone to confirm the message, she suggested to Mike Cline that Cline write a letter to Walleri about the possibility of her returning to work. Id. at 218-19. Cline failed to write the letter, however, and FHLBS proceeded to terminate Walleri on June 6. 31 We find that the testimony that FHLBS management was aware of Walleri's message that she was available to return to work full-time, yet discharged her for overstaying her leave, raises a triable issue of fact as to whether the reason given for her termination was a pretext. 32 We conclude that FHLBS was not entitled to summary judgment on Walleri's § 1831j claim arising out of her reports to her FHLBS supervisors. 33
34 The court below dismissed Walleri's claim that she was discharged in retaliation for making reports to the Office of Regulatory Affairs (ORA) of the Federal Home Loan Bank Board (FHLBB), because the FHLBB, the agency to which Walleri made her report, was not a federal banking agency as defined by the statute. E.R. at 121-25. Walleri urges that to carry out the intent of the act, it should be interpreted to include the FHLBB, as the predecessor of OTS. A contrary interpretation, she argues cogently, would make no sense since it would require her, to be entitled to protection, to have made the report she made in 1988 to OTS, which did not exist at the time. 1 35 While Walleri's argument has appeal, it is insufficient to circumvent the words of the statute. Although we seek to give effect to the will of Congress in construing a statute, we begin with the words of the statute and must construe them according to their plain meaning. See FDIC v. McSweeney, 976 F.2d 532, 537 (9th Cir.1992), cert. denied, 508 U.S. 950, 113 S.Ct. 2440, 124 L.Ed.2d 658 (1993). There is no legislative history to shed light on how Congress came to select the designated agencies; presumably, it did so because they were the only relevant agencies in existence when the statute was drafted. Congress may not have realized that the retroactivity provision in the statute made the definition section incomplete, but it is not for us to cure the deficiency by adding an agency which Congress chose not to-or, in any event, failed to-include. This claim therefore was properly dismissed. Since Walleri's report is not within the ambit of the statute, it is unnecessary to consider other issues raised by the parties. 36 Walleri also sought to assert this claim against OTS. Since OTS was never her employer and since no liability could be imposed on it as successor of FHLBB, which itself had no liability under the statute, that claim was also properly dismissed. E.R. at 51-54. 37