Kell v. Iberville Bank et al

Filing 81

ORDER AND REASONS granting in part and denying in part 37 Motion for Summary Judgment; granting 50 Motion for Partial Summary Judgment. Signed by Judge Carl Barbier on 11/7/2018. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JESSICA KELL

CIVIL ACTION

VERSUS

No. 17-1527

IBERVILLE BANK, ET AL.

SECTION: “J”(3)

ORDER AND REASONS
Before the Court are a Motion for Summary Judgment (Rec. Doc. 37) and a
Motion for Partial Summary Judgment (Rec. Doc. 50) filed by Defendants, Iberville
Bank, through its successor The First, A National Banking Association, and The First
Bancshares, Inc. The Parties have briefed the former (Rec. Doc. 37) extensively; both
Parties have been given leave to file supplemental memoranda. The motion for partial
judgment (Rec. Doc. 50) is limited to causation of certain damages and is unopposed,
so it will be GRANTED. Having considered the Motion and legal memoranda, the
record, and the applicable law, the Court finds that Defendant’s Motion for Summary
Judgment (Rec. Doc. 37) should be GRANTED IN PART and DENIED IN PART.

FACTS AND PROCEDURAL BACKGROUND
This case involves the termination of a bank’s regulatory compliance officer,
allegedly motivated in part by a desire to retaliate against the officer for
whistleblowing on a fraud committed by an employee at the bank. The bank, Iberville
Bank, is now defunct; its successor is The First, A National Banking Association.

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From 1931 until 2017, Iberville bank was owned by A. Wilbert’s Sons Lumber and
Shingle Inc. 1 (“Lumber and Shingle”). (Rec. Doc. 44 at 1).
Beginning around 2008, Iberville Bank began experiencing safety and
soundness issues. According to the CEO and chairman of Lumber and Shingle, Klein
Kirby, the bank owners did not receive a dividend from 2009 to 2011. (Rec. Doc. 44 at
2). On May 20 of 2010—amid these problems—Iberville Bank hired Plaintiff Jessica
Kell as the bank’s Compliance Officer and Bank Secrecy Act (“BSA”) Compliance
Officer (Rec. Doc. 44 at 3). As BSA Compliance Officer, Plaintiff was responsible for
the supervision and administration of the bank’s compliance with anti-money
laundering laws, including the BSA. Among other things, the BSA requires financial
institutions to report suspicious activities that might signify criminal conduct. See 31
U.S.C. §§ 5311-5330. Federal regulations clarify that banks are required to submit a
suspicious activity report (“SAR”) to the Treasury’s Financial Crimes Enforcement
Network (“FinCEN”) if the bank detects insider abuse involving any amount within
30 days of discovering the conduct. 12 C.F.R. § 353.3.
The record indicates, and Defendants do not dispute, that between 2010 and
2014 Plaintiff received excellent ratings in her performance evaluations. In February
of 2014, Plaintiff was promoted to Vice President and she received her first bonus at
the end of 2015 for her performance. (Rec. Doc. 44 at 4-5). Robert Smith, the President

As its name suggests, A. Wilbert’s Sons Lumber and Shingle Inc. was incorporated in the 19th century
by cabinet maker Anton Wilbert. Approximately 180 of the German immigrant founder’s descendants
own Lumber and Shingle today. Klein Kirby is Anton’s direct descendent. (Rec. Doc. 44 at 1-2)
1

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and CEO of Iberville Bank, testified that “Jessica Kell is one of the brightest people I
know” and noted that her job performance is “[a]lways good.” (Rec. Doc. 44 at 5).
On September 15, 2015, Smith became aware of a loss in the insurance division
of the bank—Iberville Insurance Agency, a wholly-owned subsidiary. (Rec. Doc. 44
at 5). The manager of the division, Robert Martin, was covering up that premiums on
a policy insuring buses were uncollectible. The auditors who had discovered the loss
found that receivables were being booked as negative payables. (Rec. Doc. 44 at 5). In
total the bank lost $764,362.87. Plaintiff argues Martin was an insider of Iberville
Bank. Thus, under the BSA, Iberville Bank was required to file an SAR within 30
days of discovering the loss. See 12 C.F.R. § 353.3(b).
However, Smith did not inform Plaintiff of the loss until October 19, 2015. (Rec.
Doc. 44 at 6). Smith informed the Board of the loss the next day. Plaintiff testified
that after the loss she found Smith to be less forthcoming with information and that
she began to unexpectedly receive criticism from Smith regarding her performance,
a first. (Rec. Doc. 44 at 6). She also testified in her deposition that Smith told her not
to file a SAR with local law enforcement, despite a recommendation in the federal
regulations that a bank do so in that circumstance. (Rec. Doc. 40-5 at 31-32). 12 C.F.R.
§ 353.3 (“A bank is encouraged to file a copy of the suspicious activity report with
state and local law enforcement agencies where appropriate.”).
On November 16, 2015, regulators began the FDIC Compliance and
Community Reinvestment Act exam. The Safety and Soundness exam began on
December 7, 2015. On January 20, 2016, Smith informed Plaintiff that she could no

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longer work from home and reminded her that she was “an at-will employee, meaning
that the Bank or [Plaintiff] may terminate the employment relationship at any time.”
(Rec. Doc. 40-3 at 56). A week later, the bank rehired Jeannie Guillory with the
intention she become the new BSA Officer. (Rec. Doc. 44 at 5). On February 5, 2016,
regulators informed in bank in its exit interview for the Safety and Sound exam that
the bank was not completing its obligations under the BSA in a satisfactory manner.
(Rec. Doc. 44 at 8). A reason for this was that SARs were not being filed timely, which
contributed to the evaluator’s conclusion that “[t]he BSA Office is unable to devote
sufficient time to BSA-related duties because of other significant duties at the bank.”
(Rec. Doc. 40-5 at 64).
On February 22, 2016, the bank placed Plaintiff on a 90-day probation,
purportedly because of the bank’s poor performance on the compliance and safety and
soundness exams. (Rec. Doc. 44 at 9). That same day, Plaintiff called the FDIC
ombudsman by dialing an 800 number. (Rec. Doc. 40-5 at 241-242). Plaintiff recalls
that during her 26-minute phone call, she summarized the events described above
and said that she believed the bank was attempting a cover-up of some type. (Rec.
Doc. 44 at 9). On March 2, after a phone call with a special agent at the FDIC, Plaintiff
e-mailed to that agent over 400 pages of documents concerning the loss in the
insurance division. (Rec. Doc. 40-5 at 51). Plaintiff had stored these documents on the
cloud.
On March 11, 2016, the bank’s IT manager, Robin Pitre, discovered that
Plaintiff had stored these documents on the cloud. (Rec. Doc. 44 at 10). Plaintiff knew

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that Pitre would have to report this as a security violation but asked whether Pitre
would have to report the names of the files. (Rec. Doc. 40-5 at 24). The names on the
files stored in the cloud revealed that they related to the insurance loss. Pitre took
screen shots of the names of the documents. When Pitre met with Charlette Williams,
Plaintiff’s supervisor and Smith the following week, Pitre did not bring screenshots
of the file names with her to the meeting. However, she was under the impression
Smith was familiar with the screen shots. (Rec. Doc. 40-8 at 5).
Plaintiff discovered that Smith and Williams also had been granted access to
her Outlook account. It is unclear whether this access extended beyond the calendar
to Plaintiff’s e-mail from which Plaintiff had sent the documents to the FDIC. (Rec.
Doc. 45-2 at 4-5).
On March 14, 2016, Smith called Plaintiff to inform her that she was being put
on paid leave of absence, so the Bank could investigate her storing the documents on
the cloud. During this conversation, Smith allegedly said that he “had never known
the FDIC to circumvent senior management.” (Rec. Doc. 44 at 10-11).

Smith

terminated Plaintiff’s employment on March 17, 2016, “because [Plaintiff] breached
the Bank’s IT policy while on probation as a result of the FDIC’s and OFI’s criticism
of her performance as the bank’s BSA officer.” (Rec. Doc. 37-1 at 7).
Plaintiff filed suit on February 22, 2017. In her amended complaint, Plaintiff
alleges that Iberville Bank illegally retaliated against her for providing information
to the FDIC in violation of 12 U.S.C. § 1831j(a) and 31 U.S.C. § 5328. Plaintiff also
claimed Defendant was liable under Louisiana Civil Code article 2315 for outrageous

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and harassing conduct that caused her undue humiliation, embarrassment, and
anxiety. (Rec. Doc. 12). Defendant then filed its Motion for Summary Judgment.

PARTIES’ ARGUMENTS
Defendant argues that Plaintiff’s whistleblower claim is subject to summary
judgment because Plaintiff cannot prove that Smith knew of her decision to contact
the FDIC regarding the alleged coverup. Defendant alleges that Plaintiff simply has
no proof that Smith knew she had contacted the FDIC when the bank terminated her.
Second, Defendant argues that only one whistleblower statue can apply, and because
12 U.S.C. § 1831j does apply, 31 U.S.C. § 5328 does not. Finally, Defendant argues
that ordinary employment disputes do not give rise to a claim for infliction of
emotional distress claim, and that Plaintiff cannot prove a pattern of repeated
harassment. (Rec. Doc. 37-1 at 2-3).
Plaintiff argues that the record indicates that there are questions of fact as to
whether Smith knew of Plaintiff’s protected activity at the time of termination.
Plaintiff argues that she was placed on leave so that the Bank could investigate her
placing the insurance loss documents on the cloud. Furthermore, Plaintiff argues that
Smith’s comment that he “had never known the FDIC to circumvent senior
management” at the March 14, 2016 meeting gives rise to the inference that Smith
knew why Plaintiff had placed these documents on the cloud. Plaintiff also points to
Smith’s alleged access to her e-mail as another way Smith knew she was
communicating with the FDIC. Plaintiff also points to the temporal proximity of her

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firing and the protected activity as circumstantial evidence of the bank’s motivations
for terminating her. Finally, Plaintiff argues that Defendant has failed to
demonstrate with clear and convincing evidence that Defendant had a legitimate,
non-retaliatory reason for firing her. (Rec. Doc. 14-16), Plaintiff also alleges that there
are questions of fact as to whether Defendant violated a state whistleblower statute.
Finally, Plaintiff argues that the circumstances of this employment dispute are
sufficient to support an infliction of emotional distress claim, because Smith knew
she was pregnant and that the day after she was put on probation, she miscarried. 2
In its reply, Defendant argues that the file names do not prove that Smith
knew that the files were being provided to a third party and points out that the
evidence provided indicates that Smith at most had access to Plaintiff’s Outlook
calendar, not her e-mails.
Finally, in supplemental briefing (Rec. Doc. 60), Plaintiff cites to deposition
testimony of Jeannie Guillory—who was re-hired by Iberville Bank to be BSA
compliance officer—indicating that Plaintiff had told her before Plaintiff was
terminated that she was going to complain to the FDIC. Defendant argues that this
evidence does not give rise to a permissible inference that Smith—the ultimate
decision maker—knew that Plaintiff had actually gone forward with the complaint.
(Rec. Doc. 66).

Defendant’s Motion for Partial Summary Judgment (Rec. Doc. 50) seeks summary judgment on the
issue of causation of the miscarriage. In her response, (Rec. Doc. 57), Plaintiff indicates that she does
not intend to argue that Iberville Bank caused her miscarriage, but she reserves the right to offer
evidence of miscarriage to demonstrate the egregiousness of Iberville Bank’s conduct.

2

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STANDARD OF LAW
Summary judgment is appropriate when “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)), Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a
dispute as to any material fact exists, a court considers “all of the evidence in the
record but refrains from making credibility determinations or weighing the evidence.”
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th
Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but
a party cannot defeat summary judgment with conclusory allegations or
unsubstantiated assertions. Little, 37 F.3d at 1075. A court ultimately must be
satisfied that “a reasonable jury could not return a verdict for the nonmoving party.”
Delta, 530 F.3d at 399.
If the dispositive issue is one on which the moving party will bear the burden
of proof at trial, the moving party “must come forward with evidence which would
‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’” Int'l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmoving
party can then defeat the motion by either countering with sufficient evidence of its
own, or “showing that the moving party’s evidence is so sheer that it may not
persuade the reasonable fact-finder to return a verdict in favor of the moving party.”
Id. at 1265.

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If the dispositive issue is one on which the nonmoving party will bear the
burden of proof at trial, the moving party may satisfy its burden by merely pointing
out that the evidence in the record is insufficient with respect to an essential element
of the nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden then shifts
to the nonmoving party, who must, by submitting or referring to evidence, set out
specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may
not rest upon the pleadings but must identify specific facts that establish a genuine
issue for trial. See, e.g., id. at 325; Little, 37 F.3d at 1075.

DISCUSSION

I.

PLAINTIFF’S § 1831J CLAIMS
The Financial Institutions Reform, Recovery and Enforcement Act of 1989

(“FIRREA”) forbids banks from terminating or discriminating against employees for
providing information to federal agencies regarding the violation of law by the bank
or its employees. 12 U.S.C. § 1831j. The whistleblower provision provides its own
cause of action to the employee who is discriminated against. 12 U.S.C. § 1831j(b).
The burden of proof for such a claim is provided by cross-reference to the
Whistleblower Protection Act (“WPA”), 5 U.S.C. § 1221, which states:
The employee may demonstrate that the disclosure or protected activity
was a contributing factor in the personnel action through circumstantial
evidence, such as evidence that—
(A) the official taking the personnel action knew of the disclosure
or protected activity; and
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(B) the personnel action occurred within a period of time such
that a reasonable person could conclude that the disclosure or
protected activity was a contributing factor in the personnel
action.
The WPA also provides the defending entity with an opportunity to rebut; remedy is
not allowed “if, after a finding that a protected disclosure was a contributing factor,
the [bank] demonstrates by clear and convincing evidence that it would have taken
the same personnel action in the absence of such disclosure.” 5 U.S.C. § 1221(2). Thus,
to succeed the plaintiff must prove that she made a protected disclosure and that the
disclosure was a “contributing factor” to the decision to terminate or discriminate
against her. Primes v. Par. Nat. Bank, No. CIV. A. 93-3737, 1995 WL 241853, at *5
(E.D. La. Apr. 24, 1995). “A contributing factor means any factor which alone, or in
connection with other factors, tends to effect, in any way, the outcome of the decision.”
Id. If the plaintiff succeeds in establishing a prima facie case the burden shifts to the
defendant to demonstrate by clear and convincing evidence that the defendant would
have acted in the same way even if it had not known of any protected disclosure. Id.
Here, it appears that the Parties agree that an employee of the bank possibly
violated the law and Plaintiff made her first protected disclosure regarding this
conduct on February 22, 2016, in her phone call to the FDIC. 3 Nevertheless,
Plaintiff does not appear to argue that the filing of internal reports, such as SARs, constituted
protected disclosures. See Hill v. Mr. Money Fin. Co., 491 F. Supp. 2d 725, 735–36 (N.D. Ohio 2007)
(rejecting the plaintiff’s position that internal reports could constitute protected disclosure under 1831j
or 5328(a)). Nor does Plaintiff suggest that Defendant can be liable under 12 U.S.C. § 1831j for
employment decisions made prior to the February 22 phone call, such as the bank’s decision to place
Plaintiff on 90-day probation. See id. at 733 (finding that federal whistleblower statutes clearly only
apply to employment decisions made after a protected disclosure).
3

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Defendant argues that Plaintiff cannot make a prima facie case that this disclosure
contributed to the bank’s decision to discharge her because the decision-maker,
Smith, did not know of any of Plaintiff’s protected disclosures. 4 Defendant argues that
the conjunctive “and” in the above quoted section of 5 U.S.C. § 1221 requires that
Plaintiff show temporal proximity between the employment decision and the
disclosure and present independent evidence that the decisionmaker knew of the
disclosures. See Rouse v. Farmers State Bank of Jewell, Iowa, 866 F. Supp. 1191, 1209
(N.D. Iowa 1994) (“[T]he plaintiff under this whistle-blower statute must establish
both temporal proximity and actual or constructive knowledge of the defendant of the
disclosures at the time of the employment decision to meet the ‘contributory factor’
test.”). Although, the preceding phrase, “such as,” lends doubt to Defendant’s
preferred interpretation, the Court assumes arguendo that Plaintiff cannot rely only
on temporal proximity evidence alone to prevail. 5

In addition to the February 22 phone call, Plaintiff also had telephone conversations with someone
at the FDIC Ombudsman’s office on February 27, 2016 and with a special agent at the FDIC on March
1, 2016. Plaintiff then e-mailed documents to the same special agent on March 2, 2016. (Rec. Doc. 371 at 8). Each of these communications constitutes a protected disclosure.
5 Of course, it is indisputable that “[i]f an employer is unaware of an employee's protected conduct at
the time of the adverse employment action, the employer plainly could not have retaliated against the
employee based on that conduct.” Chaney v. New Orleans Pub. Facility Mgmt., Inc., 179 F.3d 164, 168
(5th Cir. 1999). The issue is by what circumstantial evidence a plaintiff must prove the decision
maker’s knowledge. In finding that temporal evidence alone could not support a prima facie case, the
Rouse court relied upon Wagner v. E.P.A., 51 M.S.P.R. 337 (M.S.P.B. Nov. 21, 1991), aff'd, 972 F.2d
1355 (Fed. Cir. 1992). However, in Wagner the Merit Systems Protection Board noted that the “timing
of the appellant’s evaluation was in virtually no way within the control of agency officials . . . [t]herefore
under the circumstances of this appeal, it does not follow that a ‘reasonable person could conclude from
proximity in time that the disclosure was a factor in the personnel action.’” Id. at 346. (citation
omitted). In fact, the Board, which reviews WPA claims often, has held that “the knowledge/timing
test is not the only way for an appellant to satisfy the contributing factor standard; rather, it is only
one of many possible ways to satisfy the standard.” Dorney v. Dep't of Army, 117 M.S.P.R. 480, 486
(M.S.P.B. Mar. 6, 2012). Given the case law cited, the Court declines to hold that temporal evidence
alone could never be sufficient evidence that a protected disclosure was a contributing factor in an
employment decision.
4

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Even so, Plaintiff has made her prima facie case because the temporal
proximity and other evidence submitted, considered together, give rise to the
reasonable inference that Smith knew of Plaintiff’s disclosures and that this
knowledge contributed to his decision to terminate Plaintiff. First, it is undisputed
that Defendant regarded Plaintiff as an excellent employee before late 2015; around
the same time that Defendant became aware of the loss in the insurance division—
the subject of Plaintiff’s protected disclosures. From the time she started till 2014,
Plaintiff never received a performance evaluation of less than 8.55 out of 9 available
points. (Rec. Doc. 44 at 4-5). Already, this distinguishes this matter from one of the
two district court opinions Defendant relies upon. See Cosgrove v. Fed. Home Loan
Bank of New York, No. 90 CIV. 6455 (RPP), 1999 WL 163218, at *9 (S.D.N.Y. Mar.
23, 1999) (“Plaintiff's claim that she was an ‘exemplary’ employee throughout her
employment at FHLBNY is belied by the evidence submitted by both parties”).
Second, Defendant does not contest that Plaintiff’s disclosures are close in time
to Defendant’s adverse employment decisions. Plaintiff sent the documents relating
to the insurance loss on March 2, 2016. The bank learned that Plaintiff had placed
these same documents on the Cloud on March 11. Three days later, Defendant placed
Plaintiff on leave and three days after that, on March 17, the bank terminated
Plaintiff. The Fifth Circuit has found that two full years elapsing between protected
conduct and retaliatory discharge renders a “theory of retaliation quite doubtful” but
is not dispositive. Chaney v. New Orleans Pub. Facility Mgmt., Inc., 179 F.3d 164, 169
(5th Cir. 1999) (considering alleged unlawful retaliation under 42 U.S.C. § 2000e-3)).

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In contrast, the close temporal proximity in this case—a matter of weeks—is evidence
that Plaintiff’s disclosures were a contributing factor in Defendant’s personnel
decisions.
Third, Plaintiff has submitted other circumstantial evidence that Defendant
knew of Plaintiff’s disclosures. Defendant’s proffered reason for firing Plaintiff is that
Plaintiff, while on probation, violated the bank’s IT policy by placing documents on
the cloud. Storing these documents on an outside, unauthorized server was a security
violation, which Plaintiff admits. (Rec. Doc. 37-1). However, Defendant makes no
attempt to address the fact that these were the same documents that Plaintiff sent to
the FDIC in her whistleblowing e-mail. The names of the documents—visible in
screen shots taken by the bank’s IT staff member on March 11—clearly convey that
they pertain to the insurance loss. (Rec. Doc. 45-2 at 3). Defendant suggests that
Smith’s knowledge that Plaintiff had stored these documents outside of Defendant’s
servers is not proof that Smith knew that Plaintiff had sent this information to the
FDIC. The Court agrees that it is not conclusive proof, but the fact that the bank’s
compliance officer had made a move to preserve evidence of wrongdoing at the bank
would certainly suggest that Plaintiff was disclosing this same information to the
appropriate federal agencies.
Plaintiff also provides copies of notes she took regarding the March 14, 2016
meeting, when Smith put her on leave of absence to investigate her storing documents
on the cloud. (Rec. Doc. 40-5 at 59). The note indicates that Plaintiff recalls Smith
stating that “he’s never known the FDIC to circumvent senior management for

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investigation.” (Rec. Doc. 40-5 at 59). Again, while inconclusive in and of itself, it is
circumstantial evidence that Smith knew Plaintiff’ was cooperating with the FDIC
when he decided to put her on leave.
Defendant insists that what is offered above is not enough to withstand
summary judgment. Defendant relies on two district court opinions which found that
plaintiffs had failed to establish that the defendants knew of protected disclosures.
Both are easily distinguishable. In Rouse v. Farmers State Bank of Jewell, Iowa, the
court found that the plaintiff had demonstrated temporal proximity but had failed to
demonstrate that the defendant had any knowledge of the protected disclosures. 866
F. Supp. 1191, 1209 (N.D. Iowa 1994). Quite clearly, the reason Defendant failed this
burden was because he could not show that anyone other than himself or the FDIC
knew of his disclosures. Id. at 1209. Because the plaintiff in that case had not told
anyone else he was disclosing to the FDIC, the court determined it could only find
that the disclosures contributed to the defendant’s personnel action if the FDIC had
breached its promises of confidentiality. There was simply no evidence that it had.
Id.
Similarly, the other case Defendant relies upon, Cosgrove v. Fed. Home Loan
Bank of New York, does not resemble the facts of this case. No. 90 CIV. 6455 (RPP),
1999 WL 163218, at *11 (S.D.N.Y. Mar. 23, 1999). There, the court began by finding
that the plaintiff had been at most a “satisfactory” employee and then found the
protected disclosures and termination—separated by 16 months—were not
temporally proximate. Id. at 8-10. The court ended its opinion by finding that the

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Defendant had proved by clear and convincing evidence that the plaintiff had been
fired for her lack of interpersonal skills and for the poor quality of her work, as
demonstrated by many internal reviews. Id. at 13 (quoting from an evaluation
complaining that “plaintiff did not present information in a logical manner and basic
information often was missing in work papers.”). In between these findings the court
noted that the plaintiff had failed to provide “any evidence from which it can be
inferred that those responsible for her termination were aware of any whistleblowing
activities by plaintiff during this period.” Id. at 11.
Here, applying the Rouse court’s disjunctive analysis, the court finds that at
the summary judgment stage the court must make the reasonable inference that
Smith knew that Plaintiff had made protected disclosures and that this factored in
the decision to terminate Plaintiff. Unlike in Rouse, it is undisputed that Plaintiff
informed a co-worker of the Defendant that she intended to make a protected
disclosure. (Rec. Doc. 66). Moreover, it is Defendant’s position that Smith fired
Plaintiff for storing the documents she had delivered to the FDIC on the Cloud. Smith
did so only after an “investigation” into Plaintiff’s conduct. The Court must infer then
that Smith knew what documents Plaintiff was storing off-site and must also infer
that Smith understood this act by Plaintiff to mean that Plaintiff was acting as a
whistleblower.
Having found that Plaintiff has staked out a prima facie case, the Court must
determine whether Defendant has proved by clear and convincing evidence that it
still would have terminated Plaintiff regardless of Plaintiff’s disclosures. The Court

15

finds that the Defendant falls short of satisfying this tall burden. As the Court has
already explained above, this case does not resemble Cosgrove. There, Defendant
demonstrated with extensive citation to performance evaluations and affidavits that
the Plaintiff put in below satisfactory work and clashed with co-workers for a period
of about 16 months. Cosgrove, 1999 WL 163218, at *10. Similarly, in Mann v. Fifth
Third Bank, the court was convinced that the defendant had indeed fired the plaintiff
for what were clearly inappropriate e-mails. No. 1:09-CV-014, 2011 WL 1575537, at
*6 (S.D. Ohio Apr. 25, 2011).
Here, Defendant alleges it put Plaintiff on probation because of criticism of the
bank’s BSA program, and that it terminated her for violating the bank’s IT policy.
(Rec. Doc. 37-1 at 14-15). However, Plaintiff asserts that the bank’s BSA program was
criticized because she was prevented from doing her job due to the bank’s resistance
to providing her relevant information in a timely fashion. (Rec. Doc. 44 at 7). She also
alleges that she was terminated because of the content of the information she saved
onto the cloud, not for the act itself. (Rec. Doc. 44 at 16). Unlike in the cited cases
where the employers had persuasive reasons for firing that were independent of any
whistleblower activity, here it is unclear who is at fault for the bank’s poor
performance on the BSA examination. That is something the trier of fact will need to
decide. Considering Plaintiff’s record of exemplary performance, the temporal
proximity, and the other circumstantial evidence provided by Plaintiff, the Court is
not convinced that Plaintiff was terminated for the reasons that Defendant provides.
Summary judgment is inappropriate.

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II.

PLAINTIFF’S LOUISIANA WHISTLEBLOWER CLAIM
In its opposition, Plaintiff asserts that Defendant personnel decisions violated

the Louisiana Whistleblower Statute, La. R.S. 23:967. Defendant argues this Court
should not consider a claim not raised in the complaint. However, the Fifth Circuit
has held: “Under our precedent, when a claim is raised for the first time in response
to a summary judgment motion, the district court should construe that claim as a
motion to amend the complaint under Federal Rule of Civil Procedure 15(a).” Riley v.
Sch. Bd. Union Par., 379 F. App'x 335, 341 (5th Cir. 2010). Rule 15(a) states that “a
party may amend its pleading only with the opposing party's written consent or the
court's leave. The court should freely give leave when justice so requires.” Fed. R. Civ.
P. 15. Leave is by no means automatic. Addington v. Farmer's Elevator Mut. Ins. Co.,
650 F.2d 663, 666 (5th Cir. 1981) ([T]he decision to grant or to deny . . . leave to amend
lies within the sound discretion of the trial court.”) “In deciding whether to grant
leave to file an amended pleading, the district court may consider such factors as
undue delay, bad faith or dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue prejudice to the
opposing party, and futility of amendment.” Wimm v. Jack Eckerd Corp., 3 F.3d 137,
139 (5th Cir. 1993).
Plaintiff, who is represented by counsel, was given leave to amend her
complaint in June of 2017. Plaintiff filed her opposition, raising this new state law
claim over a year later. Courts have found that allowing amendment would unduly

17

prejudice defendants where it would be necessary to reopen discovery, reexamine
witnesses, and cause defendants to undergo additional litigation costs. See, e.g., Riley
v. Union Par. Sch. Bd., No. CIV.A. 09-0319, 2010 WL 3245136, at *4 (W.D. La. Aug.
16, 2010). At first glance, one might assume that Louisiana’s whistleblower statute
is sufficiently similar to its federal counterpart that amendment would not require
additional discovery or otherwise disrupt these proceedings. Section 967 prohibits an
employer from retaliating “against an employee who in good faith, and after advising
the employer of the violation of law: . . . [d]iscloses or threatens to disclose a workplace
act or practice that is in violation of state law.”
However, Louisiana courts have interpreted Louisiana’s whistleblower statute
to place rather sever limitations on who can bring a claim. Besides for the obvious
addition of a notice requirement, Louisiana courts have also held that the state law
action is only available to plaintiffs who know of an actual violation of state law. Hale
v. Touro Infirmary, 886 So. 2d 1210, 1215 (La. App. 4 Cir. 11/3/04) (“[T]he
Whistleblower Statute only offers protection to a specific class of employees: those
employees who face “reprisals” from their employers based solely upon an employee’s
knowledge of an illegal workplace practice and his refusal to participate in the
practice or intention to report it.”). Thus,
[I]n order to prevail, [Plaintiff] must establish that (1) [Defendant]
violated the law through a prohibited workplace act or practice; (2) she
advised [Defendant] of the violation; (3) she threatened to disclose [or
disclosed] the practice; and (4) she was fired as a result of her refusal to
participate in the unlawful practice or threat to disclose the practice.

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Hale, 886 So. 2d at 1216. In contrast, 12 U.S.C. §1831j protects an employee who
discloses “a possible violation of any law.” Thus, allowing Plaintiff to add a state law
whistleblower claim would expand the scope of the litigation to include the
determination of whether the conduct of a third party, the manager of the bank’s
insurance division—constituted bank fraud or theft. 6 The Court declines Plaintiff’s
implicit request to expand the scope of this litigation at this late hour.

III.

PLAINTIFF’S REDUNDANT FEDERAL WHISTLEBLOWER CLAIM
Defendant points out that 31 U.S.C. § 5328 states that it “shall not apply with

respect to any financial institution or nonfinancial trade or business which is subject
to section 33 of the Federal Deposit Insurance Act.” This carve out applies in cases
like this one, where this whistleblower statute would be redundant with 12 U.S.C. §
1831j. Accordingly, summary judgment is appropriate as to this claim.

IV.

PLAINTIFF’S INFLICTION OF EMOTIONAL DISTRESS CLAIM
Plaintiff brings both intentional and negligent infliction of emotional distress

claims. The Louisiana Supreme Court has affirmed that Civil Code article 2315 is
sufficiently flexible to allow for an intentional inflectional of emotional distress claim,
as that cause of action appears in the common law. White v. Monsanto Co., 585 So. 2d
1205, 1209 (La. 1991) (“One who by extreme and outrageous conduct is intentionally
causes severe emotional distress to another is subject to liability for such emotional
From the record it appears that the individual responsible for the insurance loss was never convicted
of anything, although he did apparently pay restitution.

6

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distress, and if bodily harm to the other results from it, for such bodily harm.”) To
succeed on an intentional claim, Plaintiff must prove: “(1) that the conduct of the
defendant was extreme and outrageous; (2) that the emotional distress suffered by
the plaintiff was severe; and (3) that the defendant desired to inflict sever emotional
distress or knew that severe emotional distress would be certain or substantially
certain to result from his conduct.” Id. For an employer’s actions to qualify as
“extreme and outrageous” they must be truly extraordinary. See Nicholas v. Allstate
Ins. Co., 765 So. 2d 1017, 1027 (La. 2000) (collecting cases). Moreover, Louisiana
“jurisprudence has limited the cause of action to cases which involve a pattern of
deliberate, repeated harassment over a period of time.” Id. at 1026.
Due to this limitation, plaintiffs bringing workplace emotional distress claims
have tended to succeed only in exceptional cases, such as where a plaintiff has
demonstrated a long pattern of severe abuse that has culminated in a threat to the
employee’s personal safety. See, e.g., Bustamento v. Tucker, 607 So. 2d 532 (La. 1992)
(finding extreme and outrageous conduct where an employee was subjected to
constant improper sexual comments and advances, was threatened with physical
violence, and was almost run over by a forklift), Walters v. Rubicon, Inc., 706 So. 2d
503 (La. App. 1 Cir. 1997) (finding extreme and outrageous conduct where supervisors
constantly verbally abused plaintiff, ordered plaintiff to ignore company policy in
possible violation of law, harassed plaintiff with phone calls, endangered plaintiff and
plaintiff’s son in traffic, and gestured that plaintiff would be shot).

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Obviously, this case does not resemble those. The only act that Plaintiff alleges
caused her emotional distress is her termination—distressing because it was made
without justification. Normally, a personnel decision, even if it is wrong, does not give
rise to an intentional infliction of emotional distress claim. See Nicholas, 765 So, 2d
at 1027 (citing Smith v, Ouchita Par. Sch. Bd., 702 So. 2d 727, 738 (La. App. 2 Cir.
1997)). However, Plaintiff argues that her termination was extreme and outrageous
due to her particular vulnerability. She alleges in her opposition that she suffered a
miscarriage around the time she was fired. She further alleges that Smith knew this
because she informed Smith of a surgery she was required to undergo in the wake of
the miscarriage. (Rec. Doc. 44 at 20). The procedure required general anesthesia and
Plaintiff told Smith about it because she needed to take two days off work undergo
it. 7
Indeed, Louisiana courts have recognized that, “Where the actor has
knowledge of another’s particular susceptibility to emotional distress, the actor’s
conduct should not be judged in light of the effect such conduct would have on a person
of ordinary sensibilities.” Wright v. Otis Eng’g Corp. 643 So. 2d 484, 487 (La. App. 3
Cir. 1994). The Louisiana Third Circuit applied this rule in Wright v. Otis
Engineering Corp., a case where an employer allegedly berated his employee with
profanity-laden tirades daily, and threatened her job often, for a period of five years.
Id. The Court found that the trier of fact was required to consider the plaintiff’s claims

Plaintiff is rather equivocal about what she alleges Smith knew. She states she “believes she told
Smith about a visit with her OB/GYN.” (Rec. Doc. 44 at 19-20). It is unclear whether Plaintiff alleges
she informed Smith of the nature of the procedure when she asked for leave, but for purposes of this
Order, the Court assumes that Smith was fully informed.
7

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while keeping in mind the plaintiff’s allegation that the defendant had full knowledge
of the plaintiff’s “deteriorating mental condition, his hospitalization, and his shock
treatment for depression.” Id. However, while the court implied that the plaintiff’s
susceptibility to emotional distress lessened the necessary severity of the conduct for
plaintiff to make a claim, the court did not find the plaintiff did not need to
demonstrate a pattern of outrageous conduct. Id.
Here, the facts alleged do not permit an inference of a pattern of abuse—which
Louisiana courts require a plaintiff to prove in a workplace intentional infliction of
emotional distress claim. Almerico v. Dale, 927 So. 2d 586, 592 (La. App. 5 Cir. 2006).
The Court accepts that Plaintiff was particularly susceptible to emotional distress
because of her miscarriage. But while that finding lowers the bar for what conduct
may qualify as extreme, it does not eliminate Plaintiff’s burden to establish a pattern
of “deliberate, repeated harassment over a period of time.” Id. Plaintiff does not allege
that Smith ever acted in an abusive manner towards her. 8 Nor does Plaintiff cite any
case law suggesting that a termination which may violate whistleblower protections,
is conduct that is “beyond all possible bounds of decency” and “atrocious and utterly
intolerable in a civilized community.” Id. Based on the record and the jurisprudence
provided, the Court finds that the Plaintiff as failed to establish the first element.

It bears mention that the Louisiana Supreme Court has found behavior that is well beyond the
bounds of normal professionalism not to rise to the level of “extreme.” See White, 585 So. 2d at 1207
(finding supervisor’s conduct not extreme and outrageous where supervisor unjustly attacked plaintiff
in a profane tirade that was sufficiently intense to give the plaintiff a panic attack that required the
plaintiff to be hospitalized for two days).
8

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Moreover, Plaintiff fails to support her conclusory allegation that she actually
suffered “severe emotional distress.” (Rec. Doc. 44 at 20); cf. Pate v. Pontchartrain
Partners, LLC, No. CIV.A. 13-6366, 2014 WL 5810521, at *4 (E.D. La. Nov. 7, 2014)
(finding dismissal of intentional infliction of emotional distress claim appropriate
because even assuming that terminating employee in the late stage of pregnancy
could qualify as extreme and outrageous, plaintiff produced no evidence to support
second prong). Plaintiff explicitly references her miscarriage only to demonstrate the
outrageousness of Defendant’s conduct; she does not allege that Defendant’s conduct
caused her miscarriage. (Rec. Doc. 57). It is not enough that Plaintiff was potentially
more vulnerable than an ordinary plaintiff; to satisfy the second element she must
also point to the evidence in the record that demonstrates she suffered severe distress
due to Defendant’s actions. This she has not done. The potions of the deposition
testimony cited by Defendant demonstrate that Plaintiff was “very emotional” upon
being terminated (Rec. Doc. 51-6), but nothing in her testimony suggest the sort of
mental anguish that an intentional infliction of emotions distress claim is intended
to recover for. See Gressett v. Southwest Airlines Company, 216 F. Supp. 3d 743, 749
(E.D. La. 2017) (“Geniune humiliation, anxiety, confusion, upset, worry and the like
are typically insufficient.”), Guilbeaux v. Times of Acadiana, Inc. 693 So. 2d 1183,
1187 (La. App. 3 Cir. 1997) (finding “some amount” of humiliation and
embarrassment insufficient for intentional infliction of emotional distress claim).
Plaintiff’s negligent infliction of emotional distress claim similarly fails.
“Under the general rule followed by the great majority of jurisdictions, if the

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defendant’s conduct is merely negligent and causes only mental disturbance, without
accompanying physical injury, illness or other physical consequences, the defendant
is not liable for such emotional disturbance.” Moresi v. State Through Dep’t of Wildlife
& Fisheries, 567 So. 2d 1081, 1095 (La. 19990). Plaintiff notes that the Louisiana
Supreme Court, in Moresi v. State Through Department of Wildlife & Fisheries,
recognized an exception for categories of cases that share an “especial likelihood of
genuine and serious mental distress arising from the special circumstances, which
serves as a guarantee that the claim is not spurious.” Id. Plaintiff again argues that
her miscarriage—close in time to her alleged wrongful termination—places her NIED
claim within the exception recognized for special circumstances. However, Louisiana
courts applying the special circumstances exception recognized in Moresi have found
that recovery for an NIED claim is limited to those cases where the defendant’s
conduct was extreme and outrageous. Covington v. Howard, 146 So. 3d 933, 938 (La.
App. 2 Cir. 2014). The Court has already found that Defendant’s conduct did not rise
to the level of extreme or outrageous workplace behavior.
In any case, Plaintiff has not demonstrated she suffered “genuine and serious
mental distress.” Bonnette v. Conoco, Ind. 837 So. 2d 1219, 1236 (La. 2003). “Although
failure to seek medical treatment for the emotional distress sustained does not by
itself doom a claim for emotional distress damages, it hampers any argument that a
plaintiff was beset by severe anguish.” Gressett, 216 F. Supp. 3d at 749. Even where
plaintiffs provide testimony from a psychiatrist demonstrating depression or anxiety,
that evidence may be insufficient to establish mental distress severe enough to

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warrant application of the special circumstances exception. See Bonnette, 837 So. 2d
at 1236. Here, Plaintiff does not only fail to indicate in her opposition that she ever
saw a doctor or therapist for her alleged emotional anguish, she provides no
supporting evidence whatsoever. Summary judgment is appropriate as to Plaintiff’s
intentional and negligent infliction of emotional distress claims.

CONCLUSION
Accordingly,
IT IS ORDERED that Defendant’s Motion for Summary Judgment (Rec. Doc.
37) is GRANTED IN PART as to Plaintiff’s 31 U.S.C. § 5328, intentional infliction
of emotional distress, and negligent infliction of emotional distress claims; and
DENIED IN PART as to Plaintiff’s 12 U.S.C. § 1831j claim.
IT IS FURTHER ORDERED that Defendant’s Motion for Summary
Judgment (Rec. Doc. 37), as construed as a motion for leave to amend complaint, is
DENIED.
IT IS FURTHER ORDERED that Defendant’s unopposed Motion for Partial
Summary Judgment (Rec. Doc. 50) is GRANTED.
New Orleans, Louisiana, this 7th day of November, 2018.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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