Lutzeier v. Citigroup, Inc. et al

Filing 209

MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that Plaintiffs Motion for Reconsideration of March 2, 2015 Order (ECF Nos. 160 , 172 ) is GRANTED. The Court's March 2, 2015 dismissing Plaintiffs First Cause of Action for Violation of 15 U.S.C. §78u-6(h)(l)(A) is VACATED. IT IS FURTHER ORDERED that Plaintiffs Motion to Compel Documents Withheld Under Bank Examiner's Privilege (ECF No. 174 ) is DENIED without prejudice. Plaintiff shall request the information through the admini strative procedures set forth in the regulations within twenty (20) days of the date of this order. IT IS FINALLY ORDERED that the parties shall submit a proposed amended joint scheduling plan to govern any additional discovery required by the Court's rulings within ten (10) days, if necessary. Signed by District Judge Ronnie L. White on 11/19/2015. (NEB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
FRED LUTZEIER,

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Plaintiff,
vs.
CITIGROUP INC., et al. ,
Defendants.

Case No. 4:14CV183 RLW

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs Motion for Reconsideration of March 2, 2015
Order (ECF Nos. 160, 172) and Plaintiffs Motion to Compel Documents Withheld Under Bank
Examiner' s Privilege (ECF No. 174). These matters are fully briefed and ready for disposition.
DISCUSSION 1
I.

Motion for Reconsideration of March 2, 2015 Order
A. Standard of Review for a Motion for Reconsideration

Under Federal Rule of Civil Procedure 54(b ), a court may reconsider any order not
certified for appeal when the order in question did not resolve all the claims of all the parties in the
action. Rule 54(b) provides as follows :
(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more
than one claim for relief is presented in an action, whether as a claim, counterclaim,
cross-claim, or third-party claim, or when multiple parties are involved, the court
may direct the entry of a final judgment as to one or more but fewer than all of the
claims or parties only upon an express determination that there is no just reason for
delay and upon an express direction for the entry of judgment. In the absence of
such determination and direction, any order or other form of decision, however
designated, which adjudicates fewer than all the claims or the rights and liabilities
of fewer than all the parties shall not terminate the action as to any of the claims or
parties, and the order or other form of decision is subject to revision at any time
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The Court previously provided a factual background of this case in its March 2, 2015 Order, as
well as in orders regarding various motions to compel, and does not repeat that background here.
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before the entry of judgment adjudicating all the claims and the rights and liabilities
of all the parties.

Fed. R. Civ. P. 54(b). Motions to reconsider are governed by Rule 54(b) when such motions are
filed after an interlocutory order and before the entry of a "final judgment." Wells' Dairy, Inc. v.
Travelers Jndern. Co. of Illinois, 336 F. Supp. 2d 906, 908-09 (N.D. Iowa 2004) (citing Gridley v.
Cleveland Pneumatic Co. , 127 F.R.D. 102, 103 (M.D. Pa. 1989)).

"District courts have

considerable discretion in deciding whether to grant a motion to reconsider an interlocutory
order." Wells' Dairy, Inc. , 336 F. Supp. 2d at 909.
As noted by another district court, the standard for reconsideration under Rule 54(b) is not
entirely clear:
Some courts have expressed the lenient standard urged by Plaintiffs. See, e.g. ,
United States v. Renda, 709 F.3d 472, 479 (5th Cir. 2013) ("Rule 54(b) authorizes a
district court to reconsider and reverse its prior rulings on any interlocutory order
for any reason it deems sufficient."). But in this Circuit and District the standard is
stricter, such that a Rule 54(b) motion for reconsideration "may not serve as a
vehicle to identify facts or raise legal arguments which could have been, but were
not, raised or adduced during the pendency of the motion of which reconsideration
was sought." See Evans v. Contract Callers, Inc. , No. 4:10CV02358 FRB, 2012
WL 234653 , at *2 (E.D. Mo. Jan. 25, 2012) (citation omitted); see also Chism v.
WR. Grace & Co., 158 F.3d 988, 992 n. 4 (8th Cir. 1998); Evans v. Contract
Callers, Inc., No. 4:10CV2358 FRB, 2012 WL 234653, at *2 (E.D. Mo. Jan. 25,
2012) ("Although the Court has the power [under Rule 54(b) ] to revisit prior
decisions of its own ... [it] should be loathe to do so in the absence of extraordinary
circumstances such as where the initial decision was clearly erroneous and would
work a manifest injustice.").
Jn re K- V Pharrn. Co. Sec. Litig. , No. 4:11CV01816 AGF, 2014 WL 2559137, at *3 (E.D. Mo.

June 6, 2014) ajj'd sub nom. Juliane/lo v. K-V Pharm. Co., 791 F.3d 915 (8th Cir. 2015).
B. Whistleblower under Dodd-Frank
Plaintiff asks this Court to revisit whether he is a whistleblower claim under 15 U.S.C. §
78u- 6(h), a provision of the Dodd-Frank Act ("Dodd-Frank") that protects employees from
retaliation for certain whistleblowing activities and disclosures. After review of the parties'
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briefing, the Court agrees with the reasoning of Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d
Cir. 2015).

Therein, the Second Circuit discerned that an ambiguity in the definition of

"whistleblower" resulted when conferees "hastily" tried to "reconcile House and Senate bills, each
of which number hundreds of pages," and someone succeeded "in inserting a new provision like
subdivision (iii) into subsection 21F(h)(l)(A)." Berman, 801 F.3d at 154. Consequently, the
Second Circuit found that Dodd-Frank was ambiguous as to who was intended to be a
whistleblower under subdivision (iii):

When the conferees, at the last minute, inserted subdivision (iii) within subsection
21F(h)(l)(A), did they expect subdivision (iii) to be limited by the statutory
definition of "whistleblower" in subsection 21 F( a)( 6), or did they expect
employees to be protected by subdivision (iii) whenever they report violations
internally, without reporting to the Commission? The texts leave the matter
unclear, and no legislative history even hints at an answer.

Berman, 801 F.3d at 155. Therefore, the Second Circuit gave Chevron 2 deference to the SEC's
interpretation of the statute. Id. ("Under SEC Rule 21 F-2(b )(1 ), Berman is entitled to pursue
Dodd- Frank remedies for alleged retaliation after his report of wrongdoing to his employer,
despite not having reported to the Commission before his termination."); see also Khazin v. TD

Ameritrade Holding Corp., No. CIV.A. 13-4149 SDW, 2014 WL 940703, at *5 (D.N.J. Mar. 11 ,
2014)(noting that "most district courts addressing this issue have concluded that the Dodd- Frank
Act's whistleblower provision is ambiguous on its face and they have relied on the SEC's final rule
for guidance").
Based upon the SEC's new interpretive rule and the decision of Berman v. Neo@Ogilvy

LLC, the Court finds that Dodd-Frank is ambiguous and the Court affords deference to SEC Rule

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Chevron, US.A., Inc. v. Natural Res. Def Council, Inc., 467 U.S. 837, 844, 104 S. Ct. 2778,
2782, 81 L. Ed. 2d 694 (1984) ("considerable weight should be accorded to an executive
department's construction of a statutory scheme it is entrusted to administer").
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21F- 2(b)(l).

Under SEC Rule 21F-2(b)(l), an individual need not report to the Agency to

qualify as a whistleblower. Therefore, the Court holds that Lutzeier can pursue Dodd-Frank
remedies for alleged retaliation after his report of wrongdoing to his employer, despite not having
reported to the Commission.

II.

Motion to Compel Bank Examiner's Privilege

At issue in Plaintiffs motion to compel is whether Defendants Citigroup Inc., Citigroup
Management Corp. , and CitiMortgage, Inc. ("CMI") (collectively, "Citi Defendants") should be
required to produce documents withheld under the bank examiner's privilege as indicated on Citi
Defendants' privilege log.
The bank examination privilege is "designed to promote the effective functioning
of an agency by allowing the agency and the regulated banks the opportunity to be
forthright in all communications." In re Bankers Trust Co., 61 F.3d 465, 471 (6th
Cir.1995). Only the agency itself can assert the bank examination privilege. In re
Bank One Secs. Litig. , First Chicago Shareholder Claims, 209 F.R.D. 418, 426
(N.D.Ill.2002) [hereinafter In re Bank One]. The privilege extends only as far as
agency opinions and recommendations, and therefore any materials pertaining to
"purely factual matters" fall outside the scope of the privilege and must be
produced. Id. Bank responses to agency opinions and recommendations also may
fall within the scope of the privilege. In re Bankers Trust Co. , 61 F.3d at 471. In
addition, banks have a duty of confidentiality as to bank-created documents
submitted to the OCC. See 12 C.F.R. § 4.37(b).
The bank examination privilege is not an absolute privilege and may be overridden
where necessary to promote "the paramount interest of the Government in having
justice done between litigants." In re Subpoena upon the Comptroller of the
Currency, 967 F.2d 630, 634 (D.C.Cir.1992). Although the regulatory agency has
the burden of proving that the requested documents are protected, the party seeking
to override the asserted privilege and to gain access to deliberative materials must
demonstrate good cause for disclosure. In re Bank One, 209 F.R.D. at 427. The
court then must balance the competing interests of the party seeking the document
against those of the government, considering:
(i) the relevance of the evidence sought to be protected; (ii) the
availability of other evidence; (iii) the 'seriousness' of the litigation
and the issues involved; (iv) the role of the government in the
litigation; and (v) the possibility of future timidity by government
employees who will be forced to recognize that their secrets are
violable.
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Accordingly,

IT IS HEREBY ORDERED that Plaintiffs Motion for Reconsideration of March 2, 2015
Order (ECF Nos. 160, 172) is GRANTED. The Court' s March 2, 2015 dismissing Plaintiffs
First Cause of Action for Violation of 15 U.S.C. §78u-6(h)(l)(A) is VACATED.

IT IS FURTHER ORDERED that Plaintiffs Motion to Compel Documents Withheld
Under Bank Examiner's Privilege (ECF No. 174) is DENIED without prejudice. Plaintiff shall
request the information through the administrative procedures set forth in the regulations within
twenty (20) days of the date of this order.

IT IS FINALLY ORDERED that the parties shall submit a proposed amended joint
scheduling plan to govern any additional discovery required by the Court's rulings within ten (10)
days, if necessary.

Dated this 191h day ofNovember, 2015.

~L~

RONNIE L. WHITE
UNITED ST ATES DISTRICT JUDGE

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