Golub v. Berdon LLP

Filing 68

MEMORANDUM OPINION AND ORDER: The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the foregoing reasons, the motion to dismiss is gr anted without prejudice. The plaintiff may file a motion to file an amended complaint together with a copy of the proposed amended complaint and an explanation why such filing is not futile. The motion must be filed within thirty (30) days of t he date of this Memorandum Opinion and Order. If the plaintiff fails to move to file an amended complaint within that time, the claims will be dismissed with prejudice. The Clerk is directed to close Docket No. 47. Furthermore, the Court denies al l of the requests for ancillary relief. The actions by both sides are not so egregious as to warrant imposition of sanctions, and the plaintiff has not complied with the requirements of Rule 11 of the Federal Rules of Civil Procedure. There is no basis to strike any documents submitted because the Court has not relied on them, nor is there a basis to admit specifically the appendices to the plaintiff's complaint. The appendices were submitted with the complaint and that is sufficient to put them in the record. There is no basis for discovery at this point. The Clerk is directed to mail of copy of this Memorandum Opinion and Order to the pro se plaintiff. SO ORDERED. re: 47 MOTION to Dismiss Plaintiff's First Amended Complaint. filed by Berdon LLP. (Signed by Judge John G. Koeltl on 2/17/2021) (ks) Transmission to Docket Assistant Clerk for processing.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
DR. J. DAVID GOLUB,
Plaintiffs,
- against BERDON LLP,

19-cv-10309 (JGK)
MEMORANDUM
OPINION AND ORDER

Defendant.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The pro se plaintiff, Dr. J. David Golub, brings this
action against Berdon LLP (“Berdon”) alleging violations of the
Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621
et seq., the False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et
seq., and various state law violations arising from the
termination of Golub’s employment at Berdon. Berdon now moves
dismiss the complaint for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6). Berdon also requests
that the Court sanction Golub under its inherent authority.
Golub moves for sanctions against Berdon pursuant to Federal
Rule of Civil Procedure 11, as well as to strike certain
filings, to admit three appendices into evidence, and to compel
discovery.
For the reasons explained below, the motion to dismiss is
granted and all other requests for relief are denied.

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I
The following facts are drawn from the Amended Complaint
(“Compl.”) and are accepted as true for the purposes of this
motion.
Golub, a “resident of New Jersey and South Carolina,”
worked as a tax accountant at Berdon, a limited-liability
partnership focused on audit, tax, and consulting services;
Berdon is alleged to “reside” in New York. Compl. ¶¶ 1, 5, 7, 9.
Berdon engaged Golub initially as a consultant from July 2017 to
March 2018 to facilitate a merger with another accounting firm,
and then as an employee pursuant to a contract until his
termination in July 2018. Id. ¶ 12. At the time of his
discharge, Golub was over the age of 40 and had over 40 years of
experience in accounting. Id. ¶ 2, 28.
In July 2018, Golub complained to Berdon’s managing tax
partner about alleged professional misconduct of a colleague,
B.S. Id. ¶¶ 12, 20-26. In particular, Golub alleged that B.S.
submitted fraudulent filings to the Internal Revenue Service
(“IRS”) and state government agencies. Id. ¶ 28. Shortly
thereafter, Berdon terminated Golub’s employment. Id. ¶ 19. When
Golub asked for the grounds for the termination, Berdon’s
managing tax partner stated that he heard a recording of Golub
reprimanding B.S. using abusive language, and another employee

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stated that there was “an office cultural divide or disconnect
and that [Golub] was not a ‘team player.’” Id.
Golub alleges that Berdon ignored the issues he raised
about B.S. and terminated Golub instead of investigating B.S., a
younger, less experienced employee. Golub alleges that this
amounted to a retaliatory discharge in violation of the ADEA.
Id. ¶ 28. Golub further alleges that his termination violated
the anti-retaliation provisions of the FCA, as well as New York
and New Jersey whistleblowers laws. Id. ¶ 30. Lastly, Golub
asserts state law claims of a breach of the covenant of good
faith and fair dealing and breach of contract. Golub is seeking
compensatory damages of $2,250,000 and punitive damages of
$1,000,000. Id. at 20-22.
II
In deciding a motion to dismiss pursuant to Rule 12(b)(6),
the allegations in the complaint are accepted as true, and all
reasonable inferences must be drawn in the plaintiff’s favor.
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.
2007). 1 The Court’s function on a motion to dismiss is “not to
weigh the evidence that might be presented at a trial but merely
to determine whether the complaint itself is legally
sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.
Unless otherwise noted, this Memorandum Opinion and Order omits all
alterations, citations, footnotes, and internal quotation marks in quoted
text.
1

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1985). The Court should not dismiss the complaint if the
plaintiff has stated “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
While the Court should construe the factual allegations in
the light most favorable to the plaintiff, “the tenet that a
court must accept as true all of the allegations contained in
the complaint is inapplicable to legal conclusions.” Id. When
presented with a motion to dismiss pursuant to Rule 12(b)(6),
the Court may consider documents that are referenced in the
complaint, documents that the plaintiff relied on in bringing
suit and that are either in the plaintiff’s possession or that
the plaintiff knew of when bringing suit, or matters of which
judicial notice may be taken. See Chambers v. Time Warner, Inc.,
282 F.3d 147, 153 (2d Cir. 2002).
When faced with a pro se complaint, the Court must
“construe [the] complaint liberally and interpret it to raise
the strongest arguments that it suggests.”
618 F.3d 162, 170 (2d Cir. 2010).

Chavis v. Chappius,

“Even in a pro se case,

however, . . . threadbare recitals of the elements of a cause of
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action, supported by mere conclusory statements, do not
suffice.”

Id.

Thus, although the Court is “obligated to draw

the most favorable inferences” that the complaint supports, it
“cannot invent factual allegations that [the plaintiff] has not
pled.” Id.; see also Yajaira Bezares C. v. The Donna Karan Co.
Store LLC, No. 13-cv-8560, 2014 WL 2134600, at *1 (S.D.N.Y. May
22, 2014).
III
A
Berdon argues that the ADEA claim should be dismissed
because there is no plausible connection between Golub’s age and
his discharge. While Berdon treats Golub’s ADEA claim as a
status-based claim of age discrimination, the complaint and the
plaintiff’s papers refers to both Golub’s age-based status and
retaliation, and the Court thus construes the claim as both a
status-based claim and a retaliation claim under the ADEA.
The ADEA provides that “[i]t shall be unlawful for an
employer . . . to fail or refuse to hire or to discharge any
individual or otherwise discriminate against any individual with
respect to his compensation, terms, conditions, or privileges of
employment, because of such individual’s age.” 29 U.S.C.
§ 623(a)(1). “In order to establish a prima facie case of age
discrimination, the plaintiff must show (1) that [the plaintiff]
was within the protected age group, (2) that [the plaintiff] was
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qualified for the position, (3) that [the plaintiff] experienced
adverse employment action, and (4) that such action occurred
under circumstances giving rise to an inference of
discrimination.” Green v. Town of E. Haven, 952 F.3d 394, 403
(2d Cir. 2020). In particular, “a plaintiff alleging age
discrimination under the Age Discrimination in Employment Act
must allege that age was the ‘but-for’ cause of the employer’s
adverse action.” Vega v. Hempstead Union Free Sch. Dist., 801
F.3d 72, 86 (2d Cir. 2015) (citing Gross v. FBL Fin. Servs.,
Inc., 557 U.S. 167, 177 (2009)); see also Lively v. WAFRA Inv.
Advisory Grp., Inc., No. 19-CV-3257, 2020 WL 4038350, at *4
(S.D.N.Y. July 17, 2020).
Here, Golub failed to allege a plausible case of age
discrimination. There’s no question that Golub was within the
protected age group, qualified for his position, and that he
experienced an adverse employment action. However, the
allegations in the complaint do not support an inference of
discrimination, let alone that age was a but-for cause of the
adverse employment action. Indeed, the only age-related
allegation in the complaint is that Golub was older than another
employee who was not terminated. But the complaint does not
demonstrate any causal nexus between Golub’s age and the
termination. If anything, the complaint demonstrates that even
Golub does not attribute his termination to age but rather to
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his reporting of the purported misconduct of a colleague who
happened to be younger than Golub. See, e.g., Compl. ¶ 10
(alleging that the contract was terminated “in retaliation for
disclosing to the Berdon managing tax partner, audit and tax
malpractice and fraud committed by a Berdon employee-audit
principal”); ¶ 26 (stating that the reason proffered for Golub’s
termination was “code for the concept that [Golub] did not
participate in a cover-up” and that “[t]he timing of the
employment discharge is no coincidence” because Golub was
“terminated three days after B.S. completed his coverup of
accounting and tax fraud”); ¶ 28 (“[Golub] presented these
issues to the audit principal, B.S., one week prior to his
termination.”). Accordingly, the complaint fails to allege agebased discrimination in violation of the ADEA. See Lively, 2020
WL 4038350, at *4 (dismissing an ADEA claim for failure to
allege but-for causation); Scalercio-Isenberg v. Morgan Stanley
Servs. Grp. Inc., No. 19-CV-6034, 2019 WL 6916099, at *5
(S.D.N.Y. Dec. 19, 2019) (same).
In addition to a status-based claim, a plaintiff may bring
a retaliation claim under the ADEA. The ADEA provides that it is
“unlawful for an employer to discriminate against any of his
employees . . . because such individual, member or applicant for
membership has opposed any practice made unlawful by this
section, or . . . made a charge, testified, assisted, or
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participated in any manner in an investigation, proceeding, or
litigation under this Act.” 29 U.S.C. § 623(d). “To state a
claim for retaliation in violation of the ADEA, a plaintiff must
plead facts that would tend to show that (1) [plaintiff]
participated in a protected activity known to the defendant; (2)
the defendant took an employment action disadvantaging
[plaintiff]; and (3) there exists a causal connection between
the protected activity and the adverse action.” Mabry v.
Neighborhood Def. Serv., 769 F. Supp. 2d 381, 397 (S.D.N.Y.
2011) (citing Patane v. Clark, 508 F.3d 106, 115 (2d Cir.
2007)). “As to the protected activity element . . . the
plaintiff need[s to] have had a good faith, reasonable belief
that he was opposing an employment practice made unlawful” by
the ADEA. Kessler v. Westchester Cty. Dep't of Soc. Servs., 461
F.3d 199, 210 (2d Cir. 2006).
In this case, Golub’s ADEA claim cannot survive as a
retaliation claim. To the extent the complaint alleges
retaliation, it was alleged to have occurred due to Golub’s
reporting of his colleague’s professional misconduct and not
because Golub opposed any unlawful employment practice. Because
the complaint contains no reference to Golub participating in
any activity protected by the ADEA, he could not have been
retaliated against within the meaning of the ADEA.
Accordingly, the ADEA claim is dismissed without prejudice.
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B
Berdon argues that the retaliation claim under the FCA
should be dismissed because Golub did not engage in a protected
activity under the FCA.
In Section 3730(h), the FCA provides that “[a]ny
employee . . . shall be entitled to all relief necessary to make
that employee . . . whole, if that employee . . . is discharged
. . . because of lawful acts done by the employee . . . in
furtherance of an action under [the FCA] or other efforts to
stop 1 or more violations of [the FCA].” 31 U.S.C. § 3730(h). A
viable claim seeking such relief must show that “(1) [the
employee] engaged in activity protected under the statute, (2)
the employer was aware of such activity, and (3) the employer
took adverse action against [the employee] because he engaged in
the protected activity.” United States ex rel. Chorches v. Am.
Med. Response, Inc., 865 F.3d 71, 95 (2d Cir. 2017).
Here, Golub alleged that, prior to his termination, he
complained of another Berdon professional submitting fraudulent
filings to the Internal Revenue Service (“IRS”) and state
government agencies. However, Golub does not show that his
activity is protected under the FCA by virtue of either
“further[ing] an action under [the FCA]” or “other efforts to
stop 1 or more violations” of the FCA. 31 U.S.C. § 3730(h).
While an actual FCA violation is not a prerequisite for a
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retaliation claim, the plaintiff is “required to show a good
faith basis, or objectively reasonable basis, for believing that
he or she was investigating matters in support of a viable FCA
case.” Weslowski v. Zugibe, 14 F. Supp. 3d 295, 311 (S.D.N.Y.
2014). The complaint does show how the alleged tax fraud could
have supported a viable FCA case or that Golub had a good faith
basis for believing so at the time.
Furthermore, it is difficult to see how Golub could ever
demonstrate that his reporting was done in support of a viable
FCA case. Pursuant to Section 3729(d), tax-related fraud is
expressly excluded from the scope of the FCA. See 31 U.S.C. §
3729(d) (“This section does not apply to claims, records, or
statements made under the Internal Revenue Code of 1986.”);
Hardin v. Scandinavia, 731 F. Supp. 1202, 1204 (S.D.N.Y. 1990)
(“[I]ncome tax cases are not within the scope of § 3729.”); see
also United States ex rel. Lissack v. Sakura Glob. Capital
Mkts., Inc., 377 F.3d 145, 157 (2d Cir. 2004) (clarifying that
FCA claims that depend on establishing a violation of the tax
code, even when not directly seeking to recover federal taxes,
are barred by § 3729(d)). And because tax fraud is expressly
excluded from the scope of the FCA, it is implausible that
Golub’s activity was an effort to stop the violation of the FCA
and thus a protected activity.

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Accordingly, the retaliation claim under the FCA is
dismissed without prejudice.
IV
With respect to the remaining claims, all brought under
various state laws, unless the Court finds that it has diversity
jurisdiction, the Court must determine whether to exercise
supplemental jurisdiction.
On questions of subject matter jurisdiction, the plaintiff
bears the burden of proving the Court’s jurisdiction by a
preponderance of the evidence. Makarova v. United States, 201
F.3d 110, 113 (2d Cir. 2000). With regards to jurisdictional
facts, the Court has the power and the obligation to consider
matters outside the pleadings, such as affidavits, documents,
and testimony, to determine whether jurisdiction exists. See
Anglo-Iberia Underwriting Mgmt. Co. v. P.T. Jamsostek (Persero),
600 F.3d 171, 175 (2d Cir. 2010); APWU v. Potter, 343 F.3d 619,
627 (2d Cir. 2003); Filetech S.A. v. France Telecom S.A., 157
F.3d 922, 932 (2d Cir. 1998); Kamen v. Am. Tel. & Tel. Co., 791
F.2d 1006, 1011 (2d Cir. 1986). In so doing, the Court is guided
by the body of decisional law that has developed under Federal
Rule of Civil Procedure 56. Kamen, 791 F.2d at 1011.
Pursuant to 28 U.S.C. § 1332, federal courts have subject
matter jurisdiction over state law claims when the amount in
controversy exceeds the sum or value of $75,000 and there is
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complete diversity of citizenship among the parties. See Wash.
Nat’l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 133 (2d Cir.
2020). Diversity of citizenship “does not exist unless each
defendant is a citizen of a different State from each
plaintiff.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365,
373 (1978) (emphasis in original). “For purposes of diversity
jurisdiction, a party’s citizenship depends on his domicile.”
Linardos v. Fortuna, 157 F.3d 945, 948 (2d Cir. 1998). Domicile
is a person’s fixed home and principal establishment, and to
which, whenever he is absent, the person intends to return. Id.
Alternatively, pursuant to 28 U.S.C. § 1367, federal courts
can exercise supplemental subject matter jurisdiction over state
law claims that derive from the same “common nucleus of
operative fact” as the federal claims brought in the same
action. Briarpatch Ltd., L.P. v. Phx. Pictures, Inc., 373 F.3d
296, 308 (2d Cir. 2004). However, once the Court dismisses the
federal claims, the Court may decline to exercise supplemental
jurisdiction. See 28 U.S.C. § 1367(c)(3); Kolari v. N.Y.Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006).
Although the complaint alleges complete diversity in a
conclusory fashion, the Court cannot ascertain from the facts
alleged whether complete diversity exists. First, Golub states
that he is a resident of New Jersey and South Carolina. However,
“a statement of residence, unlike domicile, tells the court only
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where the parties are living and not of which state they are
citizens.” John Birch Soc'y v. Nat'l Broad. Co., 377 F.2d 194,
199 (2d Cir. 1967). Furthermore, “[a]t any one time, a party can
have multiple residences but only one domicile.” Galu v. Attias,
923 F. Supp. 590, 595 (S.D.N.Y. 1996). As such, Golub can only
be a citizen of either New Jersey or South Carolina, but not
both.
With respect to Berdon, the complain alleges that the
company is a “resident” of New York. However, as a limited
liability partnership, Berdon inherits the citizenship of all
its members. See Carden v. Arkoma Assocs., 494 U.S. 185, 195-96
(1990). The complaint is silent on the citizenship of Berdon’s
members and the Court has no basis to conclude that they are all
citizens of New York. Accordingly, it is not clear that the
Court has diversity jurisdiction over the state law claims.
In the absence of diversity jurisdiction, because the Court
has dismissed the federal claims brought in this action, it may
decline to exercise supplemental jurisdiction pursuant to 28
U.S.C. § 1367(c)(3). “Once a district court’s discretion is
triggered under § 1367(c)(3), it balances the traditional
‘values of judicial economy, convenience, fairness, and comity’
in deciding whether to exercise jurisdiction.” Kolari, 455 F.3d
at 122 (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343,
350 (1988)). “[I]n the usual case in which all federal-law
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claims are eliminated before trial, the balance of [these]
factors . . . will point toward declining to exercise
jurisdiction over the remaining state-law claims.” Cohill, 484
U.S. at 350 n.7. This is plainly the case here. After dismissing
the federal claims, the Court’s duty would be limited to
considering state law claims. Such “[n]eedless decisions of
state law should be avoided both as a matter of comity and to
promote justice between the parties, by procuring for them a
surer-footed reading of applicable law.” United Mine Workers v.
Gibbs, 383 U.S. 715, 726 (1966). Furthermore, the pre-discovery
stage of the litigation means that the factors of judicial
economy, convenience, fairness, and comity point toward
declining supplemental jurisdiction. See Page v. Oath Inc., No.
17-cv-6990, 2018 WL 1406621, at *4 (S.D.N.Y. Mar. 20, 2018),
aff'd sub nom, Page v. United States Agency for Glob. Media, 797
F. App'x 550 (2d Cir. 2019).
Accordingly, the state law claims are dismissed without
prejudice for lack of subject matter jurisdiction.
CONCLUSION
The Court has considered all of the arguments raised by the
parties. To the extent not specifically addressed, the arguments
are either moot or without merit. For the foregoing reasons, the
motion to dismiss is granted without prejudice. The plaintiff
may file a motion to file an amended complaint together with a
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copy of the proposed amended complaint and an explanation why
such filing is not futile. The motion must be filed within
thirty (30) days of the date of this Memorandum Opinion and
Order. If the plaintiff fails to move to file an amended
complaint within that time, the claims will be dismissed with
prejudice. The Clerk is directed to close Docket No. 47.
Furthermore, the Court denies all of the requests for
ancillary relief. The actions by both sides are not so egregious
as to warrant imposition of sanctions, and the plaintiff has not
complied with the requirements of Rule 11 of the Federal Rules
of Civil Procedure. There is no basis to strike any documents
submitted because the Court has not relied on them, nor is there
a basis to admit specifically the appendices to the plaintiff’s
complaint. The appendices were submitted with the complaint and
that is sufficient to put them in the record. There is no basis
for discovery at this point.
The Clerk is directed to mail of copy of this Memorandum
Opinion and Order to the pro se plaintiff.
SO ORDERED.
Dated:

New York, New York
February 17, 2021

___

/s/ John G. Koeltl_______
John G. Koeltl
United States District Judge

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