Federal Appeals Court Calls Whistleblower Case Quite Silly
September 30, 2015Usually, Opinions from the United States Courts of Appeals are staid undertakings. More prosaic than prose. Every so often, however, the judges dip their pens in poison ink and we are confronted with harsh and biting rebukes. In a recent federal whistleblower case involving former Federal Reserve Bank of New York ("FRBNY") Senior Bank Examiner Carmen Segarra, the United States Court of the Appeals for the Second Circuit ("2Cir") affirmed the dismissal of her case by the Southern District of New York. Carmen M. Segarra, Plaintiff-Appellant, v.Federal Reserve Bank of N.Y., Michael Silva, Michael Koh, and Johnathon Kim, Defendants-Appellees, (Opinion, 2Cir, 14‐1714, September 23, 2015).
In an effort to bring her claim within the statute's text, Segarra argues that the district court should have inferred that the Individual Defendants are subject to liability because the FDIC may benefit in some way from FRBNY's investigation of Goldman Sachs; she also alleges that "Silva expressed alarm about the implications of [the firm's] failure to properly manage conflicts of interest" and stated that FRBNY "possessed information about Goldman that could cause Goldman to ‘explode.'" Joint App. at 7.14 (internal quotation marks omitted) [¶ 57]. Segarra's attempt to bring the Individual Defendants within the statute's ambit is entirely speculative, meritless, and frankly quite silly. Neither sharing an interest in the financial well‐being of a company nor sharing information about that company leads to a reasonable inference that the Individual Defendants, all of whom were FRBNY employees, were performing services for the FDIC.3 Segarra's allegations fall far short of plausibly showing that the Individual Defendants were performing a service on behalf of the FDIC, as required under the whistleblower protection statute.4
Segarra's attempt to bring the Individual Defendants within the statute's ambit is entirely speculative, meritless, and frankly quite silly.