United States District Court, D. New Jersey
August 5, 2005.
MAUREEN FASANO, Plaintiff,
FEDERAL RESERVE BANK OF NEW YORK, et al., Defendants.
The opinion of the court was delivered by: JOSE LINARES, District Judge
OPINION & ORDER
This matter comes before this Court on a motion by Defendants
Federal Reserve Bank of New York ("FRB"), Ron Henry, Cynthia
Ramos, Leroy Hope, Dottie Boyd, Kim Russo, Lisa Young, and Mertha
Jakubiszen (hereinafter collectively "Defendants"), for
reconsideration of this Court's March 31, 2004 Opinion and Order
pursuant to L. Civ. R. 7.1(g), or certification of an
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). This Court
considered submissions in support and opposition of the motion.
This matter is resolved without oral argument. Fed.R.Civ.P.
78. For the reasons set forth below, Defendants' motion for
reconsideration is DENIED. Alternatively, Defendants' motion for
certification of interlocutory appeal is GRANTED.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
A detailed factual background of this case is set forth in an
earlier Opinion and Order of this Court entered March 31, 2004
("Op. & Order"), and will not be repeated here, except where
necessary to provide context for the pending motion for
reconsideration and request for certification of an interlocutory
appeal. On December 18, 2001, Plaintiff Maureen Fasano
(hereinafter "Fasano" or "Plaintiff") initiated suit against
Defendants in New Jersey Superior Court, for retaliation and
failure to accommodate in violation of the New Jersey
Conscientious Employment Act ("CEPA"), N.J.S.A. 34:19-1 et.
seq., and the New Jersey Law Against Discrimination ("LAD"),
N.J.S.A. 10:5-1 et. seq.. After removal to this Court,
Defendants moved to dismiss for lack of subject matter
jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and failure to
state a claim on which relief can be granted pursuant to
Fed.R.Civ.P. 12(b)(6). In the March 31 Opinion and Order, this Court denied Defendants'
motions, holding that the FRB is a private corporation subject to
state employment claims. (Op. & Order at 6-12). Furthermore,
applying the preemption test for private employers, this Court
determined that Defendants had not met their burden of
demonstrating field preemption. (Id. at 12-14). In addition,
analyzing the relevant state and federal laws,*fn1 this
Court determined that they did not conflict sufficiently to
warrant preemption. (Id. at 14-23).
I. Motion for Reconsideration
A. Legal Standard
Prior to reaching the merits of a motion for reconsideration,
the Court "must decide whether the arguments are properly raised
under Local [Civil] Rule 7.1(g)". Holten v. Chevron U.S.A.,
2002 U.S. Dist. LEXIS 17600, at *5 (D.N.J. Oct. 3, 2001). This
rule provides in relevant part:
A motion for reargument shall be served and filed
within 10 days after the entry of the order or
judgment on the original motion by the Judge or
Magistrate Judge. There shall be served with the
notice a brief setting forth concisely the matters or
controlling decisions which counsel believed the
Judge or Magistrate Judge has overlooked.
L.Civ.R. 7.1(g). The motion may not be used to re-litigate old
matters, or argue new matters that could have been raised before
the original decision was reached. P. Schoenfeld Assets Mgmt.,
L.L.C. v. Cendant Corp., 161 F. Supp. 2d 349
, 352 (D.N.J. 2001);
NL Indust., Inc. v. Commercial Union Ins. Co.,
935 F. Supp. 513, 516 (D.N.J. 1996). Rather, "the motion may address only those matters of fact or issues of law which were
presented to, but not considered by, the court in the course of
making the decision at issue." Holten, 2002 U.S. Dist. LEXIS
17600, *6 (citing Student Pub. Interest Research Group of N.J.
v. Monsanto Co., 727 F. Supp. 876, 878 (D.N.J.), aff'd,
891 F.2d 283
(3d Cir. 1989).
Relief by way of motion for reargument is "an extraordinary
remedy" that is to be granted "very sparingly." Yurecko v. Port
Auth. Trans-Hudson Corp., 279 F. Supp. 2d 606, 608 (D.N.J.
2003); Sagaral v. Mountainside Hosp., 2001 U.S. Dist. LEXIS
6872, at *3 (D.N.J. Mar 28, 2001); NL Indus., Inc.,
935 F. Supp. at 516. The purpose of a motion for reargument is "to
correct manifest errors of law or fact or to present newly
discovered evidence." Harasco Corp. v. Zlotnicki, 779 F.2d 906,
909 (3d Cir. 1985), cert. denied, 476 U.S. 1171 (1986);
Tischio v. Bontex, Inc., 16 F. Supp. 2d 511, 532 (D.N.J. 1998).
Only in circumstances "where matters were overlooked and which,
if considered by the Court, might reasonably have resulted in a
different conclusion, will the Court entertain such a motion."
Bowers v. Nat'l Collegiate Athletic Ass'n, 130 F. Supp. 2d 610,
613 (D.N.J. 2001). On the other hand, mere disagreement with the
Court's decision is inappropriate on a motion for reargument, and
should instead be raised through the normal appellate process.
Holten, 2002 U.S. Dist. LEXIS 17600, at *6. Accordingly,
reconsideration motions "will be granted only where (1) an
intervening change in the law has occurred, (2) new evidence not
previously available has [e]merged, or (3) the need to correct a
clear error of law or prevent a manifest injustice arises." Id.
at * 7 (citing North River Ins. Co. v. CIGNA Reinsurance Co.,
52 F.3d 1194, 1218 (3d Cir. 1995)). With this legal framework in
mind, the Court will now consider Defendant's motion for
reconsideration. B. Entitlement to Reconsideration
Before evaluating the merits of the motion for reconsideration,
the Court must first determine whether Defendants' arguments are
properly raised under Local Rule 7.1 (g). In order for an
argument to be considered properly raised, Defendants must
concisely set forth dispositive facts or controlling decisions of
law which they claim this Court has overlooked. This Court finds
that all arguments now raised by Defendants were previously
raised and already considered by this Court in deciding
Defendants' original motion to dismiss. Furthermore, Defendants
have failed to demonstrate that there has either been an
intervening change in law or a controlling decision that this
Court overlooked. Accordingly, Defendants are not entitled to
reconsideration of the decision.
Initially, Defendants move for reconsideration on the grounds
that this Court committed error in overlooking the significance
of cases that distinguish the concepts of federal agency and
federal instrumentality. In fact, this Court has already
considered, and rejected, Defendants' argument that the FRB is an
instrumentality. (Op. & Order at 6-12). In the original analysis
of Defendant's motion to dismiss, this Court cited an abundance
of authority to support the holding that the FRB is a private
corporation rather than an instrumentality. (Id.). Furthermore,
this Court discussed and distinguished cases that found the FRB
to be an instrumentality. (Id. at 10-12) (distinguishing
Goodyear v. Miller, 486 U.S. 174 (1988); Fed. Reserve Bank of
St. Louis v. Metrocentre Improvement Dist., 657 F.2d 183 (8th
Cir. 1981); Hancock v. Train, 426 U.S. 167 (1976)); and Fed.
Reserve Bank of Boston v. Comm'r of Corps. & Taxation,
499 F.2d 60 (1st Cir. 1974)).
In their brief in support of the motion for reconsideration,
Defendants rely heavily on McCulloch v. Maryland, 17 U.S. 316 (1819), arguing that this
Court overlooked the Supremacy Clause in the March 31, Opinion.
Specifically, Defendants contend that the holding of McCulloch
is not limited solely to taxation. Rather, Defendants argue that
the McCulloch holding was designed to keep federal government
activity free from any type of state interference, absent clear
Congressional authorization. However, this argument was never
raised in Defendants' original memorandum in support of their
motion to dismiss. In their initial memorandum, Defendants assert
that "[t]he McColloch holding is unambiguous: `the law passed
by the legislature of Maryland, imposing a tax on the Bank of
the United States, is unconstitutional and void.'" (Defs.' Mem.
in Supp. of Mot. to Dismiss at 9) (citing McCulloch,
17 U.S. at 436 (emphasis added)). This Court has already distinguished the
instant case from cases involving the issue of state taxation of
Federal Reserve Banks. (Op. & Order at 10). Moreover, at no point
in their original memorandum did Defendants' argue that the
preemption analysis of McCulloch extended beyond taxation
claims to cover "any attempt by states to `retard, impede, burden
or in any matter control' the operations of the United States and
its instrumentalities, including the nation's central banks."
(Defs.' Mem. in Supp. of Mot. for Recons. & Req. for
Interlocutory Appeal at 8) (quoting McCulloch, 17 U.S. at 436).
Since this argument was not raised before the original decision
was reached, it cannot be entertained by this Court in the
context of this motion for reconsideration. See P. Schoenfeld
Assets Mgmt., 161 F. Supp. 2d at 352.
Defendants also contend that classifying the FRB as a private,
non-governmental employer, led to the application of the
incorrect preemption standard. This argument is entirely based on
the contention that the FRB is an instrumentality rather than a
private employer. As previously mentioned, this Court thoroughly analyzed an abundance
of case law before holding the FRB to be a private,
non-governmental employer. Defendant's mere disagreement with
this Court's characterization of the FRB as a private employer is
not appropriate on a motion for reconsideration. See Holten,
2002 U.S. Dist. LEXIS 17600, at *6. Defendants do not assert that
the preemption analysis applied by this Court was inappropriate
for private employers. Therefore, Defendants have not met their
burden of demonstrating either matters of fact or issues of law
which this Court overlooked in issuing the March 31 Opinion and
Finally, in support of their motion for reconsideration,
Defendants direct this Court's attention to a decision issued in
the Eastern District of Pennsylvania shortly after Defendants'
motion to dismiss was denied. Specifically, Defendants assert
that Evans v. Fed. Reserve Bank of Philadelphia, 2004 U.S.
Dist. LEXIS 13265 (E.D. Pa. July 8, 2004), stands in direct
conflict with this Court's preemption analysis in the March 31
Opinion and Order. Since it was decided in the Eastern District
of Pennsylvania, Evans is not binding on this Court and,
therefore, does not qualify as an intervening change in law.
See Holten, 2002 U.S. Dist. LEXIS 17600, at *14 (citing NL
Indust., Inc, 935 F. Supp. at 516). Consequently, Defendants are
not entitled to reconsideration.
II. Request for Interlocutory Appeal
A. Legal Standard
Pursuant to 28 U.S.C. § 1292(b), Defendants request that this
Court certify the March 31 Opinion and Order for interlocutory
appeal. Section 1292(b) provides:
When a district judge, in making a civil action an
order not otherwise appealable under this section,
shall be of the opinion that such order involves a
controlling question of law as to which there is
substantial ground for difference of opinion and that an
immediate appeal from the order may materially
advance the ultimate termination of the litigation,
he shall so state in writing in such order. The Court
of Appeals which would have jurisdiction of an appeal
of such action may thereupon, in its discretion,
permit an appeal to be taken from such order, if
application is made to it within ten days after the
entry of the order: Provided, however, that
application for an appeal hereunder shall not stay
proceedings in the district court unless the district
judge or the Court of Appeals or a judge thereof
shall so order.
28 U.S.C. § 1292(b). In other words, in order for certification
of interlocutory appeals to be appropriate, each of three
criteria must be satisfied: "the matter must (1) involve a
controlling question of law; (2) offer substantial ground for
difference of opinion as to its correctness; and (3) materially
advance the ultimate termination of the litigation." Katz v.
Carte Blanche Corp., 496 F.2d 747
, 754 (3d Cir. 1974). However,
because interlocutory appeals under § 1292(b) stand in contrast
to the policy of avoiding "piecemeal appellate review of trial
court decisions which do not terminate the litigation," they
should be used sparingly. Cardona v. Gen. Motors Corp.,
939 F. Supp. 351, 353 (D.N.J. 1996) (quoting United States v. Hollywood
Motor Car Co., 458 U.S. 263
, 265 (1982). Accordingly, "the court
must remember that . . . [a] motion should not be granted merely
because a party disagrees with the ruling of the district judge."
Id. (quoting Max Daetwyler Corp. v. Meyer, 575 F. Supp. 280,
282 (E.D. Pa. 1983)).
B. Entitlement to Certification
An issue is deemed to be a `controlling question of law' if its
incorrect disposition would require reversal of the final
judgment on appeal. Id. (quoting Katz, 496 F.2d at 755).
Here, the issue of whether or not the Federal Reserve Act ("FRA")
preempts Plaintiff's state law claims is clearly a `controlling
question of law.' Indeed, Plaintiff does not oppose Defendants'
arguments as to this prong. If, on appeal, it was decided that the FRA did
in fact preempt Plaintiff's state law claims, this action would
have to be dismissed for lack of subject matter jurisdiction.
Because the Court is dealing with a `controlling question of
law', it must determine whether or not there is a "substantial
ground for difference of opinion" as to the correctness of this
Court's analysis in the March 31 Opinion and Order.
As previously mentioned, "a party's mere disagreement with the
district court's ruling does not constitute a `substantial ground
for difference of opinion' within the meaning of § 1292(b). Id.
Rather, in order for there to be "substantial ground for
difference of opinion," there must be "a genuine doubt as to the
correct legal standard." Id. In light of the differences of
opinion regarding the degree to which the FRA preempts state
anti-discrimination laws, this Court finds that a `substantial
ground for difference of opinion' exists. As discussed in detail
by this Court in the March 31 Opinion and Order, some courts have
found that the `at pleasure language' in the FRA*fn2
conflicts with, and thereby preempts, all state employment
claims. (Op. & Order at 15-16) (discussing Leon v. Fed. Reserve
Bank of Chicago, 823 F.2d 928 (6th Cir. 1987) (rights under
Michigan law preempted by federal law); Arrow v. Fed. Reserve
Bank of St. Louis, 358 F.3d 392 (6th Cir. 2004) (FRA preempted
state law claims); Kispert v. Fed. Home Loan of Cincinnati,
778 F. Supp. 950 (S.D. Ohio 1991) (Federal Home Loan Bank Act
preempted Bank employee's state law claims); and Aalgaard v. Merchants Nat'l
Bank, 224 Cal. App. 3d 674 (1990) (National Bank Act preempted
Bank employee's state law claims) (emphasis added); see also
Osei-Bonsu v. Fed. Home Loan Bank, 726 F. Supp. 95, 98
(S.D.N.Y. 1989) (state human rights agency's jurisdiction over
claim of racial discrimination against bank preempted by Federal
Home Loan Bank Act).
District Courts within the Third Circuit have also adopted this
line of reasoning. For example, the court in Sheehan v.
Anderson, held that the `at pleasure language' preempts any
state created employment right. 2000 U.S. Dist. LEXIS 3048, at
*19-20 (E.D. Pa. Mar. 17, 2000) (citing Leon, 823 F.2d at 931)
(emphasis added). Although Sheehan dealt primarily with
contractual employment claims, the Eastern District of
Pennsylvania specifically dealt with the FRA preemption of state
anti-discrimination laws in the recent opinion Evans v. Federal
Reserve Bank of Philadelphia, 2004 U.S. Dist. LEXIS 13265 (E.D.
Pa. July 8, 2004). In Evans, after an in depth discussion of
the relevant case law, Judge Padova concluded that "the `dismiss
at pleasure' language in the [FRA] preempts the application of
state anti-discrimination laws which expand the rights and
remedies available under federal anti-discrimination laws." Id.
at *16. The Evans holding stands in direct contrast to the line
of reasoning employed by this Court in the March 31 Opinion and
As previously explained, this Court held in the March 31
Opinion and Order that the "at pleasure" language in the Federal
Reserve Act establishes an "at will" employment situation that
preempts employment contract claims but not state law
anti-discrimination claims. (Op. & Order at 16-18). This position
is supported by cases in other jurisdictions. See Katsiavelos
v. Fed. Reserve Bank of Chicago, 1995 WL 103308, at *4 (N.D.
Ill. March 3, 1995) (bank subject to provisions of Illinois Human Rights Act); Moodie v. Fed. Reserve
Bank of New York, 835 F. Supp. 751, 752-53 (S.D.N.Y. 1993) (New
York State Human Rights Law not preempted by Federal Reserve
Act); White v. Fed. Reserve Bank, 660 N.E.2d 493, 496 (Ohio Ct.
App. 1995) (Bank employee's claim for handicap discrimination,
under state law, was not preempted by Federal Reserve Act).
Simply stated, the Federal Reserve Act's establishment of an
at-will employment relationship in the Federal Reserve Banks does
not transform into the preemption of state employment
In light of the split in authority, this Court finds that a
"substantial ground for difference of opinion" exists. See,
e.g., Khan v. Fed. Reserve Bank, 2005 U.S. Dist. LEXIS 1543,
at *39-40 (S.D.N.Y. Feb. 2, 2005) (noting "split in authority
concerning whether state and local laws are preempted by the
Federal Reserve Act and other banking provisions containing
similar language"). Therefore, although this Court stands by the
correctness of its March 31 decision, the Court acknowledges that
these divergent approaches to the preemption analysis satisfy the
second requirement for certification of interlocutory appeal.
The last criteria for certification of an interlocutory appeal
is that it materially advance the ultimate termination of the
litigation. Plaintiff argues that to permit interlocutory appeal
would only serve to delay this case. However, a pronouncement by
the Third Circuit as to the appropriate preemption analysis to be
applied to the FRA vis-a-vis state anti-discrimination laws could
lead to a prompt termination of this suit. If the issue is
resolved in Defendants' favor (i.e., the FRA preempts state
anti-discrimination laws), it will indisputably result in a
reversal of this Court's March 31 Opinion and Order and the
dismissal of this action. See United States v. A Parcel of
Land, Bldgs., Appurtenances & Improvements, 742 F. Supp. 189,
191 (D.N.J. 1990). Therefore, because all three criteria are satisfied, this Court
shall exercise its discretion and certify the issue of whether
the Federal Reserve Bank is immune from state employment
discrimination law claims, particularly whether the FRA preempts
state anti-discrimination laws, for appeal pursuant to
28 U.S.C. § 1292(b).
For the reasons set forth above, it is on this 5th day of
August, 2005, hereby:
ORDERED that Defendants' motion for reconsideration is
DENIED; and it is further
ORDERED that Defendants' motion for certification for
interlocutory appeal is GRANTED to determine whether the
Federal Reserve Bank is immune from employment discrimination
claims under state law.
IT IS SO ORDERED.