Katherine Brandt v. The Federal Reserve Bank of San Francisco

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 KATHERINE BRANDT, 10 CASE NO. 2:25-cv-01811-JHC Plaintiff, 11 v. 12 ORDER THE FEDERAL RESERVE BANK OF SAN 13 FRANCISCO, 14 Defendant. 15 I 16 INTRODUCTION 17 This matter comes before the Court on Defendant The Federal Reserve Bank of San 18 19 Francisco’s Partial Motion to Dismiss the Amended Complaint. Dkt. # 21. The Court has 20 considered the materials filed in support of and in opposition to the motion, the rest of the file, 21 and the governing law. Being fully advised, the Court GRANTS the motion, DISMISSES 22 Plaintiff’s outrage claim with prejudice, DISMISSES Plaintiff’s False Claims Act (FCA) 23 retaliation claim without prejudice, and GRANTS Plaintiff leave to amend her complaint with 24 respect to the FCA retaliation claim. 25 26 1 II 2 DISCUSSION 3 A. Procedural Standards 4 Federal Rule of Civil Procedure 12(b)(6) governs a motion to dismiss for failure to state a 5 claim. To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, 6 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 7 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim 8 has facial plausibility when the plaintiff pleads factual content that allows the court to draw the 9 10 reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing 11 Twombly, 550 U.S. at 556). 12 “When evaluating a Rule 12(b)(6) motion, the district court must accept all material 13 allegations in the complaint as true, and construe them in the light most favorable to the non- 14 moving party.” Chubb Custom Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 956 (9th Cir. 15 2013). If a complaint lacks a “cognizable legal theory” or “sufficient facts alleged to support a 16 17 cognizable legal theory[,]” a court should dismiss the complaint for failure to state a claim. 18 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 19 B. Fifth Cause of Action – Outrage 20 The “dismiss at pleasure” language of the Federal Reserve Act preempts Plaintiff’s 21 outrage claim. See Morris v. Fed. Rsrv. Bank of San Francisco, 2010 WL 476714, at *3 (N.D. 22 Cal. Feb. 3, 2010) (same language preempted plaintiff’s outrage claim); Diniz v. Fed. Rsrv. Bank 23 of San Francisco, 2004 WL 2043127, at *1–2 (N.D. Cal. Sept. 13, 2004) (same language 24 25 preempted state-law claims); cf. Kroske v. US Bank Corp., 432 F.3d 976, 985 (9th Cir. 2005); 26 Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1582 (9th Cir. 1996); Bollow v. Fed. 1 Rsrv. Bank of San Francisco, 650 F.2d 1093, 1097–98 (9th Cir. 1981); Lambright v. Fed. Home 2 Loan Bank of San Francisco, 2007 WL 4259552, at *3 (N.D. Cal. Dec. 3, 2007). Given this 3 preemption, any amendment of the outrage claim would be futile. Thus, the Court dismisses 4 Plaintiff’s outrage claim with prejudice. 5 C. Sixth Cause of Action – FCA Retaliation Claim 6 Plaintiff’s Amended Complaint does not state an FCA retaliation claim because it does 7 8 not allege protected conduct under the statute. Specifically, it does not allege any protected 9 activity relating to misuse of federal government funds. See Halley v. Sw. Ohio Reg’l Transit 10 Auth., 376 F. Supp. 3d 1047, 793, 799 (S.D. Ohio 2019); McCrary v. Knox Cnty., Ind., 200 F. 11 Supp. 3d 782, 791-92 (S.D. Ind. 2016); see also Hoyte v. Am. Nat. Red Cross, 518 F.3d 61, 68 12 (D.C. Cir. 2008); Nichols v. Baylor Rsch. Inst., 418 F. Supp. 3d 143, 149–50 (N.D. Tex. 2019); 13 Neighorn v. Quest Health Care, 870 F. Supp. 2d 1069, 1100-01 (D. Or. 2012). Because Plaintiff 14 15 could theoretically cure this deficiency, the Court dismisses the retaliation claim without 16 prejudice. 17 D. Leave to Amend 18 Federal Rule of Civil Procedure 15 states that “[t]he court should freely give leave [to 19 amend] when justice so requires,” and there is a strong public policy in favor of permitting 20 amendment. Fed R. Civ. P. 15(a); Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). The 21 Ninth Circuit has even said that Rule 15(a) should be applied with “extreme liberality[,]” 22 23 Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (per curiam), and that 24 leave to amend “should be granted more liberally to pro se plaintiffs.” McQuillion v. 25 Schwarzenegger, 369 F.3d 1091, 1099 (9th Cir. 2004). Defendant does not appear to oppose 26 1 || Plaintiffs request in the alternative for leave to amend. Thus, the Court grants the request as to 2 |! Plaintiff's sixth cause of action—the FCA retaliation claim. 3 IV 4 CONCLUSION > For the reasons above, the Court GRANTS Defendant’s Motion (Dkt. # 21), DISMISSES ° Plaintiff's outrage claim with prejudice, DISMISSES Plaintiff's FCA retaliation claim without prejudice, and GRANTS Plaintiff leave to amend her complaint, if she wishes, with respect to

9 the FCA retaliation claim. Plaintiff may file her second amended complaint on or before May 10 || 19, 2026. 11 DATED this 5" day of May, 2026.

13 oh. 4. Chas 15 Cloke 0. Conn _ 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 ORDER CASE NTINARER 9-94_CV_N1211_THC LA