Bowen v. U.S. Bank National Association

Background

Matthew Bowen worked for U.S. Bank first as a Risk Manager and later as Vice President and Corporate Counsel. The complaint alleged that U.S. Bank used reference materials concerning foreclosure requirements in all 50 states and the District of Columbia when certifying compliance to the Federal Housing Administration. Bowen allegedly helped coordinate quarterly reviews of those materials.

After U.S. Bank directed that the work be transferred from Dorsey & Whitney to Bradley Arant, Bowen allegedly became concerned about the higher fees and additional work assigned to Bradley. He reported suspicions about a potentially improper relationship involving U.S. Bank employees and Bradley, and later reported the matter to Kyle Bakken, the attorney responsible for investigating internal fraud. Bowen alleged that Jorge Rivera criticized and threatened him after learning of these reports. U.S. Bank terminated Bowen on June 27, 2017, stating that he had concealed that he failed the Minnesota bar exam. Bowen alleged that reason was a pretext and that he was fired for reporting suspected fraud, embezzlement, and possible violations involving the bank’s foreclosure certifications.

Motion and Legal Issue

U.S. Bank moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Bowen’s claim under the Minnesota Whistleblower Act was preempted by the National Bank Act. Federal preemption means that federal law displaces a state-law claim when the two laws conflict or when the state law obstructs federal objectives. The National Bank Act authorizes a national bank to appoint and dismiss certain officers “at pleasure.” The court had previously determined, based on the pleadings and materials incorporated into them, that Bowen held the title of Vice President, qualified as an officer under U.S. Bank’s bylaws, and was terminated with board ratification.

U.S. Bank argued that allowing Bowen’s state retaliation claim would conflict with the National Bank Act’s dismissal authority. The court stated that U.S. Bank bore the burden of proving conflict preemption and that this doctrine must be applied narrowly. The court considered the statute’s text, structure, historical context, and relevant precedent.

Court’s Analysis

The court held that the National Bank Act did not preempt Bowen’s claim. First, it interpreted the phrase “dismiss at pleasure” as generally equivalent to “at will” in the employment context. Based on historical evidence and Eighth Circuit decisions, the court concluded that the provision was intended to prevent national banks from being bound by fixed-term employment contracts or state-law rules requiring cause for termination during a fixed term. It was not a broad authorization to disregard all state employment laws.

Second, the court reasoned that the National Bank Act did not expressly preempt all state employment litigation, create an exclusive cause of action for employment claims, or state that national banks were shielded from liability for retaliation. The court distinguished Supreme Court decisions involving other subjects, including usury and insurance, because those statutes contained different language and structures.

Third, the court considered federal whistleblower laws that prohibit certain retaliatory discharges by banks. It reasoned that those laws showed that Congress did not intend the National Bank Act’s dismissal provision to authorize retaliation for reporting possible bank misconduct. The court found that the Minnesota Whistleblower Act pursued the same general policy of protecting employees who report suspected legal violations, even though its language did not exactly match any particular federal whistleblower statute. The court also noted that courts use federal retaliation law as guidance when interpreting the Minnesota statute.

The court rejected U.S. Bank’s reliance on contrary authority, including the Eleventh Circuit’s decision in Wiersum. It concluded that U.S. Bank had not shown that the Minnesota Whistleblower Act created an obstacle to the National Bank Act’s objectives or that Congress intended to eliminate state-law protection against retaliatory discharge.

Disposition

The court denied U.S. Bank’s Motion to Dismiss. The order therefore allowed Bowen’s Minnesota Whistleblower Act claim to continue past the pleading stage; it did not decide whether Bowen would ultimately prevail on the retaliation claim.