Seibert v. Federal Deposit Insurance Corporation
- Clarke
- 1:24-cv-00427
- U.S. District Court · Southern District of New York
- 4
In Seibert v. Federal Deposit Insurance Corporation, Judge Clarke stayed discovery and adjourned the initial pretrial conference without setting a new date.
The plaintiffs and the Federal Deposit Insurance Corporation, acting as receiver for Signature Bank and Signature Bridge Bank, are affected by the stay of discovery and the adjournment of the initial pretrial conference.
What happened
Seibert v. Federal Deposit Insurance Corporation concerns bankers’ claims for more than $30 million in allegedly unpaid bonuses from Signature Bank and Signature Bridge Bank. The Federal Deposit Insurance Corporation, acting as receiver, moved to dismiss the claims, and the plaintiffs said they planned to file an amended complaint.
The FDIC asked the court to pause discovery while the plaintiffs amended their complaint and while any new motion to dismiss was resolved. The plaintiffs opposed a complete pause and proposed limited discovery of documents about bonus compensation and a March 2023 employee meeting.
Judge Jessica G.L. Clarke stayed discovery and adjourned the initial pretrial conference without setting a new date. She found that discovery could impose substantial costs on the receivership and that the plaintiffs had identified no prejudice from waiting; she also said the requested documents should remain available later.
The detailed version
- Seibert v. Federal Deposit Insurance Corporation · No. 1:24-cv-00427
- Clarke
- Apr. 24, 2024
Background
The plaintiffs are bankers who previously worked in Signature Bank’s digital-assets group. They allege that they were promised, but not paid, bonuses totaling more than $30 million for work in 2022. After Signature Bank was closed and placed into receivership, the plaintiffs briefly worked for Signature Bridge Bank before being terminated.
The plaintiffs’ complaint asserted claims against the Federal Deposit Insurance Corporation as receiver for Signature Bank and Signature Bridge Bank. The claims included wrongful denial of administrative claims, breach of contract, quantum meruit, promissory estoppel, and violation of New York Labor Law § 198. The FDIC filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint failed to plead required elements and that the bank’s employee handbook made the bonuses discretionary. The plaintiffs notified the court that they intended to file an amended complaint.
Request to Stay Discovery
The FDIC requested a stay of discovery under Federal Rule of Civil Procedure 26(c) while the plaintiffs filed an amended complaint and, if the FDIC filed another dismissal motion, while that motion was resolved. The FDIC argued that discovery would impose substantial costs on receivership assets and that its dismissal arguments could resolve the case.
The plaintiffs agreed that unnecessary expenses should be avoided but opposed a complete stay. They proposed limited discovery concerning recordings or notes from a March 2023 meeting, historical bonus-compensation grids, and deferred-compensation award documents and vesting schedules. They said these materials were likely important to the case and would impose little burden to locate and produce.
Court’s Ruling
The court stayed discovery and adjourned the initial pretrial conference previously scheduled for May 2, 2024, without setting a new date. The court found that the FDIC’s pending motion to dismiss, and the possibility that the action could be resolved at that stage, supported a stay. It also found that discovery could cause the FDIC to incur substantial costs and that the plaintiffs had identified no prejudice from delaying discovery. The court concluded there was no reason to believe the requested documents would become unavailable during the stay.
The court granted the defendant’s requested stay and directed the Clerk of Court to terminate ECF No. 24. The order did not decide whether the plaintiffs’ claims were legally valid or whether the motion to dismiss should be granted.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.