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Boyle v. Evolve Bank & Trust

United States District Court, W.D. Tennessee, Western Division

July 19, 2016

JAYME BOYLE, Plaintiff,
v.
EVOLVE BANK & TRUST and EVOLVE FINANCIAL GROUP, INC., Defendants.

          ORDER

          SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendants Evolve Bank & Trust and Evolve Financial Group, Inc.'s (collectively, “Evolve”) March 31, 2016 Motion to Dismiss Plaintiff's Second Amended Complaint (“Evolve's Motion”). (ECF No. 8 at PageID 579.) Plaintiff Jayme Boyle responded on May 18, 2016. (ECF No. 14 at PageID 617.) Evolve replied on June 3, 2016. (ECF No. 21 at PageID 935.)

         Also before the Court is Boyle's July 12, 2016 Motion to Dismiss Evolve's Counterclaim (“Boyle's Motion”). (ECF No. 26 at PageID 989.) Evolve responded on August 18, 2016. (ECF No. 34 at PageID 1005.) Boyle replied on September 12, 2016. (ECF No. 40 at PageID 1029.) On September 22, 2016, Evolve moved to file a sur-reply in opposition to Boyle's Motion. (ECF No. 43 at PageID 1082.) On July 17, 2017, the Court granted Evolve's motion. (ECF No. 91 at 1703.)

         For the following reasons, Evolve's Motion, to the extent it seeks dismissal of Boyle's Dodd-Frank Act claims, is GRANTED. This action is REMANDED to the Circuit Court of Shelby County, Tennessee, for the Thirtieth Judicial District at Memphis.

         I. Background

         On May 20, 2014, Boyle filed this action against Evolve in the Circuit Court of Shelby County, Tennessee, for the Thirtieth Judicial District at Memphis. (ECF No. 1-2 at PageID 9.) Boyle filed an Amended Complaint on September 5, 2014. (Id. at PageID 115.) The Amended Complaint asserted claims arising under Tennessee law. (Id. at PageID 125.)

         Boyle filed a Second Amended Complaint on February 29, 2016. (ECF No. 1-4 at PageID 407.) The Second Amended Complaint asserts Tennessee state law claims for breach of employment contract; intentional infliction of emotional distress; negligent infliction of emotional distress; common law retaliatory discharge; and claims under Tenn. Code Ann. § 50-1-304 for harassment, hostile work environment, retaliatory or wrongful demotion, and retaliatory or wrongful discharge. (Id. at PageID 445.) The Second Amended Complaint also asserts claims under the “whistleblower-protection provision” of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), 15 U.S.C. § 78u-6(h) (the “Dodd-Frank Act claims”). (Id. at PageID 445-46.) The Second Amended Complaint specifically alleges state law and Dodd-Frank Act claims as follows:

Defendants repeatedly breached Plaintiff's employment contract and also harassed him, humiliated him, subjected him to a hostile work environment, demoted him, and finally constructively discharged him, all because he made numerous internal reports of obvious, repeated, and continuing violations of the Truth in Lending Act (TILA), Regulation Z, as amended (2011); Section 1036 of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536(a)(1)(A); 12 C.F.R. § 1026.36(d)(1)(i) (2011) “Compensation Rule”; Section 1036(a)(1)(A) of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536(a)(1)(A); 12 C.F.R. § 1026.25(a) (2011); “Record Retention Rule”; 12 C.F.R. § 1026.36(d)(1)(iv)(1) and (2) “The 10/10 Exemption to the Compensation Rule”; and HUD 4040.1, REV-2 “Prohibition of Capital Contributions”, asking each and every time for Defendants to correct the numerous violations and bring their policies and procedures into compliance with Federal law, and then refused to stop complaining about the numerous violations unless Defendants conformed their conduct to the applicable laws.

(Id. at PageID 407-08.)

         On March 18, 2016, Evolve removed the action to this Court. (ECF No. 1 at PageID 1.) As grounds for removal, Evolve asserted that, under 15 U.S.C. § 78aa, the district courts of the United States have exclusive jurisdiction over claims arising under the whistleblower-protection provision of the Dodd-Frank Act, and that, under 28 U.S.C. § 1331, the Court has subject-matter jurisdiction over this action because Boyle's Dodd-Frank Act claims raise a federal question. (Id. ¶¶ 7, 9 at PageID 2-3.) Evolve asserted that the Court has supplemental jurisdiction over Boyle's state law claims under 28 U.S.C. § 1367(a). (Id. ¶ 10 at PageID 3.)

         On June 20, 2016, Evolve filed its Answer to the Second Amended Complaint in which it asserts a counterclaim against Boyle for breach of contract and for misappropriation under the Tennessee Uniform Trade Secrets Act (the “TUTSA”), Tenn. Code Ann. §§ 47-25-1701, et seq. (the “Counterclaim”). (ECF No. 22 at PageID 947, 964, 968-70.) The Counterclaim alleges that “Boyle was a former employee of Evolve who resigned in May 2013 to join Perl [Mortgage, Inc.] in creating a Memphis branch with Jeff Kuehn (‘Kuehn'), a former manager of the Evolve loan production officers.” (Id. at PageID 964.) The Counterclaim alleges that “Boyle and Kuehn misappropriated confidential and trade secret information concerning Evolve's loan customers and potential customers for use at Perl, ” to Evolve's detriment. (Id.) Evolve asserts that the Counterclaim is a compulsory counterclaim under Federal Rule of Civil Procedure 13 and that the Court has supplemental jurisdiction over the Counterclaim under 28 U.S.C. § 1367(a). (Id. at PageID 964.)

         Evolve and Boyle respectively move to dismiss all claims asserted by the opposing party. (ECF No. 8-1 at PageID 582; ECF No. 26 at PageID 989-90.)

         II. Jurisdiction

         The Court has federal-question jurisdiction over Boyle's Dodd-Frank Act claims under 28 U.S.C. § 1331. “The district courts of the United States and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have exclusive jurisdiction” over claims alleging violations of the Dodd-Frank Act. 15 U.S.C. § 78aa(a). The Court has supplemental jurisdiction over Boyle's state law claims under 28 U.S.C. § 1367 because they derive from a ...


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