PATRICIA L. COHEN, Magistrate Judge.
This matter is before the Court on the motion to dismiss filed by Defendant PNC Bank, National Association.
On October 18, 2017, Plaintiff filed this action in the Circuit Court of Saint Louis County seeking monetary relief for wrongful termination in violation of public policy. (ECF No. 4). Defendant removed the action to this Court on grounds of diversity jurisdiction. (ECF No. 1).
The facts, as alleged in the petition, are as follows: Plaintiff, a state-certified appraiser, worked for Defendant as a "Senior Review Appraiser." (ECF No. 4 at ¶¶ 7, 12). Plaintiff's responsibilities included "evaluating and approving commercial real estate appraisals conducted by local appraisers throughout the United States, for loans financed by [Defendant]." (
In his petition, Plaintiff states that, under Missouri and federal law, appraisers must comply with the Uniform Standards of Professional Appraisal Practice ("USPAP"). (
Defendant moves to dismiss Plaintiff's petition under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (ECF No. 8). Defendant argues that the Missouri Whistleblower's Protection Act ("WPA"), Mo. Rev. Stat. § 285.575, effective August 28, 2017, preempts Plaintiff's common law claim and applies retroactively to the conduct alleged in the petition. (ECF Nos. 8 & 9). Plaintiff counters that retroactive application of the WPA is prohibited by the Missouri Constitution's prohibition on ex post facto laws. (ECF No. 15).
In examining a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court accepts all of Plaintiff's factual allegations as true and construes those allegations in Plaintiff's favor.
Because this is a diversity case, the Court applies state substantive law and federal procedural law.
Defendant moves for dismissal on the ground that the WPA applies retroactively to preempt Plaintiff's common law, wrongful-discharge claim because: (1) the legislature intended the WPA to supplant the common law action; and (2) the WPA is "procedural or remedial in nature." (ECF No. 8). In response, Plaintiff asserts that the WPA applies prospectively because: (1) the plain language of the statute does not "manifest a clear intent" to apply retroactively; and (2) the additional requirements for litigants "as outlined by the WPA are not procedural only and do affect substantive rights of the parties." (ECF No. 15 at 4, 6).
The general rule in Missouri "is that an at-will employee may be terminated for any reason or no reason[.]"
To prevail on a Missouri common law whistleblowing action, a plaintiff must demonstrate that: (1) he reported serious misconduct that constituted a violation of law and of well-established and clearly-mandated public policy; (2) his employer discharged him; and (3) the report "causally contributed to the discharge."
The WPA provides that it "is intended to codify the existing common law exceptions to the at-will employment doctrine," "limit their future expansion by the courts," and "provide the exclusive remedy for any and all claims of unlawful employment practices." Mo. Rev. Stat. § 285.575.3. The WPA prohibits an employer from discharging an employee because that employee: (1) "reported to the proper authorities an unlawful act of his or her employer"; (2) "report[ed] to his or her employer serious misconduct of the employer that violates a clear mandate of public policy as articulated in a constitutional provision, statute, or regulation promulgated under statute"; or (3) "refused to carry out a directive issued by his or her employer that if completed would be a violation of the law." Mo. Rev. Stat. § 285.575.4.
The WPA limits the class of employees that may bring a whistleblower action, stating that an employee is not a "protected person" if:
Mo. Rev. Stat § 285.575.2(4). Additionally, the WPA requires a plaintiff to demonstrate that his or her "protected classification" was "the motivating factor," rather than a contributing factor, for the discharge. Mo. Rev. Stat. § 285.575.2(1). Finally, the WPA limits a plaintiff's remedies to actual damages for: (1) back pay; and (2) "medical bills directly related to a violation of this section[.]" Mo Rev. Stat. § 285.575.7. If the plaintiff demonstrates that the employer's conduct was "outrageous because of the employer's evil motive or reckless indifference to the rights of others," he or she may recover an amount "double the amount awarded under subdivisions (1) and (2) . . . as liquidated damages."
Article I, section 13 of the Missouri Constitution provides "[t]hat no ex post facto law, nor law. . . retrospective in its operation . . . can be enacted." Mo. Const. art. 1, § 13. "A law is retrospective in operation if it takes away or impairs vested or substantial rights acquired under existing laws or imposes new obligations, duties, or disabilities with respect to past transactions."
Defendant asserts that subsection 3 of the WPA evidences the legislature's clear intent that the WPA apply retroactively to events that occurred prior to its effective date. In particular, Defendant points to the statutory provision that the WPA "is intended to codify the existing common law exceptions to the at-will employment doctrine" and "provide the exclusive remedy for any and all claims of unlawful employment practices." Mo. Rev. Stat. § 285.575.3.
The fact that the WPA explicitly replaces the common law cause of action does not establish the legislature's intent that the statute operate retroactively.
Defendant also argues that the WPA applies retroactively because it is a "procedural or remedial statute," meaning that it "does not take away or impair any vested rights, but simply prescribes a new method for enforcing rights that already existed." (ECF No. 9 at 6). "Procedural or remedial statutes `not affecting substantive rights, may be applied retrospectively, without violating the constitutional ban on retrospective laws."
As Defendant recognizes in its motion to dismiss, the WPA "does not protect supervisory, managerial or executive employees or officers who are employed to report or provide professional opinion on the conduct in question." (ECF No. 9 at 4) (citing Mo. Rev. Stat. § 285.575.2(4)). Nor does the WPA protect an employee if he or she "reports the alleged wrongful conduct to the person who the employee claims acted unlawfully." (
Defendant cites the Missouri Supreme Court's decision in
The WPA also modifies the causation standard from "contributing factor" to "motivating factor." "A statute's modification of the burden of proof. . . is substantive."
Finally, the WPA changes the common law action for wrongful discharge with respect to damages. The WPA prohibits punitive damages and limits available compensatory damages to backpay and reimbursement for medical bills. Mo. Rev. Stat. § 285.575.7. Retroactively limiting a party's damages after its "cause of action accrued violates [Mo. Const.] article I, section 13['s] ban on the enactment of retrospective laws."
For the above reasons, the Court finds that the WPA, which is effective August 28, 2017, is substantive and, therefore, does not apply retroactively to Plaintiff's common law claim for wrongful discharge in violation of public policy arising out of his 2015 discharge. Accordingly, after careful consideration,