NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 17, 2014*
Decided July 18, 2014
Before
RICHARD A. POSNER, Circuit Judge
MICHAEL S. KANNE, Circuit Judge
JOHN DANIEL TINDER, Circuit Judge
No. 13‐3841
GLORIA K. O’SHELL, Appeal from the United States
Plaintiff‐Appellant, District Court for the Southern District
of Indiana, Indianapolis Division.
v.
No. 1:10‐cv‐01660‐LJM‐DML
MICHAEL B. CLINE, and
DANIEL L. HACKLER, Larry J. McKinney,
Defendants‐Appellees. Judge.
O R D E R
Gloria O’Shell, a lawyer who worked as an auditor for the Indiana Department
of Transportation, contends that the Department fired her for reporting that it had
wrongly disbursed federal funds. Invoking various constitutional and statutory
provisions, she has sued Michael Cline, the Commissioner of the Department, and
*
After examining the briefs and record, we have concluded that oral argument is
unnecessary. Thus, the appeal is submitted on the briefs and record. See FED. R. APP. P.
34(a)(2)(C).
No. 13‐3841 Page 2
Daniel Hackler, the Director of the Indiana State Personnel Department. She pursues
them in their official capacities (through which she seeks damages from the State of
Indiana) and in their personal capacities. The district court granted summary judgment,
reasoning that sovereign immunity barred the official‐capacity claims and the other
claims were time‐barred, defective for lack of personal involvement, or addressed to the
wrong defendant. That analysis was correct, so we affirm.
O’Shell began working for the Department of Transportation in 2001, but the
events giving rise to this lawsuit began in early 2007, when the Department gave
O’Shell an “unsatisfactory” performance rating. She sought administrative review of
that rating, but the State Employees’ Appeals Commission ruled that it did not have
jurisdiction to consider her petition because she was an at‐will employee and had not
been fired, demoted, disciplined, or transferred. See IND. EXEC. ORDER 05‐14. The Indiana
Court of Appeals affirmed that ruling. O’Shell v. Ind. State Employees’ Appeals
Commission, 908 N.E.2d 1278 (Ind. Ct. App. 2009) (Table).
Next, during an audit in late 2008, O’Shell discovered what she alleges were
irregularities in the disbursement of federal highway funds. She tried to report her
discoveries to her superiors, but, she asserts, they asked her to change her report to omit
them. She complained by email about this request to several Transportation
Department administrators and to one employee in the state Attorney General’s office.
She told them that her audit uncovered violations of the federal and state False Claims
Acts and that to hide them would run afoul of the law. Soon after, on December 19,
2008, the Department decided to fire O’Shell, but she was allowed to resign in order to
preserve her accrued vacation and sick leave. (O’Shell sought administrative review of
her discharge, but, for reasons not in the record, the Appeals Commission has not
responded to her petition, and neither party argues that this inaction is significant.)
O’Shell’s next step was this lawsuit. Invoking 42 U.S.C. § 1983, she contends that
the defendants violated the Fourteenth Amendment in their handling of the 2007
performance review, in firing her, and by coordinating an effort to make sure she never
again works for the State of Indiana. She also asserts that they violated her First
Amendment rights by firing her for speaking out about possible fraud in highway
contracts. Those same allegations underlie her statutory claims, which she brings under
the anti‐retaliation provision of the federal False Claims Act, 31 U.S.C. § 3730(h), and
Indiana’s counterparts to that Act, IND. CODE §§ 4‐15‐10‐4, 5‐11‐5.5‐8.
No. 13‐3841 Page 3
On the defendants’ motion to dismiss, the district court dispatched most of
O’Shell’s claims. First, citing sovereign immunity, it dismissed all claims brought
against the defendants in their official capacities. Then the court addressed the
personal‐capacity, constitutional claims. With respect to the Fourteenth Amendment,
the court saw two claims. The first challenged a lack of due process in O’Shell’s 2007
performance review and the ensuing administrative appeal; the court ruled that this
claim was time‐barred and any review of the related Indiana Court of Appeals decision
would transgress the Rooker‐Feldman doctrine. The second claim asserted that the
discharge occurred without due process; the court rejected this claim because O’Shell
failed to allege personal involvement on the part of either defendant. Finally, the court
dismissed her First Amendment claim, explaining that speech made by a public
employee in her capacity as a public employee receives no constitutional protection.
The district court later granted summary judgment to the defendants on the
personal‐capacity claims brought under the false‐claims statutes. It decided that,
because the defendants in their personal capacities were not O’Shell’s “employer”
within the meaning of the federal False Claims Act, they were entitled judgment on the
claim. O’Shell’s claims under Indiana’s counterpart law failed for the same reason and
for two others: state law did not criminalize the misappropriation of federal funds and
the Department of Transportation was not a “person” amenable to suit.
O’Shell’s principal argument on appeal is that she may pursue official‐capacity
claims under the federal False Claims Act because Congress has abrogated Indiana’s
sovereign immunity. She points to 42 U.S.C. § 2000d‐7, a provision of Title VI of the
Civil Rights Act of 1964. That provision abrogates state sovereign immunity for, as
relevant here, suits involving any “Federal statute prohibiting discrimination by
recipients of Federal financial assistance.” O’Shell contends that the False Claims Act,
which in part prohibits discriminating against whistleblowing employees, falls into
§ 2000d‐7’s catchall provision. Her argument is a loser for two reasons.
First, the Supreme Court has held that the federal False Claims Act does not
permit suits against states or their agencies. See Vermont Agency of Natural Resources v.
United States ex rel. Stevens, 529 U.S. 765, 787–88 (2000). (The same is true of O’Shell’s
§ 1983 claims. See Will v. Michigan Dep’t of State Police, 491 U.S. 58, 66–67 (1989).) That
the Department of Transportation was O’Shell’s employer makes no difference.
See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 100–02 (1984); Luder v.
Endicott, 253 F.3d 1020, 1022 (7th Cir. 2001).
No. 13‐3841 Page 4
Second, Congress may validly abrogate a state’s sovereign immunity only by
using the enforcement powers granted to it by the Civil War amendments. See Seminole
Tribe of Florida v. Florida, 517 U.S. 44, 64–66 (1996). O’Shell correctly points out that Title
VI was an exercise of Congress’s Fourteenth Amendment enforcement authority,
see Fuller v. Rayburn, 161 F.3d 516, 518 (8th Cir. 1998); DeKalb Cnty. Sch. Dist. v. Schrenko,
109 F.3d 680, 688–89 (11th Cir. 1997), but that is beside the point. The False Claims Act
was passed, in its original form, before those amendments were ratified. See Stevens, 529
U.S. at 781–82; United States v. Bornstein, 423 U.S. 303, 309 (1976). Therefore, in enacting
that law, Congress could not possibly have used powers that it did not yet have.
Next, with respect to her official‐capacity claims under Indiana’s counterpart to
the federal False Claims Act, O’Shell asserts that Indiana has waived its sovereign
immunity. She relies on IND. CODE 8‐23‐2‐5(c), which waives immunity for the “willful
violation” of rules created to manage the right‐of‐way of the state highway system. But
a waiver of sovereign immunity in one context does not operate as a waiver in other
contexts. Sossamon v. Texas, 131 S.Ct. 1651, 1658 (2011). And Indiana state law expressly
preserves sovereign immunity in false‐claims suits. IND. CODE 5‐11‐5.5‐7(d).
O’Shell also challenges the district court’s dismissal of her § 1983 claim against
the defendants in their personal capacities. With respect to the First Amendment claim,
the district court’s conclusion that O’Shell’s speech does not merit First Amendment
protection is correct. The First Amendment does not shield O’Shell from personnel
action for speech that she made to fulfill her duties as a public employee. See Lane v.
Franks, 134 S. Ct. 2369, 2378–80 (2014); Garcetti v. Ceballos, 547 U.S. 410, 418–20 (2006). As
an auditor, O’Shell’s job was to report observed financial improprieties. On appeal she
does not contend that she was speaking as a citizen when she reported the
discrepancies that she uncovered during her audit, an omission that defeats her claim.
See Spiegla v. Hull, 481 F.3d 961, 965 (7th Cir. 2007). In any case, her First Amendment
claim was untimely: She was notified of her discharge, the relevant date for this claim,
see Rankin v. McPherson, 483 U.S. 378, 383–84 (1987); Valentino v. Vill. of South Chicago
Heights, 575 F.3d 664, 671 (7th Cir. 2009), on December 19, 2008. O’Shell brought suit on
December 20, 2010—one day after the statute of limitations had run on her claim.
See Serino v. Hensley, 735 F.3d 588, 590 (7th Cir. 2013) (two‐year statute of limitations for
§ 1983 actions arising in Indiana).
Finally, O’Shell challenges the district court’s disposition of her Fourteenth
Amendment challenge. The district court construed that claim to allege only that the
defendants violated due process with respect to their handling of her 2007 performance
No. 13‐3841 Page 5
review and discharge, and it correctly decided that those claims fail as untimely or for
lack of personal involvement. But we think that the district court overlooked another
aspect of O’Shell’s Fourteenth Amendment claim: O’Shell also contends that, after
rankling her superiors with her attempts to reveal her audit observations, they have
been “blackballing” her from any job with a state agency. Because, O’Shell contends, the
defendants continue to blackball her, she concludes that this claim is timely.
But even if timely, this claim comes to naught because O’Shell fails to allege
plausibly that either defendant was personally involved in the blackballing, as is
required to hold them liable under § 1983. See Minix v. Canarecci, 597 F.3d 824, 833 (7th
Cir. 2010). O’Shell makes no appellate argument about personal involvement with
respect to Cline, but she does seek to hold Hackler responsible because he oversees the
actions of those state employees who are blackballing her. That allegation of
supervisory authority, however, is insufficient to raise a plausible inference that
Hackler personally intervened to deny her employment at every turn, see Ashcroft v.
Iqbal, 556 U.S. 662, 677–78 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and
§ 1983 does not permit vicarious liability, Iqbal, 556 U.S. at 676; Smith v. Gomez, 550 F.3d
613, 619 (7th Cir. 2008). Thus, the claim fails.
We have considered O’Shell’s remaining arguments regarding the personal‐
capacity claims under the false‐claim statutes, but they lack merit for the reasons that
the district court gave and require no further discussion. The judgment is AFFIRMED.