FILED
Dec 29 2016, 9:01 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Mary Jane Lapointe Gregory F. Zoeller
Daniel Lapointe Kent Attorney General of Indiana
Lapointe Law Firm, P.C.
Indianapolis, Indiana Andrea E. Rahman
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Suzanne E. Esserman, December 29, 2016
Appellant-Plaintiff, Court of Appeals Case No.
49A02-1605-PL-1129
v. Appeal from the Marion Superior
Court
Indiana Department of The Honorable Cynthia J. Ayers,
Environmental Management, Judge
Appellee-Defendant. Trial Court Cause No.
49D04-1509-PL-32140
Najam, Judge.
Statement of the Case
[1] Suzanne E. Esserman appeals the trial court’s dismissal of her complaint
against the Indiana Department of Environmental Management (“IDEM”), in
which Esserman alleged that IDEM had unlawfully terminated her
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 1 of 9
employment, in violation of Indiana’s False Claims Act, Ind. Code §§ 5-11-5.5-
1 to -18 (2016), in retaliation for her reporting alleged misuse of State funds by
certain IDEM officers. Esserman raises two issues for our review:
1. Whether the trial court erred when it concluded that
sovereign immunity barred the court from having subject
matter jurisdiction over Esserman’s complaint against
IDEM.
2. Whether the trial court erred when it concluded that
Esserman had failed to state a claim upon which relief can
be granted.
[2] We reverse and remand for further proceedings.
Facts and Procedural History
[3] In her complaint against IDEM, Esserman alleged the following facts to be
true:
5. At all times during her [nearly 25 years of] employment
with IDEM, Esserman performed her job duties in a satisfactory
manner.
6. During the course of her employment, Esserman
discovered that certain individuals at IDEM were engaged in
misuse of State funds.
7. Esserman made numerous objections to misuse of State
funds and was terminated in retaliation for those objections.
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 2 of 9
8. Esserman objected to approval of some claims made by
applicants for dispersal of State funds from the Excess Liability
Trust Fund (ELTF), which pays for various projects including
the remediation of contamination caused by leaking underground
storage tanks. The ELTF is funded in large measure by tax
dollars generated from the State tax on gasoline sales.
9. On many occasions, Esserman found that applicants had
not properly documented their claims[] and therefore the claims
were not “reasonable and cost effected [sic],” as required for
ELTF funds under IC § 13-23-9-2 and its implementing
regulations.
10. Esserman could not legally approve claims without
reviewing them, and when she actually reviewed them, she was
disciplined for working too slowly, despite the fact that she found
numerous instances in which the applicants should not legally
have been paid for all costs invoiced.
Appellant’s App. Vol. II at 8. In light of those facts, Esserman claimed that
IDEM had unlawfully terminated her employment in retaliation for reporting
the alleged misuse of State funds.
[4] In response, IDEM moved for the trial court to dismiss Esserman’s complaint
on two grounds. First, IDEM asserted that the State had not waived its right to
sovereign immunity from suit for claims of retaliation under the False Claims
Act and, as such, Esserman’s complaint did not invoke the subject matter of the
trial court. Second, IDEM asserted that the facts alleged in Esserman’s
complaint failed to state a claim upon which relief can be granted. The trial
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 3 of 9
court agreed with both of IDEM’s arguments and dismissed Esserman’s
complaint accordingly. This appeal ensued.
Discussion and Decision
Standard of Review
[5] The trial court dismissed Esserman’s complaint without holding an evidentiary
hearing. Where, as here, the trial court’s judgment under Trial Rules 12(B)(1)
and 12(B)(6) was based on facts not in dispute, we review the trial court’s
dismissal of the complaint de novo. Thornton v. State, 43 N.E.3d 585, 587 (Ind.
2015); Berry v. Crawford, 990 N.E.2d 410, 414 (Ind. 2013). Thus, we afford no
deference to the trial court’s judgment. S.C. v. S.B. (In re M.B.), 51 N.E.3d 230,
233 (Ind. 2016). “This Court views motions to dismiss . . . with disfavor
because such motions undermine the policy of deciding causes of action on
their merits.” McQueen v. Fayette Cty. Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct.
App. 1999), trans. denied.
Issue One: Sovereign Immunity
[6] We first consider the trial court’s judgment that IDEM is entitled to common
law sovereign immunity from claims of unlawful retaliation under the False
Claims Act. As our supreme court has repeatedly recognized:
More than forty years ago, a series of judicial decisions almost
entirely abolished common law immunity for government
entities and activities in this state. Campbell v. State, 259 Ind. 55,
63, 284 N.E.2d 733, 737-38 (1972) (abrogating immunity for the
state); Klepinger v. Bd. of Comm’rs of Miami Cnty., 143 Ind. App.
178, 198-202, 239 N.E.2d 160, 172-73 (1968) (abrogating
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 4 of 9
immunity for counties), trans. denied; Brinkman v. City of
Indianapolis, 141 Ind. App. 662, 666-69, 231 N.E.2d 169, 172-73
(1967) (abrogating immunity for municipalities), trans. denied.
Under Indiana common law, with very limited exception,
governmental entities are thus subject to liability under
traditional tort theories.[1] See Benton v. City of Oakland City, 721
N.E.2d 224, 227 (Ind. 1999) (noting the three limited
circumstances in which common law sovereign immunity still
exists: crime prevention, appointments to public office, and
judicial decision-making).
F.D. v. Ind. Dep’t of Child Servs., 1 N.E.3d 131, 135-36 (Ind. 2013). As
Esserman’s complaint against IDEM does not invoke any of “the three limited
circumstances in which common law sovereign immunity still exists,” id.,
IDEM is not entitled to common law sovereign immunity.
[7] Nonetheless, IDEM argues that this court recently held that common law
sovereign immunity might apply on behalf of the State in some circumstances.
In particular, IDEM relies on Skillman v. Ivy Tech Community College, in which
this court stated “the general principle” that “[a] state may not be sued in its
own courts unless it has waived its sovereign immunity by expressly consenting
to such suit through a ‘clear declaration’ of that consent.” 52 N.E.3d 11, 16
(Ind. Ct. App. 2016) (quoting Oshinski v. N. Ind. Commuter Transp. Dist., 843
N.E.2d 536, 539-40 (Ind. Ct. App. 2006)), trans. denied. But the State’s reliance
1
IDEM expressly concedes that the Indiana Tort Claims Act is not an issue for our review on appeal.
Appellee’s Br. at 17 n.5 (stating that the Tort Claims Act does not apply here because Esserman has alleged a
“statutory claim of retaliatory discharge . . . rather than a tort claim of retaliatory discharge”) (emphases
removed). As IDEM concedes that the Tort Claims Act does not apply, we do not consider it.
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 5 of 9
on Skillman and Oshinski is misplaced. Those cases can easily be distinguished
because both involved suits against the State under federal law, and sovereign
immunity in such cases is a question under the Eleventh Amendment to the
United States Constitution, not a question under Indiana’s common law. See
U.S. Const. amend. XI. Nothing about Esserman’s suit against IDEM in the
Marion Superior Court under Indiana Code Section 5-11-5.5-8 implicates the
Eleventh Amendment. Accordingly, we conclude that IDEM is not entitled to
common law sovereign immunity and hold that the trial court erred when it
dismissed Esserman’s complaint under Indiana Trial Rule 12(B)(1) for lack of
jurisdiction.
Issue Two: Failure to State a Claim
[8] We thus turn to the alternative basis for the trial court’s dismissal of Esserman’s
complaint, namely, that she had failed to state a claim upon which relief can be
granted. Esserman filed her complaint for unlawful retaliatory discharge under
Indiana Code Section 5-11-5.5-8(a), which provides:
An employee who has been discharged, demoted, suspended,
threatened, harassed, or otherwise discriminated against in the
terms and conditions of employment by the employee’s employer
because the employee:
(1) objected to an act or omission described in section 2 of
this chapter; or
(2) initiated, testified, assisted, or participated in an
investigation, an action, or a hearing under this chapter;
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 6 of 9
is entitled to all relief necessary to make the employee whole.
[9] Indiana Code Section 5-11-5.5-2(b) provides:
A person who knowingly or intentionally:
(1) presents a false claim to the state for payment or
approval;
(2) makes or uses a false record or statement to obtain
payment or approval of a false claim from the state;
(3) with intent to defraud the state, delivers less money or
property to the state than the amount recorded on the
certificate or receipt the person receives from the state;
(4) with intent to defraud the state, authorizes issuance of
a receipt without knowing that the information on the
receipt is true;
(5) receives public property as a pledge of an obligation on
a debt from an employee who is not lawfully authorized to
sell or pledge the property;
(6) makes or uses a false record or statement to avoid an
obligation to pay or transmit property to the state;
(7) conspires with another person to perform an act
described in subdivisions (1) through (6); or
(8) causes or induces another person to perform an act
described in subdivisions (1) through (6);
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 7 of 9
is . . . liable to the state for a civil penalty of at least five thousand
dollars ($5,000) and for up to three (3) times the amount of
damages sustained by the state. In addition, a person who
violates this section is liable to the state for the costs of a civil
action brought to recover a penalty or damages.
[10] In her complaint, Esserman alleged that IDEM terminated her employment in
retaliation for her having made “numerous objections” about certain IDEM
officials misusing state funds. Appellant’s App. Vol. II at 8. As such,
Esserman’s complaint plainly stated a cause of action under Section 8(a).2
[11] Still, IDEM asserts that Esserman has failed to state a claim for two reasons.
First, IDEM argues that she has not stated a claim because other parts of the
False Claims Act limit the ability of citizens to bring qui tam actions3 on behalf
of the State for the recovery of funds. See I.C. § 5-11-5.5-4. But Esserman has
not stated a qui tam action under Section 4. Accordingly, IDEM’s argument on
this point must fail.
[12] Second, IDEM asserts that the word “employer” in Section 8, while not defined
in the Indiana Code, must be interpreted to mean only private employers
because some other statutes scattered throughout the Indiana Code suggest
Esserman might have other remedies against a public employer for retaliatory
2
We reject IDEM’s argument on appeal that Esserman’s complaint is not sufficient under our notice
pleading requirements.
3
A qui tam action is “[a]n action brought under a statute that allows a private person to sue for a penalty,
part of which the government or some specified public institution will receive.” Black’s Law Dictionary 1444
(10th ed. 2014).
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 8 of 9
discharge. See Appellee’s Br. at 21 (citing I.C. §§ 4-15-10-4, 22-5-3-3, 36-1-2-13,
and 36-1-8-8). But there is nothing ambiguous about the word “employer” in
Indiana Code Section 5-11-5.5-8 in the first instance and, as such, we have no
authority to look elsewhere for interpretive guidance on the meaning of that
statute. See, e.g., Jackson v. State, 50 N.E.3d 767, 772 (Ind. 2016); see also Andy
Mohr West v. Ind. Sec’y of State, 54 N.E.3d 349, 354 (Ind. 2016) (“Proper
construction of a statute is best driven by the plain language and structure of the
specific statute at issue.”). Section 8 speaks for itself. As such, insofar as
IDEM was in fact Esserman’s employer as she has alleged, she has stated a
claim under Section 8. The trial court erred when it dismissed Esserman’s
complaint for failure to state a claim upon which relief can be granted.
Conclusion
[13] In sum, none of the three limited circumstances in which our supreme court has
recognized that common law sovereign immunity still exists applies here. See
Benton, 721 N.E.2d at 227. And Esserman’s complaint states a claim upon
which relief can be granted under Indiana Code Section 5-11-5.5-8.
Accordingly, the trial court erred when it dismissed Esserman’s complaint
pursuant to Indiana Trial Rules 12(B)(1) and 12(B)(6). We reverse the trial
court’s dismissal of Esserman’s complaint and remand for further proceedings.
[14] Reversed and remanded.
Bailey, J., and May, J., concur.
Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016 Page 9 of 9