A former employee of the Indiana Department of Environmental Management appeared in the Indiana Supreme Court courtroom Thursday arguing her right to bring a complaint against the state under the whistleblower provision of the Indiana False Claims Act.
Suzanne Esserman claimed IDEM terminated her employment in retaliation for her objections to claims paid through the Excess Liability Trust Fund. Her position required that she review and approve payment for the work to clean up the contamination caused by leaking underground storage tanks. However several times, she rejected the claims, finding the applicants had not provided proper documentation.
Marion Superior Court dismissed her complaint on the grounds that IDEM was protected by sovereign immunity. The Indiana Court of Appeals reversed in Suzanne E. Esserman v. Indiana Department of Evinronmental Management, 49A02-1605-PL-1129. The unanimous panel ruled the state environmental agency was not entitled to common law sovereign immunity.
Before the Supreme Court, the IDEM argued it was immune because the Indiana General Assembly did not specifically note the state could be subject to the False Claims Act, Indiana Code 5-11-5.5-8.
Justice Geoffrey Slaughter questioned Indiana Solicitor General Thomas Fisher as to why the statute did not provide relief for Esserman?
Fisher pointed out that the state was not included in the definition of “employer” unlike the Civil Rights Act, which does include the state.
“So you think the Legislature needs to have an opt-in, that is “employer” specifically includes the state as opposed to an opt-out which says we’ve described employer in broad-brush terms and we’re not excluding the state,” Slaughter asked. “You don’t think that failure to exclude is good enough?”
“No, I don’t think that’s consistent with sovereign immunity,” Fisher replied. “One of the consequences, one of the implications of sovereign immunity is the need for a clear statement to waive it, otherwise it becomes a doctrine that is not really subject to legislative control any longer.”
Fisher then cited State ex rel. Indiana Dep’t of Conservation v. Pulaski Circuit Court, 231 Ind. 245, 108 N.E.2d 185 (1952), which held courts cannot infer a waiver of sovereign immunity but rather it must be explicitly waived.
“What do we infer from the fact that our Legislature made the decision to not statutorily define (employer),” Chief Justice Rush asked. “… You’re saying that we have to infer that they meant the state out based on sovereign immunity?”
“No,” Fisher responded. “I think what I’m saying is we can’t infer that they intended the state to be included.”
“So you’re saying the word employer is ambiguous,” Rush countered.
“At best, yes, I think that’s it,” Fisher said. “And ambiguity cuts in favor of the state here because of the interpretive rule that we’re advocating which is the need for a clear statement.”
When Esserman’s attorney, Mary Jane Lapointe, returned for rebuttal, Slaughter wondered what was wrong with the state’s approach that it has sovereign immunity because the Legislature did not waive it in the False Claims Act.
Lapointe replied to take that approach, the court would have to ignore what “employer” and “employee” means when it is not defined in the statute.
Slaughter continued, “The state makes the point that when it comes to the Civil Rights Act, the Legislature knew how to make explicit that the state was a covered employer for purposes of civil rights violations but it didn’t do so here. So why shouldn’t we draw a negative inference in this case based on that silence?”
“I think there are other occasions where the word employer is not used where there hasn’t been sovereign immunity,” Lapointe responded.
She then cited recently retired Justice Robert Rucker’s dissent in Berry v. Crawford, 990 N.E.2d 410 (Ind. 2013), which argued the term “employer” in the wage payment statute does include the state because the other closely related statutes explicitly identify the Indiana government as an employer.