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Esserman v. Indiana Department of Environmental Management

Supreme Court of Indiana

November 2, 2017

Suzanne E. Esserman, Appellant (Plaintiff below),
v.
Indiana Department of Environmental Management, Appellee (Defendant below).

         Appeal from the Marion Superior Court, No. 49D04-1509-PL-32140 The Honorable Cynthia J. Ayers, Judge

         On Petition to Transfer from the Indiana Court of Appeals, No. 49A02-1605-PL-1129

          ATTORNEYS FOR APPELLANT Mary Jane Lapointe Daniel Lapointe Kent Lapointe Law Firm, P.C. Indianapolis, IN

          ATTORNEYS FOR APPELLEE Curtis T. Hill, Jr. Attorney General of Indiana Thomas M. Fisher Solicitor General Indianapolis, IN Andrea E. Rahman Deputy Attorney General Indianapolis, IN

          SLAUGHTER, JUSTICE

         Plaintiff seeks damages under Indiana's False Claims and Whistleblower Protection Act for what she claims was a retaliatory discharge by her employer, the Indiana Department of Environmental Management. Plaintiff's claim does not sound in tort but is based on the Department's alleged violation of the Act. Indiana has not abrogated common-law sovereign immunity for non-tort claims premised on the violation of a statute. Esserman can thus proceed with her statutory claim only if the State has waived sovereign immunity concerning it. Applying the governing standard, we hold the legislature did not "clearly evince" an intention to waive sovereign immunity by authorizing whistleblower claims under the Act against a generic "employer" without expressly defining that term to include the State. We thus affirm the dismissal of Plaintiff's complaint and remand with instructions.

         Factual and Procedural History

         Plaintiff, Suzanne E. Esserman, worked at the Indiana Department of Environmental Management for nearly twenty-five years. Most recently, she oversaw claims for disbursements from the Department's excess-liability trust fund. The fund helps defray the costs of cleaning up petroleum leaks from underground storage tanks. Esserman alleges that certain Department employees approved disbursements from the fund without proper documentation, and that many applicants received payments from the fund to which they were not entitled. Rather than commending Esserman for uncovering irregularities in trust-fund disbursements, the Department fired her.

         Believing the Department terminated her in retaliation for objecting to the improper disbursements, Esserman filed a wrongful-termination complaint in the Marion Superior Court, alleging the Department violated the whistleblower provision (Section 8) of the Indiana False Claims and Whistleblower Protection Act, Ind. Code ch. 5-11-5.5. (2010 Repl.). The Department moved to dismiss her complaint on two grounds: first, under Trial Rule 12(B)(1), claiming the trial court lacked subject-matter jurisdiction; and, second, under Rule 12(B)(6), claiming Esserman failed to state a claim upon which relief can be granted. The trial court found for the Department on both grounds and dismissed her complaint. The Court of Appeals reversed and remanded, concluding the Department was not entitled to sovereign immunity, and that the trial court erred in dismissing the complaint. Esserman v. Indiana Dep't. of Envt'l Mgmt., 66 N.E.3d 993 (Ind.Ct.App. 2016). We granted transfer, thus vacating the Court of Appeals' opinion, and now affirm the trial court and remand with instructions.

         Standard of Review

         Our case law is not consistent in addressing whether sovereign immunity implicates a court's subject-matter jurisdiction. Rather than resolve this issue today, we note that the trial court premised its dismissal on both Rules 12(B)(1) and 12(B)(6). We elect to review the court's dismissal under the alternative ground that Esserman's complaint failed to state a claim upon which relief can be granted. We leave for another day whether sovereign immunity warrants dismissal on jurisdictional grounds.

         A 12(B)(6) motion tests the legal sufficiency of the complaint, requiring that we accept as true all facts alleged in the complaint. Price v. Indiana Dep't. of Child Services, 80 N.E.3d 170, 173 (Ind. 2017) (citation omitted). "We review 12(B)(6) motions de novo and will affirm a dismissal if the allegations are incapable of supporting relief under any set of circumstances." Id. (citation and internal quotation marks omitted). We will also affirm the dismissal if the decision is sustainable on any basis in the record. Id.

         Discussion and Decision

         Indiana has not abrogated common-law sovereign immunity for non-tort claims premised on the violation of a statute. We hold the State has not waived sovereign immunity here because Section 8 of the Act-the whistleblower provision-does not clearly evince the legislature's intention to subject the State to suit for violations of the Act. The trial court was right to dismiss Esserman's claim under Trial Rule 12(B)(6). But the dismissal should have been without prejudice to her filing an amended complaint.

         I.Although this Court has abrogated common-law sovereign immunity almost entirelyfor tort claims, we have not done so for ...


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