United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
J. THARP, JR. UNITED STATES DISTRICT JUDGE.
Dane Klee alleges he was fired from his employment with
defendant McHenry County College for reporting fraudulent
federal financial aid claims to his supervisors. The College
has moved to dismiss both of his claims: a retaliation claim
under the False Claims Act and a state law retaliatory
discharge claim. The College has also moved to strike the
claim for punitive damages and certain exhibits attached to
the complaint. For the reasons explained below, the motion to
dismiss is granted in part and denied in part, while the
motion to strike is granted by agreement.
factual allegations in the complaint are accepted as true for
the purpose of this motion to dismiss. See Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). The College
moved to strike Exhibits A and C from the complaint and the
plaintiff stated he had no objection to that portion of the
motion. Therefore, the motion to strike is granted and the
Court will not consider those exhibits in assessing the
motion to dismiss. The defendants also moved to strike
Klee's request for punitive damages, to which he has no
objection, so the motion to strike is granted as to the
request for punitive damages.
County College (“the College”) is a community
college located in Crystal Lake, Illinois. First Am. Compl.
(“Compl.”) ¶ 7. From November 7, 2011 to May
30, 2013, plaintiff Dane Klee was the Director for the Office
of Financial Aid and Veteran Services at the College.
Id. at ¶ 15. Klee's job included advising
the College's Executive Council on “all matters
related to student financial aid, ” monitoring the
College's portfolios, and developing scholarship programs
to attract students. Id. at ¶ 16. Before the
incidents giving rise to this case, Klee had never received
any reprimand or other adverse action from a supervisor.
Id. at ¶ 15.
early 2013, Klee “became aware” (the complaint
does not explain how) that the College was awarding federal
student aid to students who were not enrolled in the minimum
number of credits over the summer. Compl ¶ 17. Klee
verbally informed his immediate supervisor, Marianne Devenny
(her position or title are not identified), that these
students were receiving federal aid even though they were not
eligible. Id. at ¶18. Seeing no action taken by
late February 2013, Klee requested a report from the
College's IT department of all students who had received
federal student loans, and found numerous students who did
not meet the eligibility criteria for such loans.
Id. at ¶ 19. Klee then asked the IT department
to run a second report regarding students going as far back
as 1995, which found similar errors totaling nearly a million
dollars in aid. Id. at ¶ 20. Klee then emailed
his findings regarding the second report to Devenny and
Juletta Patrick, Devenny's supervisor (Ms. Patrick's
position or title are not provided). Id. at ¶
21. Devenny responded she would “take care of
it.” Id. at ¶ 22.
April 19, 2013, Klee was informed that the College's
administration recommended that his appointment not be
renewed for the following school year. Compl. ¶ 23. On
May 30, 2013, Klee was terminated, effective immediately, for
misuse of the College's computer systems. See
Compl. Ex. B. at 1. The termination notice, attached to the
complaint, states that Devenny and several other
administrators met with Klee on May 28 after he deleted his
social security number from his employee record, causing an
error in the payroll system that caused the entire system to
crash. See id. Klee alleges this reason for his
termination was pretextual (and, although unstated,
presumably the true reason is his whistleblowing activity).
Compl. ¶ 25. Klee filed this action on June 1, 2015.
raises two claims: first, that he was terminated in violation
of the False Claims Act's protection against retaliation,
31 U.S.C. § 3730(h) and second, that he was subject to a
retaliatory discharge in violation of state
The College moved under Federal Rule of Civil Procedure
12(b)(6) to dismiss both counts of the complaint. First, it
argues Klee has failed to state a plausible claim for any of
the elements of a retaliation claim under the FCA. Second,
the College argues that Klee's state law claim is
time-barred and that the College is immune under the Illinois
Tort Immunity Act (TIA), 745 ILCS 10/8-101.
order to survive a motion to dismiss, Klee must allege enough
facts to state a plausible claim. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007). A complaint may
proceed even if “it strikes a savvy judge that actual
proof of those facts is improbable, and that a recovery is
very remote and unlikely.” Id. However,
“a formulaic recitation of the elements of a cause of
action will not do.” Id. at 555. The Court
addresses Klee's two claims separately.
only federal claim is that he was terminated in violation of
31 U.S.C. § 3730(h), which provides that an employee may
not be “discharged. . . because of lawful acts done by
the employee. . . in furtherance of an action under this
section or other efforts to stop 1 or more violations of this
subchapter.” In order to prove a claim under this
section, Klee must allege facts supporting three findings:
(1) that his actions were taken in furtherance of an action
or to stop one or more violation of the FCA, (2) that his
employer knew he had engaged in such actions, and (3) that
his discharge was motivated, “at least in part, ”
by the protected activity. Fanslow v. Chi. Mfg. Ctr.,
Inc., 384 F.3d 469, 479 (7th Cir. 2004). The College
argues that Klee cannot prove any of these elements, but the
Court finds he has set forth sufficient (if barely)
allegations at this stage.
initial matter, the College argues Klee did not take actions
“in furtherance” of an FCA action because his
lawsuit was not filed until two years after the activities in
question. See United States ex rel. Batty v. Amerigroup
Ill., Inc., 528 F.Supp.2d 861, 877 (N.D. Ill. 2007).
However, the FCA was amended in 2009 to add a second category
of protected activity, namely “other efforts to
stop” violations of the FCA. See Halasa v. ITT
Educ. Servs., 690 F.3d 844, 847-48 (7th Cir. 2012). Klee
reported the College's fraud to his supervisor and later
followed up with both his supervisor and the supervisor's
supervisor. The Seventh Circuit has acknowledged that a
reasonable trier of fact could find reports to supervisors
were “efforts to stop potential FCA violations.”
Id. at 848. Reports to supervisors are a natural
first step to stopping fraudulent activity and, depending on
the employee's position and the employer's response,
may be the only activity they can engage in before filing
their lawsuit. See United States ex rel. Rockey v. Ear
Inst. of Chicago, LLC, 92 F.Supp.3d 804, 828 (N.D. Ill.
2015) (reports to supervisor sufficient to state ...