United States District Court, N.D. Illinois, Eastern Division
ERIC A. COHEN, Plaintiff,
POWER SOLUTIONS INTERNATIONAL, INC., Defendant.
OPINION AND ORDER
L. Ellis Judge
Defendant Power Solutions International, Inc.
(“PSI”) fired Plaintiff Eric A. Cohen, Cohen
filed suit against PSI. Cohen alleges that PSI fired him
because he was a whistleblower: prior to his termination, he
reported to senior executives at PSI and PSI's Board of
Directors that he had discovered widespread fraud and
malfeasance at the company. PSI now moves for judgment on the
pleadings with regard to Counts II and IV of Cohen's
complaint. Three of the counts in Cohen's complaint are
relevant for the purpose of deciding this motion. All of
those counts involve claims for retaliation, in violation of
(1) the Sarbanes-Oxley Act (“SOX”), 18 U.S.C.
§ 1514A (Count I); (2) the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 (“DFA”), 15
U.S.C. § 78u-6 (Count II); and (3) Illinois common law
the parties fully briefed this motion, the Supreme Court
issued a conclusive decision regarding the DFA. See
Digital Realty Trust, Inc. v. Somers, __ U.S. __, 138
S.Ct. 767, 772, 200 L.E.2d 15 (2018). Cohen then withdrew his
opposition to PSI's motion regarding the DFA claim (Count
II), and this Court granted judgment in favor of PSI
regarding Count II. Thus, all the Court must decide is
whether to grant judgment on the pleadings with regard to
Count IV, Cohen's Illinois common law claim for
retaliatory discharge. PSI argues that Cohen's SOX claim
provides an adequate alternative remedy, and so Illinois law
precludes a common law retaliatory discharge claim for the
same act of retaliation. Cohen responds that the claims are
distinct in that they require a plaintiff to prove different
elements, and cover different portions of protected conduct
that ultimately led to his retaliatory discharge. Because the
Court finds that Cohen has an adequate alternative remedy in
SOX, the Court grants judgment in favor of PSI on Count IV.
acted as PSI's Chief Operating Officer from April 2012
through May 2016. Although Cohen's work experience at PSI
was positive for the first few years, the relationship soured
in early 2016, when Cohen became suspicious of PSI's
financial dealings after learning that PSI was experiencing a
cash shortage and severe revenue fluctuation. Upon
investigation, Cohen discovered that PSI had engaged in sham
transactions, channel-stuffing, and other financial and
early 2016, Cohen reported his concerns to senior executives
at PSI, as well as PSI employees. He also presented them to
PSI's Board of Directors and Audit Committee on April 28,
2016. On May 2, 2016, PSI's then-CEO Gary Winemaster
provided Cohen with an “Action Plan” conveniently
dated April 27, 2016, which set forth various complaints
about Cohen's over the past six months. Winemaster told
Cohen that the PSI Board wanted the Action Plan. This was the
first time Cohen had received any complaints about his
performance at PSI. Though the Action Plan is dated April 27,
2016, no one raised the issues described in the Action Plan
at the meeting of PSI's Board and Audit Committee on
April 27 and 28, which Cohen attended.
responded to the Action Plan on May 5, 2016 in a
“point-by-point letter” that reiterated
Cohen's general concerns about PSI's financial and
accounting practices. On May 13, 2016, PSI's Chief Legal
Counsel William Buzogany responded to Cohen's May 5
letter, instructing him to comply with the Action Plan. Cohen
met with Buzogany and Winemaster on May 16, 2016. At this
meeting, Winemaster and Buzogany fired Cohen. After being
fired, Cohen sent the Board another letter, again detailing
the misconduct he believed was occurring at PSI and stating
that PSI fired him because he reported this misconduct.
motion for judgment on the pleadings under Rule 12(c) of the
Federal Rules of Civil Procedure is governed by the same
standards as a motion to dismiss for failure to state a claim
under Rule 12(b)(6).” Adams v. City of
Indianapolis, 742 F.3d 720, 727-28 (7th Cir. 2014). A
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
urges this Court to grant judgment in its favor with regard
to Cohen's common law retaliatory discharge claim.
According to PSI, Cohen's SOX claim provides an adequate
alternative remedy that precludes a common law retaliatory
discharge claim under Illinois law. Cohen responds that the
two claims are distinct from each other because the elements
required to satisfy each claim are different.
courts do not permit common law claims for retaliatory
discharge where there is an adequate alternative remedy
available that renders the common law remedy superfluous.
See Zwick v. Inteliquent, Inc., 83 F.Supp.3d 804,
809 (N.D. Ill. 2015); Stebbings v. Univ. of Chicago,
726 N.E.2d 1136, 1141, 312 Ill.App.3d 360, 244 Ill.Dec. 825
(2000). In Stebbings, the Illinois Appellate Court
noted that “a court might even be obligated to dismiss
the claim in such a situation, for one of the factors that a
court considers in deciding whether to allow a retaliatory
discharge claim is the existence of an adequate alternative
remedy.” 726 N.E.2d at 1141. Multiple courts in this
District, including this Court, have found that common law
retaliatory discharge claims cannot stand when the plaintiff
also claims that the retaliation violates a statutory right.
See O'Risky v. Mead Johnson Nutrition Co., No.
17 C 1046, 2017 WL 3421552, *4 n.2 (N.D. Ill. Aug. 8, 2017)
(noting in dicta that the plaintiff had adequate
statutory remedies under SOX, precluding any common law
claim); Zwick, 83 F.Supp.3d at 809 (same);
McCormack v. Medcor, Inc., No. 14 CV 3551, 2014 WL
5622172, at *3, 6 (N.D. Ill. Nov. 4, 2014) (holding that the
plaintiff's remedies under the FMLA and ADA precluded
recovery under a common law retaliation claim).
argues that the Seventh Circuit ruled that alternative forms
of relief do not bar common law retaliation claims. Doc. 39
at 7. The cases that Cohen cites in favor of this proposition
are all distinguishable. For example, in Brandon v.
Anesthesia & Pain Management Associates, Ltd., the
Seventh Circuit did allow the plaintiff's common law
claim to proceed, but it did so in light of the fact that it
was “unclear at best” that the plaintiff actually
had a viable alternative remedy under the False Claims Act.
277 F.3d 936, 945 (7th Cir. 2002). The Brandon court
acknowledged that an adequate alternative remedy is
“one of many factors” that courts consider
“in a pragmatic approach toward determining when the
tort of retaliatory discharge will lie.” Id.
In Arres v. IMI Cornelius Remcor, Inc., the circuit
court again considered a situation where the plaintiff had
brought a common law retaliation claim and the defendant
argued that the possibility of a statutory remedy precluded
the common law claim. 333 F.3d 812, 813 (7th Cir. 2003). The
court noted that “the availability of a federal remedy
does not automatically preclude a state retaliatory-discharge
claim, ” but it noted this in light of the fact that
the federal claim did not necessarily apply to the plaintiff.
Id. at 814. Finally, the same situation occurred in
U.S. ex rel. Rockey v. Ear Institute of Chicago, the
third case Cohen cites. 92 F.Supp.3d 804, 829 (N.D. Ill.
2015) (whether the FCA provides the plaintiff “with an
adequate remedy remains ‘unclear, ' and thus her
possibly valid FCA retaliation claim is an insufficient
ground on which to dismiss her state law retaliation
the situations in the cases cited above, here, Cohen alleges
that his termination did violate a federal
statute-specifically, SOX. And, as noted above, courts in
this District have already found that SOX provides adequate
alternative remedies, rendering a common law retaliation
claim unnecessary. Zwick, 83 F.Supp.3d at 809.
Cohen's attempts to distinguish these cases are not
persuasive. For example, Cohen attempts to distinguish
Zwick by arguing that the defendants in that case
did not dispute that the plaintiffs conduct was statutorily
protected. Doc. 39 at 9. However, this is merely noting that
the defendants did not move to dismiss that count-a fact that
the Zwick defendants actually have in common with
PSI. This ties into Cohen's more general argument that,
because the claims require the plaintiff to prove different
elements, the claims are distinct from each other and so the
common law claim should survive. It is true that the conduct
protected by the statute may differ slightly from the conduct
protected by a common law retaliatory discharge claim (for
example, Cohen points out that situations where he reported
PSI's financial wrongdoing to employees who did not have
supervisory authority would not be covered by SOX). However,
both claims arise out of the same termination. Even though
the protected conduct is not exactly the same, it is
substantially similar. Both claims rely on Cohen's
reports to various employees and ...