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State ex rel. Edmondson v. Board of Trustees of Illinois Eastern Community Colleges

Court of Appeals of Illinois, Fifth District

August 14, 2019

THE STATE OF ILLINOIS ex rel. PHILLIP E. EDMONDSON, Plaintiff-Appellee,
v.
BOARD OF TRUSTEES OF ILLINOIS EASTERN COMMUNITY COLLEGES, Defendant-Appellant.

          Appeal from the Circuit Court of St. Clair County. No. 16-CH-198. Honorable Stephen P. McGlynn, Judge, presiding.

          Attorneys for Appellant Mary Clare G. Bonaccorsi, Britton L. St. Onge, Polsinelli P.C., Noam B. Fischman, Polsinelli P.C.

          Attorney for Appellee David B. Helms, German May PC

          JUSTICE CHAPMAN delivered the judgment of the court, with opinion. Justices Cates and Barberis concurred in the judgment and opinion.

          OPINION

          CHAPMAN JUSTICE.

         ¶ 1 The relator, Phillip E. Edmondson, filed this action under the Illinois False Claims Act (740 ILCS 175/1 et seq. (West 2014)). The defendant, the Board of Trustees of Illinois Eastern Community Colleges, is a community college district. The definition of the "State" in the False Claims Act includes community college districts. Id. § 2(a). The defendant filed a motion to dismiss, arguing that the court lacked subject matter jurisdiction. The trial court denied the motion. The defendant filed a motion to reconsider or, alternatively, to certify a question for review. See Ill. S.Ct. R. 308(a) (eff. July 1, 2017). The court certified the following question for our review: "Can an entity defined as the 'State' under the Illinois False Claims Act also be considered a 'person' liable to the State under that same Act?" We hold that an entity included in the False Claims Act's definition of the "State" is also a "person" that may be held liable to another such entity unless the two entities are, in reality, one entity. We therefore answer the certified question in the affirmative, and we affirm the trial court's ruling.

         ¶ 2 I. BACKGROUND

         ¶ 3 The defendant in this case is a community college district that includes four community colleges. According to the allegations in the relator's complaint, the majority of the students who attend these four colleges live within the district. The complaint also alleges that the defendant board of trustees is locally elected and that the defendant receives the majority of its funding from tuition, fees, and local taxes. However, the defendant also receives state funding through grant programs. The issue in the relator's complaint is the defendant's eligibility for the amount of grant money it received.

         ¶ 4 The relator is a former instructor in the defendant's Workforce Education program. He taught mine safety training classes. Miners are required to take eight hours of safety training annually under both state and federal law. The relator taught these classes for the defendant between 2002 and 2013.

         ¶ 5 In 2016, the relator filed a complaint against the defendant under the Illinois False Claims Act (740 ILCS 175/1 et seq. (West 2014)). He alleged that the defendant defrauded the State of Illinois by claiming that miners took mine safety classes they never actually took and by inflating the number of hours of training received by miners who did take the classes. The relator explained that the defendant received funding under three state grant programs. He explained that the amount of funding community college districts qualify for under all three programs depends on the number of credit hours (or the equivalent) completed by its students. He alleged that because the defendant fraudulently overstated the hours of training miners received, it received substantially more funding than it was entitled to under the three grant programs.

         ¶ 6 The defendant filed a motion to dismiss the relator's complaint. The defendant argued, as it does in this appeal, that because it falls within the broad statutory definition of the "State," the case does not present a justiciable controversy between two different parties with adverse interests. As such, the defendant argued, the trial court lacked jurisdiction to consider the case. The court denied the motion.

         ¶ 7 The defendant filed a motion to reconsider or, in the alternative, to certify a question for interlocutory review under Illinois Supreme Court Rule 308 (eff. July 1, 2017). The court denied the motion to reconsider but granted the motion to certify a question. As stated previously, the question certified for our review is: "Can an entity defined as the 'State' under the Illinois False Claims Act also be considered a 'person' liable to the State under that same Act?" We turn our attention now to answering that question.

         ¶ 8 II. ANALYSIS

         ¶ 9 When deciding an appeal under Illinois Supreme Court Rule 308, the scope of our review is limited to answering the certified question. People ex rel. Levenstein v. Salafsky, 338 Ill.App.3d 936, 941-42 (2003). Because certified questions present issues of law, we apply a de novo standard of review. Id. at 942. Resolution of the question presented in this case requires us to construe provisions of the False Claims Act. Our goal in doing so is to ascertain the intent of the legislature. The best indication of legislative intent is the statutory language itself. Id. If that language is clear and unambiguous, it must be given its plain and ordinary meaning. If there is any ambiguity, however, we may consider aids of statutory construction such as legislative history. Id. We must also presume that the legislature did not intend an unjust or absurd result. Township of Jubilee v. State of Illinois, 2011 IL 111447, ¶ 36.

         ¶ 10 The False Claims Act provides that "any person" is liable to the State if that person knowingly presents a false or fraudulent claim to the State. 740 ILCS 175/3(a)(1) (West 2014). The statutory definition of "claims" includes demands or requests for money or property presented to agents or officials of the State and, under certain circumstances, requests for money or property made to recipients of State funds. Id. § 3(b)(2)(A)(i), (ii). A private relator may file a civil action for violations of the False Claims Act. Id. § 4(b)(1). The relator has the right to conduct the action if the Attorney General declines to do so (id. § 4(b)(4)(A), 4(c)(3)) and is entitled to be awarded a portion of any eventual recovery (id. § 4(d)). However, actions by private relators must be brought in the name of the State (id. § 4(b)(1)), and the State is the real party in interest in such actions (see State ex rel. Beeler, Schad & Diamond, P.C. v. Burlington Coat Factory Warehouse Corp., 369 Ill.App.3d 507, 513 (2006)).

         ¶ 11 Originally, the False Claims Act's definition of the "State" included only the State of Illinois. See Ill. Rev. Stat. 1991, ch. 127, ¶ 4102. It now provides a broad statutory definition of the "State," which includes the State of Illinois, state agencies, and the state university system, as well as several types of local entities-school districts, community college districts, counties, municipalities, municipal corporations, and units of local government. 740 ILCS 175/2(a) (West 2014). The defendant, as a community college district, falls within this broad definition. There is no doubt that a private relator can bring a False Claims Act suit to recover damages on behalf of a local entity like the defendant that is included in that definition. See Lyons Township ex rel. Kielczynski v. Village of Indian Head Park, 2017 IL App (1st) 161574, ¶ 14. The question in this case is whether the broad definition of the "State" means that an entity such as the defendant cannot be a "person" subject to liability under the False Claims Act in cases where it is alleged to have made fraudulent claims against another entity that is also included in that definition.

         ¶ 12 The False Claims Act does not define the term "person." Under general principles of Illinois law, however, individuals and "bodies politic and corporate" may be included within the definition of" '[p]erson.'" 5 ILCS 70/1.05 (West 2014). The Public Community College Act provides that "[t]he board of each community college district is a body politic and corporate" that "may sue and be sued in all courts and places where judicial proceedings are had." 110 ILCS 805/3-11 (West 2014). Thus, for most purposes, a community college district such as the defendant is a "person" under Illinois law.

         ¶ 13 As we have already discussed, however, under the False Claims Act, both the State of Illinois, which is the real plaintiff in this case, and the defendant are included within the statutory definition of the "State." The defendant argues that, giving this statutory definition its plain and unambiguous meaning, the State of Illinois and the defendant must be deemed to be the same entity. As the defendant correctly points out, a controversy between parties that are, in reality, the same entity is not a justiciable matter due to "the long-recognized general principle that no person may sue himself." United States v. Interstate Commerce Comm'n, 337 U.S. 426, 430 (1949). It is worth noting that, ordinarily, a suit by a community college district against a state agency is considered a justiciable controversy between separate entities. See, e.g., Board of Trustees of Community College District No. 502 v. Department of Professional Regulation, 363 Ill.App.3d 190 (2006). The question before us, then, is whether the broad statutory definition of the "State" found in the False Claims Act is sufficient to transform what are otherwise two distinct entities-the State of Illinois and a local community college district-into one entity for purposes of False Claims Act liability. If our answer to that question is yes, then we would have to conclude that the trial court lacks jurisdiction over the relator's suit. See Ill. Const. 1970, art. VI, § 9 (providing that Illinois circuit courts have jurisdiction over "all justiciable matters"). For the reasons that follow, however, we conclude that the answer to this question is no.

         ¶ 14 The defendant argues that by including local entities such as community college districts in the broad statutory definition of the "State," the legislature clearly evinced an intent to exclude them from liability under the False Claims Act. In support of this contention, the defendant correctly notes that the legislature is presumed to understand existing case law when it enacts legislation. See Guzman v. 7513 West Madison Street, Inc., 2013 IL App (1st) 122161, ΒΆ 37. The defendant argues that we must therefore presume that the legislature understood the principle that a party cannot sue itself when it enacted the current version of the statute defining the "State." As such, the defendant argues, we must also presume that the legislature knew that the effect of including various state and local entities in the ...


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