Prince v. Rescorp Realty, No. 90-3082

• Decision Date: 29 October 1991
• Docket Number: No. 90-3082
• Citation: 940 F.2d 1104
• Parties: 120 Lab.Cas. P 56,788 Anthony PRINCE, Plaintiff-Appellant, v. RESCORP REALTY, an Illinois Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1104

940 F.2d 1104

120 Lab.Cas. P 56,788

Anthony PRINCE, Plaintiff-Appellant, v. RESCORP REALTY, an Illinois Corporation, Defendant-Appellee.

No. 90-3082.

United States Court of Appeals Seventh Circuit.

Argued Feb. 26, 1991.

Decided Aug. 23, 1991.

Rehearing and Rehearing En Banc

Denied Oct. 29, 1991.

Jennifer P. Sodaro (argued), Chicago, for plaintiff-appellant.

Steven H. Adelman (argued), Judith L. Gallo, Faith L. Kalman, Keck, Mahin & Cate, Chicago, for defendant-appellee.

Before FLAUM, RIPPLE and MANION, Circuit Judges.

RIPPLE, Circuit Judge.

An employee sued his employer for retaliatory discharge. The district court dismissed the action on the ground that the employee's discharge did not contravene a clearly mandated public policy, an essential element to any retaliatory discharge claim under the law of Illinois. For the following reasons, we reverse the judgment of the district court.

I BACKGROUND

Rescorp Realty (Rescorp) employed Anthony Prince as chief engineer for one of its properties, a high rise apartment building located in Oak Park, Illinois. After returning from vacation, Mr. Prince discovered that the management had installed a timing mechanism on the building's fire safety system. The system pressurized the air in the corridors of the building so as to confine a potential fire to its origin and prevent it from spreading. The newly installed timer turned off the system from late evening until early morning. Mr. Prince believed that use of this timer breached agreements between the building developer and the Village of Oak Park and constituted a fire hazard. He expressed his concern to the building manager, and, after receiving little or no response, contacted Oak Park officials directly. As a result, the officials directed Rescorp to remove the timer. Approximately two years later, Rescorp fired Mr. Prince. ¹

Mr. Prince filed a two-count complaint against Rescorp in the Circuit Court of Cook County, Illinois. Count I asserted a state claim for retaliatory discharge. Mr. Prince contended that he was terminated in retaliation for reporting a violation of the Oak Park Building Code. Count II alleged breach of a collective bargaining agreement. Rescorp removed the action to federal court based on Count II--a federal question under section 301 of the Labor Management Relation Act--and the district court invoked the doctrine of pendent jurisdiction over the state claim. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Once in federal court, Rescorp moved to dismiss both counts for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). The district court granted the motion on both counts, but also granted Mr. Prince's motion to amend his complaint. In his amended complaint, Mr. Prince repled the state retaliatory discharge claim, but chose not to pursue the federal claim. ² Thereafter, the district court granted Rescorp's motion to dismiss the amended complaint.

The court had dismissed the retaliatory discharge claim in the original complaint because the Oak Park Building Code "failed to evince a clearly mandated public policy" affecting "citizens of the state collectively," a requisite to any retaliatory discharge claim in Illinois. Tr. of May 29, 1990 at 4. The court reached this conclusion based on the "absence of statewide policy embodying the concerns of the Oak Park Building Code" and the Illinois Supreme Court's "repeated warnings against expansion of the retaliatory discharge tort." Id. As for the amended complaint, the district court noted that it attempted to remedy the inadequacy of the original complaint by alleging that the State Fire Marshal Act, Ill.Rev.Stat., ch. 127 1/2, paras. 9, 14, enunciates a clearly mandated public policy affecting the state's citizens. The district court rejected this argument, however, because that Act "merely imposes a duty upon the Department of Law Enforcement to issue fire prevention regulations" and does not itself establish any regulations. Tr. of Aug. 21, 1990 at 4. Mr. Prince now appeals the dismissal of his amended complaint.

II ANALYSIS

A. Standard of Review

The district court granted Rescorp's motion to dismiss the amended complaint for failure to state a claim upon which relief can be granted. We review the grant of a motion to dismiss de novo. Villegas v. Princeton Farms, Inc., 893 F.2d 919, 924 (7th Cir.1990); Corcoran v. Chicago Park Dist., 875 F.2d 609, 611 (7th Cir.1989). It is well settled that, when reviewing the grant of a motion to dismiss, we must assume the truth of all well-pleaded factual allegations and make all possible inferences in favor of the plaintiff. Janowsky v. United States, 913 F.2d 393, 395 (7th Cir.1990); Rogers v. United States, 902 F.2d 1268, 1269 (7th Cir.1990). A complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

B. Merits

The pendent state claim is a tort action governed by Illinois law. Thus, we look to Illinois law to determine whether Mr. Prince has pled a cognizable retaliatory discharge claim. See Belline v. K-Mart Corp., 940 F.2d 184, 185 (7th Cir.1991); see also Barnes v. Callaghan & Co., 559 F.2d 1102, 1105 & n. 4 (7th Cir.1977); Woodmen of World Life Ins. Soc. v. Great Atl. & Pac. Tea Co., 561 F.Supp. 640, 641-42 (N.D.Ill.1982). The Supreme Court of Illinois first recognized the tort of retaliatory discharge in Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978). Post-Kelsay decisions have narrowly construed the tort and restricted its expansion, see Barr v. Kelso-Burnett Co., 106 Ill.2d 520, 88 Ill.Dec. 628, 630, 478 N.E.2d 1354, 1356 (1985); Lambert v. City of Lake Forest, 186 Ill.App.3d 937, 134 Ill.Dec. 709, 711, 542 N.E.2d 1216, 1218 (1989), app. granted, 128 Ill.2d 664, 139 Ill.Dec. 514, 548 N.E.2d 1070 (1990). This court recently has recognized this approach of the Illinois courts, see Villegas v. Princeton Farms, Inc., 893 F.2d 919, 925 (7th Cir.1990), ³ and we shall not circumvent these state decisions by expanding the cause of action. See id. We have the duty to make an independent assessment ⁴ as to whether the Supreme Court of Illinois would recognize such a cause of action on the facts set forth in the first amended complaint.

Under Illinois law, an employee must demonstrate two elements to establish a cause of action for retaliatory discharge: "(1) that the employee was discharged in retaliation for the employee's activities; and (2) that the discharge is in contravention of a clearly mandated public policy." Lambert, 134 Ill.Dec. at 711, 542 N.E.2d at 1218. Rescorp contends that both elements are missing.

As to the first element, Rescorp argues that Mr. Prince "failed to specifically allege that his discharge was causally related to his reporting of a claimed violation of the Oak Park Building Code." Appellee's Br. at 6 n. 1. The district court did not address this element directly. Rescorp is technically correct: Mr. Prince's complaint does not specifically allege a casual connection between his termination and his notifying Oak Park officials. Such an explicit statement, however, is not required. See Bragado v. Cherry Elec. Prod. Corp., 191 Ill.App.3d 136, 138 Ill.Dec. 476, 478-79, 547 N.E.2d 643, 645-46 (1989). Mr. Prince's amended complaint "spell[s] out the course of events which led to [his] discharge" and indicates that he faithfully performed all conditions of his employment and did not breach any duties owed to Rescorp. Id. at 645. Thus, we are convinced that a "fair reading of the complaint" informs Rescorp that Mr. Prince's discharge was triggered when he reported the Oak Park Building Code violation. Id. 138 Ill.Dec. at 478-79, 547 N.E.2d at 645-46.

The second element is the principal focus of this appeal. The district court dismissed the retaliatory discharge claim in both the original and amended complaints because, in its view, Mr. Prince's termination was not in contravention of a clearly mandated public policy. The court thus rejected Mr. Prince's argument that his termination violated clear public policy mandates embodied in both the Oak Park Building Code and the State Fire Marshal Act.

The district court was not faced with an easy task. Determining what is clearly mandated public policy is difficult; indeed, the concept "has been called the Achilles heel of the principle underlying the tort of retaliatory discharge." Hicks v. Resolution Trust Corp., 736 F.Supp. 812, 815 (N.D.Ill.1990). However, on the precise application before us, we are aided significantly by several Illinois decisions. In Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876 (1981), the Illinois Supreme Court recognized a cause of action for retaliatory discharge when an employee was discharged for informing officials of possible criminal activity of a co-employee and agreeing to assist in the investigation. The Palmateer court acknowledged that "there is no precise definition" of clearly mandated public policy, but generally it can be said that public policy concerns what is right and just and what affects the citizens of the State collectively. It is to be found in the State's constitution and statutes and, when they are silent, in its judicial decisions.... [A] matter must strike at the heart of a citizen's social rights, duties, and responsibilities before the tort will be allowed.

....

The cause of action is allowed where the public policy is clear, but is denied where it is equally clear that only private interests are at stake.

Id. 52 Ill.Dec. at 15-16, 421 N.E.2d at 878-79; see Zientara v. Long Creek Township, 211 Ill.App.3d 226, 155 Ill.Dec. 688, 693-94, 569 N.E.2d 1299, 1304-05, 1307 (1991). Another Illinois decision, Lambert, synthesized...