The People of the State of Illinois ex rel Leon A. Greenblatt, III v. Commonwealth Edison Company

Filing 25

MEMORANDUM Opinion and Order signed by the Honorable Amy J. St. Eve on 6/27/2011. Mailed notice (tlm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
THE PEOPLE OF THE STATE OF ILLINOIS,
ex rel. LEON A. GREENBLATT III,
Plaintiff,
v.
COMMONWEALTH EDISON COMPANY,
Defendant.

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Case No. 11 C 2009

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
Plaintiff Leon A. Greenblatt III (“Plaintiff”) has filed a motion to remand this case to the
Circuit Court of Cook County on the ground that Defendant Commonwealth Edison Company
(“ComEd”) untimely filed the notice of removal in violation of 28 U.S.C. § 1446(b), and for fees
and costs pursuant to 28 U.S.C. § 1447(c). For the reasons stated herein, the Court grants
Plaintiff’s motion for remand and denies the motion for fees and costs.
BACKGROUND
On April 25, 2007, Plaintiff filed this lawsuit in the Circuit Court of Cook County
pursuant to the Illinois Whistleblower Reward and Protection Act (“Whistleblower Act”), 740
ILCS § 175/4. (R. 1-2, Compl. ¶ 1.) As required by the Whistleblower Act, Plaintiff originally
filed the Complaint under seal. (R. 1-3, Pl.’s Mot. to Lift Seal ¶ 2.) Cook County Circuit Court
Judge Bill Taylor, who has presided over this case since its inception, lifted the seal on March
12, 2008. (R. 1-3, Order.) Plaintiff served ComEd with a copy of the Complaint on May 20,
2008. (R. 1-3, Def.’s Memo. in Support of its Mot. to Dismiss, at 3). The case proceeded in
Cook County Circuit Court for three years, with Judge Taylor denying ComEd’s Motion to

Dismiss on December 1, 2008. (R. 1-3, Order Denying Def.’s Mot. to Dismiss.) The parties
spent these years engaging in extensive fact discovery, which is now closed, and conducting
expert discovery, which was two months from completion when ComEd removed the case to this
court. (R. 14, Memo. in Support of Mot. to Remand, at 1.)
On March 23, 2011, ComEd filed a Notice of Removal pursuant to 28 U.S.C. § 1441, on
the basis of federal-question jurisdiction, under 28 U.S.C. § 1331. (R. 1, Not. of Removal ¶¶ 25.) ComEd contends that on February 22, 2011, in Plaintiff’s Second Supplemental Response to
Defendant Commonwealth Edison Company’s Rule 213(f)(3) Interrogatories (hereafter, the
“Interrogatory Response”), it discovered that Plaintiff’s state law claim now necessarily raises an
issue of federal law. (Id. at ¶ 6.) ComEd asserts that Plaintiff’s expert’s opinion, quoted in the
Interrogatory Response, transforms Plaintiff’s state law claim into a federal claim. (R. 1, Not. of
Removal ¶ 6.) ComEd alternatively suggests that even if Plaintiff is not asserting a federal
claim, the Interrogatory Response necessarily raises a question of federal law that requires
construction and interpretation of a federal statute under Grable & Sons Metal Products, Inc. v.
Darue Engineering & Manufacturing, 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257
(2005). (R. 1, Not. of Removal ¶ 6.) ComEd contends that this question of federal law is
substantial and disputed and did not exist at the time the Complaint was filed. (Id.)
Plaintiff has not amended his complaint and maintains that he alleges only a violation of
the Illinois Electricity Excise Tax Law, 35 ILCS 640/2-1 et seq., based on improper tax credits
ComEd took under the Illinois Public Utilities Act (“Illinois PUA”), 220 ILCS § 5/1-101 et seq.
(R. 14, Memo. in Support of Mot. to Remand, at 1.) Plaintiff filed a timely motion for remand
pursuant to 28 U.S.C. 1447(c) on April 20, 2011. (R. 13, Mot. to Remand ¶1.) Plaintiff
contends that there is no federal-question jurisdiction and that any federal issues involved are

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insubstantial. (Id.) Plaintiff further argues that even if federal-question jurisdiction was
appropriate, ComEd’s removal is untimely, as any implication of federal law has been present
since the inception of this suit. (Id.)
LEGAL STANDARD
Federal district courts are courts of limited jurisdiction. See U.S. CONST. art. III, § 2.
The Court has original subject matter jurisdiction only over actions concerning federal questions
arising under the Constitution, laws, or treaties of the United States. See 28 U.S.C. § 1331. A
defendant may remove a case filed in state court if the federal court would have had original
jurisdiction to hear the case. 28 U.S.C. § 1441(a). The moving party bears the burden of
establishing federal jurisdiction. Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th
Cir. 2009) (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)). Further, federal
courts should interpret the removal statute narrowly and resolve any doubt in favor of the
plaintiff’s choice of forum in state court. Id.
Notice of removal must be timely filed “within thirty days after the receipt by the
defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim
for relief.” 28 U.S.C. § 1446(b). Two reasons exist for the thirty day limitation. First, “[t]o
deprive the defendant of the undeserved tactical advantage that he would have if he could wait
and see how he was faring in state court before deciding whether to remove the case to another
court system.” Wilson v. Intercollegiate (Big Ten) Conference Athletic Ass’n, 668 F.2d 962, 965
(7th Cir. 1982). Second, the time limitation serves “to prevent the delay and waste of resources
involved in starting a case over in a second court after significant proceedings, extending over
months or even years, may have taken place in the first court.” Id. “If the case stated by the
initial pleading is not removable, a notice of removal may be filed within thirty days after receipt

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by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order
or other paper from which it may first be ascertained that the case is one which is or has become
removable.” 28 U.S.C. § 1446(b).
ANALYSIS
Congress enacted the Public Utility Regulatory Policies Act (“PURPA”) to encourage
“cogeneration, small power production, and other alternative sources of electric generation.” 16
U.S.C. § 824a-3. PURPA requires that utilities, such as ComEd, purchase energy from certain
“Qualified Facilities” at a rate that reflects the highest rate the utility would have paid for
equivalent service had it purchased the energy elsewhere. Id. at (b). This rate is known as the
“Avoided Cost.” See 18 C.F.R. § 292.101(b)(6). PURPA directs individual states to implement
its purpose, id. at (f)(1), and Illinois accomplishes this through state statute–the Illinois PUA,
220 ILCS § 5/1-101 et seq. The Illinois PUA created the Illinois Commerce Commission
(“ICC”) to implement its policies. 220 ILCS § 5/2-101. In order to encourage the development
of alternative energy production facilities, the State of Illinois further requires utilities, such as
ComEd, to purchase electricity from qualified solid waste energy facilities (“QSWEF”), when
possible. 220 ILCS §5/8-403.1. The Illinois PUA requires that utilities purchase energy from
QSWEF at the “Retail Rate,” as defined by the Illinois Administrative Code (“the Code”). See
220 ILCS § 5/8-403.1; see also 83 Ill. Adm. Code § 445.60(b). Under PURPA, however, a
utility cannot be required to pay a rate higher than the Avoided Cost rate. 16 U.S.C. § 824a-3(b).
In order to comply with PURPA, while still allowing utilities to pay the QSWEF Retail Rate, the
Illinois PUA has established a statutory tax credit scheme. See 220 ILCS § 5/8-403.1. The State
returns the amount the utility pays the QSWEF in excess of its Avoided Cost in the form of a
credit on the utility’s monthly energy excise tax. Id.

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In Plaintiff’s complaint, he claims ComEd has reported artificially low Avoided Cost
data to the ICC, taken improper tax credits pursuant to the Illinois PUA, and in so doing, has
deprived the State of Illinois of millions of dollars that it would have otherwise received under
the Illinois Electricity Excise Tax Law. (R. 1-2, Compl. ¶21.) Plaintiff alleges violations of
state law under the Whistleblower Act. (R. 13, Mot. to Remand ¶ 2.) Plaintiff does not allege
any violations of federal law. Indeed, Plaintiff argues that no federal cause of action exists under
PURPA to enforce Plaintiff’s claim that ComEd violated the Illinois Electricity Excise Tax Law.
(R. 14, Memo. in Support of Mot. to Remand, at 10.)
ComEd contends that Plaintiff’s expert disclosure indicated for the first time, on
February 22, 2011, that the federal statute, PURPA, would not only be relevant as statutory
background to the case, but would present a substantial and disputed federal question under
Grable. (R. 1, Not. of Removal ¶ 6.) The relevant portion of the Interrogatory Response which
ComEd claims “triggered removal” is Plaintiff’s expert witness James Wilson’s opinion that “the
cents per kilowatt hour values contained in the Rider 4 and Rider POG filings of ComEd . . . do
not accurately reflect ComEd’s Avoided Cost consistent with the definition in the federal
PURPA statute and regulations.” (R. 17, Def.’s Resp. to Mot. to Remand, at 5 (emphasis
added).)
I.

Federal Question
The Supreme Court has held that a federal cause of action is not a necessary condition for

federal-question jurisdiction. Grable, 545 U.S. at 314. In Grable, the Supreme Court held that a
dispute could satisfy 28 U.S.C. § 1441(a) if it involved a federal issue that was “actually
disputed and substantial.” Id. In Grable, a former landowner brought a quiet title action in state
court, arguing that the Internal Revenue Service (IRS) had not given him adequate notice as

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required by federal statute. Id. The common law quiet title action necessarily depended on an
interpretation of the federal tax law’s notice requirement. Id. Importantly, in Grable, the
interpretation of the federal law was the only contested issue. See 545 U.S. at 315.
The Supreme Court clarified Grable’s holding in Empire Healthchoice Assurance, Inc.,
v. McVeigh, 547 U.S. 677, 699, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006), noting that Grable
exemplifies a special and small category of cases because the federal question “was ‘an essential
element of [Grable’s] quiet title claim’; indeed, ‘it appear[ed] to be the only . . . issue contested
in the case.’” Empire Healthchoice, 547 U.S. at 700 (quoting Grable, 545 U.S. at 315). Here,
Plaintiff’s claim does not depend solely on an interpretation of federal law. The Illinois PUA
and the Code implement PURPA. The term Avoided Cost is separately defined in the Code and
thus has the full force of Illinois state law. See 83 Ill. Adm. Code 445.20 (2011). In Bennett v.
Southwest Airlines Co., 484 F.3d 907, 908, (7th Cir. 2007), plaintiffs brought tort suits in state
court for personal injuries resulting from an airplane crash. Defendants removed the case to
federal court, arguing that the claims arose under federal aviation safety law. Id. The Seventh
Circuit noted that Empire Healthchoice squelched the notion that Grable “brings within §1331
all actions in which federal law may play an important role.” Bennett, 484 F.3d at 910 (“What
the Court said about Grable in Empire Healthchoice can be said here too.”). As in Bennett, this
case presents “a fact-specific application of rules that come from both federal and state law
rather than a context-free inquiry into the meaning of a federal law.” Id. Furthermore, as the
Bennett Court found important, Plaintiff does not challenge the validity of any federal agency’s
or employee’s action. Id. at 910-11. As such, this case does not fall into the “slim category
Grable exemplifies.” Id. at 910 (citing Empire Healthchoice, 547 U.S. at 700). See Giles v.
Chicago Drum, Inc., 631 F. Supp. 2d 981 (N.D.Ill. 2009).

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The dispute in this case centers on the action of a utility, ComEd, and its compliance with
state statutes – the Illinois Electricity Excise Tax Law and the Illinois PUA. The Interrogatory
Response does not create a dispute between the definitions of Avoided Cost in PURPA and the
state codifications of Avoided Cost in Illinois PUA and the Code. Indeed, as ComEd brings to
the Court’s attention in its brief opposing this motion, it explored this issue with Plaintiff at his
deposition in October 2010, and Plaintiff specifically testified that he was not alleging any
conflict between PURPA and Illinois’s implementation of PURPA through the Illinois PUA and
the Code. (R. 17, ComEd’s Response to Mot. to Remand, at 11.) Despite ComEd’s contention,
the Interrogatory Response does not raise a federal issue that is actually disputed and substantial,
as required under Grable. 545 U.S. at 308. Additionally, as has long been recognized, a
plaintiff may avoid federal court even though certain federal questions may implicitly arise in his
or her claim, as long as the plaintiff is not artfully pleading in order to purposely avoid federal
court. See Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). There is no evidence
that Plaintiff has acted improperly here.
II.

Timeliness of Notice
Even if the Interrogatory Response raises a federal issue that requires construction and

interpretation of PURPA, what ComEd characterizes as a “newly discovered” federal question
was evident long before February 22, 2011. The exception to the thirty day limit for removal
states, “[i]f the case stated by the initial pleading is not removable, a notice of removal may be
filed within thirty days after receipt . . . of a copy of an amended pleading, motion, order or other
paper from which it may first be ascertained that the case is one which is or has become
removable.” 28 U.S.C. § 1446(b). As is evident from the language of the statute, if the initial
complaint is removable, this exception is not available and a defendant cannot remove beyond

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thirty days after receipt of the complaint, regardless of any later pleadings. The Seventh Circuit
has expressly noted that the “removal statute should be construed narrowly and any doubts about
the propriety of removing a particular action should be resolved against allowing removal.”
Wirtz Corp. v. United Distillers & Vintners North America, Inc., 224 F.3d 708, 715 (7th Cir.
2000). See also Northern Illinois Gas Co. v. Airco Industrial Gases, 676 F.2d 270, 273 (7th Cir.
1982). Both parties reference PURPA in nearly every document filed in this case. The
Complaint, which Plaintiff served on ComEd on May 20, 2008, draws attention to the
importance of PURPA in the first paragraph under the heading, “Factual and Legal
Background.” (R. 1-2, Compl. ¶ 7.)
The Interrogatory Response ComEd relies on as a “trigger” for removal conveys no
materially new information. ComEd claims the expert’s opinion that ComEd has reported
Avoided Costs (in their Rider 4 and Rider POG filings) that “do not accurately reflect ComEd’s
Avoided Cost consistent with the definition in the federal PURPA statute and regulations” raises
a new federal issue in this case. (R. 1-1, Pl.’s Second Supp. Resp. to Def. ComEd’s Rule
213(f)(3) Interrog. ¶ 3(ii) (emphasis added).) ComEd asserts that this statement suggests
Plaintiff’s claim now contends that the tax credits were “excessive only because ComEd
calculated them in a way that contravened the federal PURPA.” (R. 17, ComEd’s Resp. to Mot.
to Remand, at 2 (emphasis in original).) Plaintiff vehemently disagrees. (R. 13, Mot. to Remand
¶ 2.) Additionally, ComEd concludes that the claim is now purely federal because the
Interrogatory Response “does not address or even mention the governing PUA and Code
sections.” (Id. at 5.) Nearly identical wording alluding to PURPA and its definition of Avoided
Cost, however, has appeared in a number of documents far preceding February 22, 2011. On
October 15, 2008, for example, Plaintiff noted that he “discovered that ComEd included in its

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communications . . . data that understated ComEd’s Avoided Cost under PURPA.” (R. 1-3, Pl.’s
Opposition to Def.’s Mot. to Dismiss, at 3.) In that same brief, Plaintiff describes himself as “a
whistleblower who has learned that ComEd is understating its Avoided Cost under PURPA in
order to obtain unwarranted tax credits from the state,” id. at 6, and he states “this Court must
simply determine whether ComEd understated its Avoided Cost under PURPA to the Illinois
Department of Revenue.” (Id.) Plaintiff explicitly highlighted PURPA’s importance by
summarizing the “core allegations” of his Complaint in that brief as follows: “ComEd’s true
Avoided Costs under PURPA were understated in order to receive inflated tax credits.” (Id. at
11.) Additionally, ComEd acknowledged Plaintiff’s “core allegations” in its reply brief, filed
November 6, 2008, noting, “Plaintiff’s attack is in fact directly on the ‘Avoided Costs under
PURPA.’” (R. 1-3, Def. ComEd’s Reply in Support of its Mot. to Dismiss, at 2.) This issue has
thus figured prominently in the litigation of this dispute since November 2008.
If a federal question existed as to the interpretation of Avoided Cost as defined by the
federal statute PURPA, ComEd’s own briefs demonstrate that it was evident as early as
November 2008.1 The Interrogatory Response does not convey any materially new information.
What ComEd is relying on is not Plaintiff’s claim, but the conclusions of Plaintiff’s expert
witness. Whether an expert may offer legal conclusions as to what PURPA requires and whether
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In fact, both Plaintiff and ComEd have reiterated throughout the course of this lawsuit that
there is no significant distinction between the various definitions of Avoided Cost. As far back
as November 6, 2008, in its briefing in support of its Motion to Dismiss, ComEd asserted that
“[o]ne Avoided Cost Rate exists: it is determined according to the Illinois Administrative Code,
as implemented by PUA and directed by PURPA.” (R. 1-3, Def.’s Reply in Support of Mot. to
Dismiss, at 8.) ComEd also stated that “the Avoided Cost Rate . . . is the rate mandated by
PURPA, implemented by PUA and used to calculate the tax credit,” id. at 6, and further, “Rider
4 is ComEd’s Avoided Cost Rate . . . and it clearly references 83 Illinois Administrative Code
Part 430, which by Plaintiff’s own admission implements PUA, which in turn implements
PURPA.” (Id. at 7.)

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ComEd is in compliance with it is an evidentiary question that is more properly a matter for the
state court.2 See generally Good Shepard Manor Found., Inc. v. City of Momence, 323 F.3d 557,
564 (7th Cir. 2003). At least one court in this district has found remand appropriate under
similar circumstances because the expert disclosures referring to federal statutes presented no
materially new information. See Badal v. Hinsdale Mem’l Hosp., No. 06 C 7614, 2007 U.S.
Dist. LEXIS 34713, at *12 (N.D. Ill. May 8, 2007.) Thus, any federal claim, if there ever was
one, existed long before February 22, 2011. ComEd has failed to comply with the thirty day
time requirement of 28 U.S.C. § 1446(b).
III.

Attorney Fees and Costs
Plaintiff also requests costs and attorneys’ fees pursuant to 28 U.S.C. § 1447(c), which

provides, “[a]n order remanding the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the removal.” An award of fees does
not require a showing of bad faith. Tenner v. Zurek, 168 F.3d 328, 330 (7th Cir. 1999). In
contrast to caselaw cited by Plaintiff in support of this motion, however, the Supreme Court has
held that a prevailing plaintiff in a motion to remand is not presumptively entitled to attorneys’
fees and costs under § 1447(c). See Martin v. Franklin Capital Corp., 546 U.S. 132, 136, 126
S.Ct. 704, 163 L.Ed.2d 547 (2005). In Martin, the Supreme Court specifically abrogated the
standard previously followed in the Seventh Circuit. Id. at 136 (considering, but rejecting, the
standard in Sirotzky v. New York Stock Exchange, 347 F.3d 985, 987 (7th Cir. 2003), which
holds when removal is improper, there is a presumption in favor of awarding fees to plaintiff).

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In his reply brief, Plaintiff asserts that the Interrogatory Response is in rebuttal to ComEd’s
Filed Rate Doctrine defense, and thus cannot stand as the basis for removal.  (R. 22, Reply in
Support of Mot. for Remand, at 8.) The Court need not address this argument in reaching its
ruling.

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The Supreme Court held that § 1447(c) imposes neither a presumption in favor of remand fee
awards nor against fee awards. 546 U.S. at 138-39 (“The statutory language strikes us as more
evenly balanced between a pro-award and anti-award position . . . we see nothing to persuade us
that fees under § 1447(c) should either usually be granted or usually be denied”). The Court in
Martin determined that a court should award fees only where the removing party “lacked an
objectively reasonable basis for seeking removal.” Martin, 546 U.S. at 141. Whether to award
attorneys’ fees is within the discretion of the court. Tenner, 168 F.3d at 330.
The Seventh Circuit has applied this “objectively reasonable” test by comparing it to the
qualified immunity doctrine, which assumes that state officials have knowledge of existing case
law and holds them liable only if their actions violate clearly established and particularized
rights. Lott v. Pfizer, Inc., 492 F.3d 789, 793-94 (7th Cir. 2007). Both the qualified immunity
doctrine and the objectively reasonable standard put forth in Martin balance the competing
interests between discouraging those who knowingly ignore or violate the law, while still
allowing reasonable errors without fear of litigation. Id. at 793. Specifically, the “removal
statute encourages litigants to make liberal use of federal courts, so long as the right to remove is
not abused.” Id. at 793. Thus, the Seventh Circuit sets out appropriate guidance for determining
what is to be considered “objectively reasonable.” Id. “As a general rule, if, at the time the
defendant filed his notice in federal court, clearly established law demonstrated that he had no
basis for removal, then a district court should award a plaintiff his attorneys’ fees.” Id.
Alternatively, “if clearly established law did not foreclose a defendant’s basis for removal, then a
district court should not award attorneys’ fees.” Id. See also Wolf v. Kennelly, 574 F.3d 406,
411-13 (7th Cir. 2009).

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The cases cited by Plaintiff in support of his motion for costs and fees are substantially
different than the facts of this case – and, as mentioned previously, Plaintiff cites outdated cases
that are no longer good law. Based on Plaintiff’s arguments, the Court cannot say that there is
clearly established law demonstrating that there was no basis for removal. Although ComEd’s
basis for removal is insufficient and untimely, ComEd’s argument for removal is not objectively
unreasonable, under the standard set out by Martin. For these reasons, the Court exercises its
discretion not to award costs and fees in this case.
CONCLUSION
For the foregoing reasons, the Court grants Plaintiff’s motion and remands this case to
the Circuit Court of Cook County. The Court denies Plaintiff his costs and attorney fees
pursuant to 28 U.S.C. § 1447(c).

Date: June 27, 2011

ENTERED

_______________________________
AMY J. ST. EVE
United States District Court Judge

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