Brandon v. Anesthesia & Pain Management Associates, Ltd.

In the

United States Court of Appeals

For the Seventh Circuit

No. 00-2486
Michael Brandon, M.D.,
Plaintiff-Appellant,
v.
Anesthesia & Pain Management

Associates, Ltd., Kumar S. Ravi,

M.D., James R. Boivin, M.D., and

Kathleen H. Slocum, M.D.,
Defendants-Appellees.
Appeal from the United States District Court

for the Southern District of Illinois.

No. 97-CV-1004–G. Patrick Murphy, Chief Judge. 
Argued April 18, 2001–Decided January 18, 2002
  Before Harlington Wood, Jr., Diane P. Wood,

and Williams, Circuit Judges.
  Diane P. Wood, Circuit Judge.  Dr. Michael

Brandon was employed as an

anesthesiologist by Anesthesia & Pain

Management Associates (APMA). After

discovering that certain APMA doctors

seemed to be falsifying the bills they

submitted to Medicare, he brought his

concerns to the attention of the APMA

shareholders. This led in short order

first to problems at work and later to

his discharge. Believing that the

discharge was in retaliation for his

airing of the Medicare issue, Brandon

filed a lawsuit claiming that the

defendants had committed the Illinois

tort of retaliatory discharge. A jury

found in his favor, but not long

afterward the district court granted

APMA’s motion for judgment as a matter of

law and vacated the jury verdict. The

court found as a matter of law that the

Illinois Supreme Court would not

recognize a retaliatory discharge claim

under the circumstances of Brandon’s

case. In our view, the district court was

mistaken on this critical question of

Illinois law; we therefore reverse the

grant of the Rule 50 motion and order the

jury’s verdict to be reinstated.

Furthermore, we conclude that the trial

court should not have dismissed the

punitive damage claims, which we remand

for further proceedings.
I
  Brandon began working as an

anesthesiologist for APMA in September

1993. APMA provides anesthesia services

to patients at St. Elizabeth’s Hospital

in Belleville, Illinois; approximately

45% of its patients are Medicare

recipients. When Brandon was hired, APMA

had four shareholder/ anesthesiologists:

Dr. Kumar Ravi, Dr. Kathleen Slocum, Dr.

James Boivin, and Dr. Maurice Boivin.

(Maurice Boivin was no longer a

shareholder at the time Brandon filed his

complaint, which accounts for his absence

in the list of defendants.) After two

years on the job, Brandon was promoted to

an associate position. Along with the

promotion came a 42% pay raise and the

ability to begin the process of becoming

an APMA shareholder. Brandon also

received a substantial bonus at the end

of 1995.
  As an associate, Brandon was now

responsible (along with the shareholder-

doctors) for filling out Medicare billing

reports. He soon began to suspect that

several of the shareholders were making

alterations to reports or otherwise

falsifying reports in order to receive

Medicare reimbursement at rates higher

than the rates to which APMA was entitled

by law. Under the governing regulations,

Medicare allows for more generous

reimbursements for procedures that an

anesthesiologist “medically directs”

(because the bill includes both the

doctor’s services and the services of

various assistants), than for procedures

that the doctor “personally performs.”

There are limits, however, to the use of

the “medically directed” rate; most

importantly for present purposes, an

anesthesiologist may not oversee more

than four surgeries at a time. If she

does, then the provider may bill (at a

much lower rate) only for the services of

the assistants who are actually

performing the work.
  In May or June 1996, Brandon contacted

Medicare to obtain a copy of its

regulations. After reviewing them, he

became convinced that his colleagues’

practices were improper. Some, he

thought, were falsifying the number of

operations they were supervising, so that

they could bill at the highest “medically

directed” rate; others were altering the

billing sheets to indicate that they were

performing work, even though they had

left the hospital for the day.

Accordingly, at the shareholders’ meeting

held in early July 1996, he brought these

issues to their attention and showed them

copies of the relevant Medicare rules.

The doctors seemed upset that he had

contacted Medicare and worried about what

he had told the Medicare authorities.

Brandon assured them that he had asked

Medicare only generic questions and had

not divulged any information about APMA’s

billing procedures. He also suggested

that the shareholders should hire another

anesthesiologist, which would make it

easier for them legitimately to meet the

Medicare requirements for billing at

higher rates. The shareholders told

Brandon that they would look into the

problem. (At trial, the shareholders

argued that Brandon did not complain

about Medicare fraud until November 1996.

But since the jury found in Brandon’s

favor, we are taking his version of the

facts as true.)
  A few weeks later, on July 24, 1996, the

shareholders told Brandon that his job

performance was unsatisfactory, that they

had received complaints about him, and

that he should start looking for other

work. Brandon found this suspicious, as

no formal complaint had ever been filed

against him, he had recently been

promoted, and he had recently received a

substantial raise. He pressed the

shareholders for details about the

alleged complaints against him, but they

did not furnish any particulars. Around

the same time, Brandon began keeping a

journal documenting all of the cases in

which he thought that APMA shareholders

were improperly billing Medicare. He

periodically brought these occurrences to

the shareholders’ attention, but he took

no other action at that time.
  On October 4, 1996, Slocum told Brandon

that the shareholders had decided that he

had to leave his job by the end of the

year. Brandon protested that the

shareholders were firing him only because

of his challenges to their Medicare

claims and that he planned to “take them

to court.” Slocum answered, “We can do

what we want with you. You don’t have a

contract.”
  On October 21 and 22, Brandon again

brought his complaints to the attention

of the shareholders. His effort did

nothing but bring about a letter from the

shareholders dated October 23, 1996,

formally notifying him that he was

discharged effective at the end of the

year, but also giving him the option to

resign. On November 1, 1996, Brandon met

with the shareholders to discuss the

termination; he again accused the

shareholders of retaliating against him

for pointing out the billing fraud. With

strong, vulgar language, Slocum made it

plain that Brandon was finished, and

bluntly added, “You don’t have a signed

contract.” At this time, Brandon, for the

first time, threatened to report the

alleged fraud to the government.
  On November 4, the shareholders sent

Brandon another letter making his

termination effective immediately, but

still urging him to resign. They

suggested that if he did not resign, they

could make it very difficult for him to

find another job. Brandon refused to

resign, and so he was terminated. Ten

months after his termination, he reported

APMA’s billing practices to the U.S.

Attorney’s Office. (The record does not

reflect what use, if any, the U.S.

Attorney’s Office made of his report.)
  Brandon (a citizen of Missouri) then

filed this diversity suit against APMA

and its current shareholders (all

Illinois citizens), alleging retaliatory

discharge under Illinois law. The trial

began on October 26, 1999. Two days

later, at the close of Brandon’s

evidence, the defendants filed a motion

for judgment as a matter of law pursuant

to Federal Rule of Civil Procedure 50(a);

they renewed their motion at the close of

all the evidence. The court reserved its

ruling on the motions; it also refused

Brandon’s request for a punitive damages

instruction. On November 3, 1999, the

jury returned a verdict in favor of

Brandon, awarding him $1,034,000 for lost

earnings and $1,000,000 for pain and

suffering and emotional distress. 
  But Brandon’s victory was short-lived.

About six months after the jury verdict,

the district court entered a final

judgment granting the defendants’ motion

for judgment as a matter of law, vacating

the jury verdict, and dismissing the

complaint. This appeal followed.
II
  The jury concluded that Brandon was

fired for complaining about the

shareholders’ fraudulent billing

practices, and we are not asked to

overturn this determination. Rather, the

question for us is whether this discharge

was in retaliation for activities which

are protected by the clearly mandated

public policy of Illinois, and as such

was tortious under Illinois law.
  Illinois is an at-will employment state,

which means that in general an employee

can be discharged at any time for any

reason or none at all. Pratt v.

Caterpillar Tractor Co., 500 N.E.2d 1001,

1002 (Ill. App. Ct. 1986). Nevertheless,

there are exceptions to that rule: one

obvious one is that a forbidden

characteristic such as race cannot be the

reason for the actions of someone

counting as an “employer.” 775 Ill. Comp.

Stat. Ann. 5/2-102 (West 2001). The tort

of retaliatory discharge embodies another

exception. A discharged employee may sue

her employer for the common law tort of

retaliatory discharge if her discharge

was in retaliation for certain actions

that are protected by the public policy

of Illinois, including retaliation for

complaints about an employer’s unlawful

conduct. Pratt, 500 N.E.2d at 1002;

Hinthorn v. Ronald’s of Bloomington,

Inc., 519 N.E.2d 909, 911 (Ill. 1988).

Unlike the federal False Claims Act

(“FCA”), 18 U.S.C. sec. 287, which we

discuss below, the Illinois tort does not

require that the employee have reported

the allegedly illegal conduct to the

authorities, as long as she reported it

to the employer, Lanning v. Morris Mobile

Meals, Inc., 720 N.E.2d 1128, 1130-31

(Ill. App. Ct. 1999). The tort also does

not require the employee to have been

correct about the unlawfulness of the

conduct, as long as she had a good-faith

belief that it was unlawful. See

Stebbings v. Univ. of Chicago, 726 N.E.2d

1136, 1144 (Ill. App. Ct. 2000). 
  As noted earlier, the district court did

not overturn the jury’s determination of

the reason for Brandon’s termination:

that he was fired for complaining about

the billing practices. Instead, it found

that Brandon’s claim failed on two other

grounds: (1) he “failed to show any clear

mandate of Illinois public policy which

his discharge contravenes,” and (2) “even

if such public policy exists, other means

exist to vindicate it absent recognition

of the tort of retaliatory discharge in

this case.” These are purely legal points

that we review de novo. Doe v. Howe

Military School, 227 F.3d 981, 990 (7th

Cir. 2000).
  A.  Public Policy Against Medicare Fraud
  While the Illinois Supreme Court has

acknowledged that “[t]here is no precise

definition” of the term “clearly mandated

public policy,” Palmateer v. Int’l

Harvester Co., 421 N.E.2d 876, 878 (Ill.

1981), the court has explained that

“public policy concerns what is right and

just and what affects the citizens of the

State collectively. . . . [A] matter must

strike at the heart of a citizen’s social

rights, duties, and responsibilities

before the tort will be allowed.” Id. at

878-89.
  Illinois courts have identified two

situations in which the “clear mandate of

public policy” standard is met: (1) when

an employee is fired for asserting a

workers’ compensation claim, Kelsay v.

Motorola, Inc., 384 N.E.2d 353, 357-59

(Ill. 1978); and (2) when an employee is

fired for refusing to engage in illegal

conduct or reporting the illegal conduct

of others (“whistle blowing” or “citizen

crime fighting”). Palmateer, 421 N.E.2d

at 879. Brandon’s claim rests upon the

latter of these two.
  The defendants implicitly concede, as

they must, that Brandon believed that the

conduct about which he had complained

amounted to Medicare fraud. Medicare

fraud is covered by several federal

felony statutes, including the FCA, which

criminalizes the act of making false

claims to the federal government

(including overcharging for Medicare

reimbursements), the False Statements

Act, 18 U.S.C. sec. 1001, and the

criminal Medicare and Medicaid anti-fraud

and abuse provisions, 42 U.S.C. sec.

1320a-7 (West 2001).
  Notwithstanding the fact that Illinois

has long had a public policy that

encourages citizens to report crimes, see

Palmateer, 421 N.E.2d at 880, the

district court took the rather narrow

view that these federal criminal statutes

could not provide a basis for Illinois

public policy. It stated that Brandon had

failed to prove “the existence of any

clear mandate of Illinois public policy

in favor of preventing health care fraud

against the federal government rather

than the State of Illinois,” implying

that state public policy would not be

concerned with the defrauding of the

federal government and the violation of

federal statutes that make it a crime to

commit Medicare fraud.
  In so holding, the court erred. To begin

with, under the Supremacy Clause of the

United States Constitution, the state is

required to treat federal law on a parity

with state law, and thus it is not

entitled to relegate violations of

federal law or policy to second-class

citizenship. See Claflin v. Houseman, 93

U.S. 130, 136-37 (1876). But we need not

escalate this case to the constitutional

level, because it is plain that the

courts of Illinois have done no such

thing. To the contrary, they have

explicitly stated that it is a clearly

established policy of Illinois to prevent

its citizens from violating federal law

and that the state’s public policy

encourages employees to report suspected

violations of federal law if that law

advances the general welfare of Illinois

citizens. Russ v. Pension Consultants

Co., 538 N.E.2d 693, 697 (Ill. App. Ct.

1989) (“The [Illinois] supreme court has

held that public policy may be found in

federal law. . . . [A]n Illinois

citizen’s obedience to the law, including

federal law, is a clearly mandated public

policy of this state. . . .”); Johnson v.

World Color Press, Inc., 498 N.E.2d 575,

576 (Ill. App. Ct. 1986) (“Public policy

can be found not only in the laws and

judicial decisions of Illinois, but can

also be found in federal law. Our supreme

court . . . held that a cause of action

for retaliatory discharge could be based

upon a clearly mandated public policy

which has been declared by Congress and

which is national in scope.”) (citations

omitted).
  There are many examples of Illinois

cases in which reports about violations

of federal law have given rise to valid

claims of retaliatory discharge. See,

e.g., Wheeler v. Caterpillar Tractor Co.,

485 N.E.2d 372 (Ill. 1985) (employee was

fired after reporting violations of

Nuclear Regulatory Commission policy);

Stebbings, 726 N.E.2d at 1145-46

(employee was fired for complaining about

violations of federal radioactive

materials regulations); Sherman v. Kraft

Gen. Foods, Inc., 651 N.E.2d 708, 712

(Ill. App. Ct. 1995) (employee was fired

for reporting violations of OSHA); Howard

v. Zack Co., 637 N.E.2d 1183, 1190-91

(Ill. App. Ct. 1994) (employee was fired

for reporting violation of federal record

keeping regulations); Johnson, 498 N.E.2d

575 (employee was fired for reporting

violations of federal securities laws).

Furthermore, the Illinois legislature

itself has explicitly articulated a state

policy against all public benefits fraud:
Because of the pervasive nature of public

assistance fraud and its negative effect

on the people of the State of Illinois

and those individuals who need public

assistance, the General Assembly declares

it to be public policy that public

assistance fraud be identified and dealt

with swiftly and appropriately

considering the onerous nature of the

crime.
305 Ill. Comp. Stat. Ann. 5/8A-1 (West

2001). Although in a highly technical

sense APMA may not have committed state

public benefits fraud, its discharge of

Brandon violated the statutory policy

against public benefits fraud in general.

See Stebbings, 726 N.E.2d at 1142

(statute from which public policy can be

inferred need not necessarily apply to

the specific conduct at hand). Finally,

the Illinois Supreme Court is

particularly sensitive to the public

policy underpinnings of statutes that

affect the health and safety of citizens.

United States ex rel. Chandler v. Hektoen

Inst. for Med. Research, 35 F. Supp. 2d

1078, 1083 (N.D. Ill. 1999).
  In short, the Illinois courts are under

no illusions about the status of federal

law as a source of public policy for the

state of Illinois. The Illinois

legislature has stated that it is the

public policy of the state to identify

and end public benefits fraud; Illinois

has an undeniable interest in ensuring

that its citizens are obedient to federal

law and that its public benefits

recipients are not cheated out of proper

medical care or benefits. Taking all this

into account, we conclude that the

Illinois Supreme Court would find that

Brandon’s discharge was in violation of

the public policy of the state of

Illinois.
  B.  Alternative Means of Enforcement
  Even if Brandon has established the

elements of a retaliatory discharge

claim, the Illinois courts have hinted in

dicta that the claim may still be

rejected if an adequate alternative

remedy exists to vindicate the

retaliatory discharge or otherwise to

deter the activity that is inconsistent

with public policy. “The tort of

retaliatory discharge was not intended to

serve as a substitute means for

enforcement of particular laws.”

Stebbings, 726 N.E.2d at 1141. See also

Hamros v. Bethany Homes & Methodist

Hosp., 894 F. Supp. 1176, 1178-79 (N.D.

Ill. 1995) (no retaliatory discharge

claim for plaintiff fired for exercising

his rights under the Family and Medical

Leave Act (FMLA) since the FMLA already

prohibits retaliation and this discharge

presented a private matter between the

employer and the employee).
  Taking its lead from these cases, the

district court also supported its

decision on the ground that the FCA,

which forbids the submission of knowingly

false claims for money to the federal

government, adequately protected the

state’s policy against public benefits

fraud and provided Brandon with a

sufficient remedy for the retaliatory

discharge. The FCA permits the federal

government to impose civil sanctions

against fraudulent parties. 31 U.S.C.

sec. 3730(a). It also allows a private

individual to bring a qui tam action for

fraud, on behalf of the federal

government, and to recover an award of up

to 30% of the proceeds of the action. See

31 U.S.C. sec. 3730(b)-(d).
  But the existence of government-imposed

criminal and civil sanctions for unlawful

conduct cannot be the basis for inferring

that an employee cannot state a claim for

retaliatory discharge when the employer

fires her in retaliation for reporting

the unlawful conduct. In most “whistle-

blower” retaliatory discharge claims, the

employee is objecting to conduct by her

employer that carries criminal or civil

sanctions. See Johnson, 498 N.E.2d at 578

(employee who complains about violations

of the federal securities law is

protected from retaliation even though

the employer is subject to penalties for

such Securities Act violations). If the

district court’s view were correct, the

whole “citizen crime-fighter” species of

retaliatory discharge claim would become

extinct in Illinois. We see nothing in

the scraps of language from other courts

that would support such an important

shift in Illinois law, and the Illinois

Supreme Court itself has never taken such

a step.
  To the extent that alternative remedies

are relevant, however, we disagree with

the district court that the anti-

retaliation provision of the FCA, 31

U.S.C. sec. 3730(h) (West 2001), is

enough to bar Brandon’s claim. Section

3730(h) states that:
Any employee who is discharged, demoted,

suspended, threatened, harassed, or in

any other manner discriminated against in

terms and conditions of employment by his

or her employer because of lawful acts

done by the employee on behalf of the

employee or others in furtherance of an

action under this section, including

investigation for, initiation of,

testimony for, or assistance in an action

filed or to be filed under this section,

shall be entitled to all relief necessary

to make the employee whole.
(Emphasis added). That relief includes

reinstatement, double back pay with

interest, “and compensation for any

special damages sustained as a result of

the discrimination, including litigation

costs and reasonable attorneys’ fees.” 31

U.S.C. sec. 3730(h). The final phrase

permits recovery for emotional distress.

Neal v. Honeywell, Inc., 191 F.3d 827,

832 (7th Cir. 1999).
  For Brandon to bring an action against

APMA based on his discharge under sec.

3730(h), he would have to show that (1)

his actions were taken “in furtherance of”

an FCA enforcement action and were

therefore protected by the statute; (2)

that the employer had knowledge that he

was engaged in this protected conduct;

and (3) that the discharge was motivated,

at least in part, by the protected

conduct. See United States ex rel.

Yesudian v. Howard Univ., 153 F.3d 731,

736 (D.C. Cir. 1998). The tort of

retaliatory discharge, as we have already

noted, does not require the employee to

have reported the allegedly illegal

conduct to the authorities. Lanning, 720

N.E.2d at 1131. People in Brandon’s

position, who choose to raise their

concerns privately within their firm or

company, rather than publicly, simply do

not qualify for the FCA claim. 
  This conclusion disposes of the question

whether there was an alternative path

available to Brandon, unless his

complaints could somehow be seen as

something “in furtherance of” a yet-to-

be-filed FCA enforcement action or

Illinois would regard the FCA as

“equivalent” even though it addresses a

smaller set of cases than the state tort.

The FCA covers “investigation for,

initiation of, testimony for or

assistance in an [enforcement] action

filed or to be filed.” 31 U.S.C. sec.

3730(h). In Neal v. Honeywell, 33 F.3d

860 (7th Cir. 1994) (Honeywell I), this

court defined an “action” under sec.

3730(h) to include situations in which a

qui tam action is a “distinct

possibility,” or “litigation could be

filed legitimately–that is, consistently

with Fed. R. Civ. P. 11.” Id. at 864. We

did not, however, define “in furtherance

of” or otherwise describe the actions the

employee must have taken in relation to

the possibility of litigation. In Neal

itself, the plaintiff had provided enough

information to the government to trigger

an investigation and that the employer

was on notice of the investigation. Id.

Luckey v. Baxter Healthcare Corp., 183

F.3d 730 (7th Cir. 1999), shed little

light on this issue, stating simply that

“[o]nly investigation, testimony, and

litigation are protected.” Id. at 733.

Luckey also established that a

retaliatory complaint had to be dismissed

if the employer did not know about the

whistle-blower’s report before it

discharged him. 
  What exactly had Brandon done that could

have been seen as protected conduct or a

“precursor to [FCA] litigation?” He had

notified the shareholders that he

wasconcerned about their billing

practices. He had contacted Medicare for

information about Medicare billing rules.

But were any of these actions “in

furtherance of” a qui tam action? Did any

of these actions put APMA on notice of

the “distinct possibility” of a qui tam

action? Under the circumstances here, we

cannot find that APMA would have realized

that it faced the “distinct possibility”

of such an action. It is true that

Brandon used terms like “illegal,”

“improper,” and “fraudulent” when he

confronted the shareholders about the

billing practices. On the other hand,

Brandon had never explicitly told the

shareholders that he believed they were

violating the FCA and had never

threatened to bring a qui tam action. He

never threatened to report their conduct

to the government until after he was

discharged. Compare Eberhardt v.

Integrated Design & Constr., Inc., 167

F.3d 861, 867 (4th Cir. 1999). Brandon

was simply trying to convince the

shareholders to comply with the Medicare

billing regulations. Such conduct is usu

ally not protected by the FCA, see

Yesudian, 153 F.3d at 740; Zahodnick v.

Int’l Bus. Machs. Corp., 135 F.3d 911,

914 (4th Cir. 1997); United States ex

rel. Hopper v. Anton, 91 F.3d 1261, 1269

(9th Cir. 1996). Additionally, such

conduct usually does not put an employer

on notice of potential FCA litigation.

See United States ex rel. Ramseyer v.

Century Healthcare Corp., 90 F.3d 1514,

1523 (10th Cir. 1996) (Plaintiff’s

conduct in advising her superiors of non-

compliance with Medicaid program

requirements did not suggest to employer

that she intended to bring an FCA

action.).
  It is more accurate to say that

Brandon’s investigation of the billing

reports was part of the general course of

his responsibilities. At trial, Ravi

testified that one of Brandon’s job

duties was to ensure that the billing

practices complied with Medicare rules

and regulations. Thus, the fact that

Brandon was alerting his supervisors to

the possibility of their non-compliance

with the rules would not necessarily put

them on notice that he was planning to

take a far more aggressive step and bring

a qui tam action against them or report

their conduct to the government. See

Eberhardt, 167 F.3d at 868 (“[I]f an

employee is assigned the task of

investigating fraud within the company,

courts have held that the employee must

make it clear that the employee’s actions

go beyond the assigned task” in order to

allege retaliatory discharge under the

FCA.); Ramseyer, 90 F.3d at 1523 n.7

(Persons whose jobs entail the

investigation of fraud “must make clear

their intentions of bringing or assisting

in an FCA action in order to overcome the

presumption that they are merely acting

in accordance with their employment

obligations.”).
  Looking at all of the facts, it is

unclear at best that Brandon engaged in

activity that might have supported a suit

under the FCA anti-retaliation provision.

In this kind of situation, the Illinois

Supreme Court has held that the employee

remains free to pursue a remedy under the

common law tort of retaliatory discharge.

See Wheeler, 485 N.E.2d at 376-77.

Following Wheeler and respecting the

difference between the Illinois tort and

the FCA claim, we conclude that allowing

a state remedy in conjunction with

thepotentially available federal remedy

does “no violence to the interests

protected by the Federal statute.”

Fragassi v. Neiburger, 646 N.E.2d 315,

318 (Ill. App. Ct. 1995). There is

nothing in sec. 3730(h) to lead us to

believe that Congress intended to preempt

all state law retaliatory discharge

claims based on allegations of fraud on

the government.
  Finally, even if there is some kind of

federal remedy available under sec.

3730(h) (though not the kind of remedy

Brandon wanted), it appears that the

Illinois Supreme Court looks at this fact

as one of many factors in a pragmatic

approach toward determining when the tort

of retaliatory discharge will lie. See

Fellhauer v. Geneva, 568 N.E.2d 870, 876

(Ill. 1991). Compare Schweiker v.

Chilicky, 487 U.S. 412, 424 (1988)

(denying a Bivens-type remedy to

claimants who were improperly denied

disability benefits even though “Congress

failed to provide for complete relief”);

Bush v. Lucas, 462 U.S. 367, 388 (1983)

(refusing to provide a Bivens remedy

after acknowledging the congressional

remedy would not provide relief for the

plaintiff’s First Amendment injury). The

state thus seems to take a more exacting

approach to the availability of an

alternative remedy than the Supreme Court

has done for implied Bivens actions under

the federal constitution. As the final

authority on the common law of the state,

it is of course entitled to do so.
III
  Brandon also challenges the district

court’s refusal to instruct the jury on

punitive damages. As a federal court

sitting in diversity, we look to the law

of Illinois to determine the

appropriateness of punitive damages.

Europlast, Ltd. v. Oak Switch Sys., Inc.,

10 F.3d 1266, 1276 (7th Cir. 1993). Under

Illinois law, “[w]hile the measurement of

punitive damages is a jury question, the

preliminary question of whether the facts

of a particular case justify the

imposition of punitive damages is

properly one of law,” Kelsay, 384 N.E.2d

at 359, and our review is therefore de

novo. Europlast, 10 F.3d at 1276.
  In general, the Illinois Supreme Court

does not favor punitive damages.

Nevertheless, they may be awarded where

“torts are committed with fraud, actual

malice, deliberate violence or

oppression, or when the defendant acts

willfully, or with such gross negligence

as to indicate a wanton disregard of the

rights of others.” Kelsay, 384 N.E.2d at

359. See also Cornell v. Langland, 440

N.E.2d 985, 987 (Ill. App. Ct. 1982)

(punitive damages are appropriate where

conduct is “intentional, deliberate and

outrageous”). Punitive damages are an

important part of a retaliatory discharge

action:
In the absence of the deterrent effect of

punitive damages there would be little to

dissuade an employer from engaging in the

practice of discharging an employee for

filing a workmen’s compensation claim. .

. . The imposition on the employer of the

small additional obligation to pay a

wrongfully discharged employee

compensation would do little to

discourage the practice of retaliatory

discharge, which mocks the public policy

of this State.
Kelsay, 384 N.E.2d at 359; see also

Midgett v. Sackett-Chicago, Inc., 473

N.E.2d 1280, 1283-84 (Ill. 1984). 
  It is certainly important to recall, as

APMA notes, that punitive damages are not

appropriate in all retaliatory discharge

cases. See Dixon Distrib. Co. v. Hanover

Ins. Co., 641 N.E.2d 395, 400 (Ill. 1994)

(actual malice is not necessarily

established in every retaliatory

discharge case). Only where the evidence

offered by the plaintiff, if believed,

would support a finding of malice, should

a jury be given instructions on punitive

damages. See Cirrincione v. Johnson, 703

N.E.2d 67, 70-71 (Ill. 1998). 
  According to Brandon’s version of the

events, when he told APMA’s shareholders

that they could not terminate him in

response to his complaints, they

dismissed him as “fucked” because he did

not have a written contract and they told

him, “We can do what we want with you.”

They fabricated complaints and made false

evaluations of his job performance. They

also took steps to prevent him from

filing suit, threatening to make it

difficult for him to find another job.

Rather than responding appropriately to

Brandon’s complaints, the shareholders

began a series of verbal and written

communications in which they threatened

to discharge him if he did not stop

complaining about their billing

procedures. These kinds of threats,

harassment, and coercive tactics show a

wilful and wanton disregard for Brandon’s

rights to investigate and report illegal

conduct and therefore could support a

jury award of punitive damages. See Cox

v. Doctor’s Assocs., Inc., 613 N.E.2d

1306, 1328 (Ill. App. Ct. 1993).
IV
  Even though the tort of retaliatory

discharge is a narrow exception to

Illinois’s doctrine of at-will

employment, in appropriate cases it

protects important public policies.

“There is no public policy more important

or more fundamental than the one favoring

the effective protection of the lives and

property of citizens,” Palmateer, 421

N.E.2d at 879, and APMA’s discharge of

Brandon for complaining about Medicare

fraud violated this policy. Accordingly,

we Reverse the district court’s grant of

judgment as a matter of law in favor of

the defendant and we Remand for

Reinstatement of the jury verdict in this

case. We Remand for a jury trial on

punitive damages.