2014 IL 116844

IN THE

SUPREME COURT

OF

THE STATE OF ILLINOIS

(Docket No. 116844)

THE STATE OF ILLINOIS ex rel. JOSEPH PUSATERI, Appellee, v. THE 

PEOPLES GAS LIGHT AND COKE COMPANY, Appellant.

Opinion filed November 20, 2014.

CHIEF JUSTICE GARMAN delivered the judgment of the court, with opinion.

Justices Freeman, Thomas, Kilbride, Karmeier, Burke, and Theis concurred in the 

judgment and opinion.

OPINION

¶ 1 Plaintiff Joseph Pusateri filed a complaint under the False Claims Act1 alleging 

defendant Peoples Gas Light and Coke Company (PG) used falsified gas leak response 

records to justify a fraudulently inflated natural gas rate before the Illinois Commerce 

Commission (Commission). As a customer, the State of Illinois would have paid such 

fraudulently inflated rates, making PG liable under the False Claims Act. The Cook 

County circuit court dismissed Pusateri’s complaint with prejudice, finding that as a 

matter of law, there was no causal connection between the allegedly false reports and 

 1

At the time Pusateri filed his suit, the Illinois False Claims Act was known as the Whistleblower 

Reward and Protection Act. 740 ILCS 175/1 (West 2008). The textual amendments that accompanied 

the 2010 name change do not affect our analysis of this case. Pub. Act 96-1304 (eff. July 27, 2010) 

(amending 740 ILCS 175/1 et seq. (West 2008)). The parties have referred to the Whistleblower Reward 

and Protection Act as the Whistleblower Act, but that is the proper name of another statute. 740 ILCS 

174/1 (West 2008). To avoid confusion, we use the statute’s current name, the Illinois False Claims Act. 

740 ILCS 175/1 (West 2012).
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the Commission-approved rates. The appellate court reversed, construing the 

complaint’s allegations liberally to find PG could have submitted the safety reports in 

support of a request for a rate increase, despite not being required to do so under the 

Administrative Code. Accordingly, the appellate court found Pusateri had presented 

enough of a viable claim to survive dismissal. 2013 IL App (1st) 120972-U.

¶ 2 This court granted PG’s petition for leave to appeal. Ill. S. Ct. R. 315 (eff. July 1, 

2013). We also permitted the Commonwealth Edison Company, the Ameren Illinois 

Company, and the Northern Illinois Gas Company to file briefs amici curiae on behalf 

of defendant PG. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010). For the reasons that follow, we 

reverse the judgment of the appellate court and affirm the judgment of the circuit court.

¶ 3 BACKGROUND

¶ 4 Pusateri is a former PG employee who filed a sealed complaint against the 

company under the False Claims Act on September 2, 2009. 740 ILCS 175/1 et seq.

(West 2008). In his complaint, Pusateri alleged PG must file a report with the 

Commission any time its response to a possible gas leak, from receipt of the call to 

arrival of the maintenance crew, takes more than one hour. In late 2001, Pusateri rose to 

the level of service supervisor. Pusateri alleged that his superiors then instructed him to 

change computer logs to reflect a better response time, so that no Commission report 

would be filed, and that he and other managers would alter such records. Pusateri 

further alleged that these falsified reports were used by PG to help justify rate increases 

in Commission rate-setting proceedings. Pusateri’s complaint contained two counts, 

premised on separate subsections of the False Claims Act. The first count argued the 

allegedly false safety records were themselves a “false or fraudulent claim for payment 

or approval” under section 3(a)(1) of the False Claims Act; the second count argued the 

allegedly false safety records were “false record[s] or statement[s] to get a false or 

fraudulent claim paid or approved” under section 3(a)(2). 740 ILCS 175/3(a)(1)-(2) 

(West 2008). No particular rate increase or order was specified in the complaint. The 

State, as a purchaser of natural gas, would have paid any such inflated rate. 

¶ 5 The Attorney General declined to proceed with the action. See 740 ILCS 175/4 

(West 2008). On April 27, 2011, the circuit court ordered Pusateri to conduct the action 

on behalf of the State as plaintiff. The court ordered the complaint unsealed and served 

on PG. On February 29, 2012, the circuit court dismissed Pusateri’s complaint with 

prejudice, pursuant to section 2-615 of the Code of Civil Procedure. 735 ILCS 5/2-615 
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(West 2008). The circuit court looked to the definition of a claim for payment under the 

False Claims Act, which included “any request or demand, whether under a contract or 

otherwise, for money or property” made to the State or someone to be reimbursed by 

the State. 740 ILCS 175/3(c) (West 2008). Noting the requirement of a causal nexus 

between the false claim and payments by the State, the circuit court examined the 

Illinois Administrative Code to conclude the Commission would never look at safety 

reports in deciding a rate. See 83 Ill. Adm. Code §§ 285.305, 285.315 (2011). 

Therefore, there could be no causal connection between a false safety report and a 

Commission rate approval. 

¶ 6 The appellate court reversed. It held that although PG was not required to use its 

natural gas leak reports in support of a rate increase, it may have done so. 2013 IL App 

(1st) 120972-U, ¶ 21. Construing the complaint liberally, the appellate court found the 

alleged false reports could form the basis of a claim under section 3(a)(2), submitting a 

false record in support of a claim for payment. Id. ¶ 22. It also held that Pusateri’s 

complaint alleged PG had submitted fraudulent bills to the State, making the basis of a 

claim under section 3(a)(1) for a false or fraudulent claim. Id. ¶ 28. One justice 

dissented, on the basis that the Commission’s legislative rate making is a regulatory 

act, whereas the False Claims Act is concerned with procurement and the government’s 

bills. Id. ¶¶ 42-46 (Palmer, J., dissenting). 

¶ 7 ANALYSIS

¶ 8 A section 2-615 motion to dismiss challenges the legal sufficiency of a complaint. 

Kanerva v. Weems, 2014 IL 115811, ¶ 33. A court deciding a section 2-615 motion 

must accept all well-pleaded facts in the complaint as true, and it should dismiss the 

complaint only where it is apparent no set of facts could be proven that would entitle 

the plaintiff to recover. Id. We review de novo an order granting a motion to dismiss 

under section 2-615. Id. Whether Pusateri’s complaint is a proper one under the False 

Claims Act is a question of statutory interpretation. The primary objective of statutory 

interpretation is to give effect to the legislature’s intent, which is best indicated by the 

plain language of the statute itself. Citizens Opposing Pollution v. ExxonMobil Coal 

U.S.A., 2012 IL 111286, ¶ 23. The court may affirm on any basis appearing in the 

record. In re Veronica C., 239 Ill. 2d 134, 151 (2010). 

¶ 9 Before this court, PG reiterates its prior arguments that Pusateri has not stated a 

claim within the meaning of the False Claims Act, or within the analogous federal False 
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Claims Act. 31 U.S.C. § 3729 et seq. PG argues first that any false reports to the 

Commission would not be a claim for payment, and any falsity therein would be mere 

false statements unconnected to any claim for payment. PG argues second that there is 

no causal nexus between the allegedly false reports and the State’s gas bills—both 

because changing the logs would mean no report was generated at all, and because the 

Commission would not rely upon gas leak reports in setting rates anyway. Pusateri 

responds that a false record in support of a claim for payment is sufficient, even where 

the State is only a partial payor of the claim, relying largely on People ex rel. 

Levenstein v. Salafsky, 338 Ill. App. 3d 936 (2003). Pusateri thus argues the gas leak 

reports were sufficiently causally linked to the State’s payment of gas bills. Pusateri 

also argues that the Commission has considered gas leak reports in the past, relying 

chiefly on People ex rel. Madigan v. Illinois Commerce Comm’n, 2011 IL App (1st) 

100654. Pusateri argues that the Commission’s consideration of prospective safety 

improvements in light of a proposed infrastructure cost recovery rider in Madigan

indicates the Commission will consider gas leak reports in setting rates, irrespective of 

the reports’ absence in that portion of the Illinois Administrative Code.

¶ 10 PG additionally argues that Pusateri’s complaint is a prohibited collateral attack on 

a Commission rate order. See, e.g., Peoples Gas Light & Coke Co. v. Buckles, 24 Ill. 2d 

520, 528 (1962). Pusateri counters that PG has forfeited this argument by not raising it 

in the circuit or appellate courts. Pusateri additionally argues that his complaint does 

not seek to “adjust or countermand any rate making decisions of” the Commission, 

because he is asking the court only to review PG’s conduct and order disgorgement. 

Pusateri also contends that arguments against applying the False Claims Act to PG’s

safety reports to the Commission are a constitutional attack on the False Claims Act. In 

reply, PG notes that no party has argued the False Claims Act is unconstitutional, 

facially or as applied to the Commission.

¶ 11 Jurisdiction of the Illinois Commerce Commission

¶ 12 The Public Utilities Act creates the Illinois Commerce Commission and charges it 

with “general supervision of all public utilities.” 220 ILCS 5/2-101, 4-101 (West 

2008). “The Commission is the administrative agency responsible for setting the rates 

utilities charge their customers.” United Cities Gas Co. v. Illinois Commerce Comm’n, 

163 Ill. 2d 1, 11 (1994). The Commission has “exclusive jurisdiction over rates” under 

the Public Utilities Act. Sheffler v. Commonwealth Edison Co., 2011 IL 110166, ¶ 41 
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(citing 220 ILCS 5/9-252 (West 2006)). The Commission establishes rates based on its 

finding such rates are “just and reasonable.” 220 ILCS 5/9-201(c) (West 2008). In a 

rate-setting process before the Commission, the regulated utility bears the burden of 

proving the “justness and reasonableness of the proposed rates.” Id. The Public 

Utilities Act also prohibits a utility from charging a rate other than one approved by the 

Commission, or from offering a refund. 220 ILCS 5/9-240 (West 2008) (providing that, 

“[e]xcept as in this Act otherwise provided, no public utility shall charge *** a greater 

or less or different compensation for any product *** than the rates or other charges 

applicable to such product *** as specified in its schedules on file and in effect at the 

time, *** nor shall any such public utility refund or remit, directly or indirectly, in any 

manner or by any device, any portion of the rates or other charges so specified”). The 

Commission may not make rates retroactively or for single issues (Business & 

Professional People for the Public Interest v. Illinois Commerce Comm’n, 146 Ill. 2d 

175, 195 (1991)), but the Commission may order a refund where it concludes a utility 

has charged an excessive or unjustly discriminatory rate. 220 ILCS 5/9-252 (West 

2008).

¶ 13 The circuit and appellate courts have jurisdiction to review administrative agency 

actions only as provided by statute. Ill. Const. 1970, art. VI, §§ 6, 9. The Public 

Utilities Act provides for appeal of a Commission order directly to the appellate court, 

under standards deferential to the Commission’s expertise. See 220 ILCS 5/10-201(e) 

(West 2008). 

“An order of the Commission will be reversed only if it is outside the 

jurisdiction of the Commission or is not supported by substantial evidence, or if 

the proceedings or manner in which the order was arrived at violated the State 

or Federal Constitutions or relevant laws, to the prejudice of the appellant. *** 

Apart from examining whether the Commission acted outside the scope of its 

constitutional or statutory authority, a reviewing court is limited to determining 

whether the findings of the Commission are against the manifest weight of the 

evidence.” United Cities Gas Co., 163 Ill. 2d at 12. 

¶ 14 Rate-setting is a legislative function, not a judicial one. Business & Professional 

People, 146 Ill. 2d at 196. “In the rate-making scheme, the Commission and not the 

court is the fact-finding body.” Id. “On appeal from an order of the Commission, its 

findings of fact are to be considered prima facie true; its orders are considered prima 

facie reasonable; and the burden of proof on all issues raised in an appeal is on the 

appellant.” United Cities Gas Co., 163 Ill. 2d at 11. 
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¶ 15 When the court reverses a Commission rate order, it does not set a new rate. See,

e.g., Business & Professional People for the Public Interest v. Illinois Commerce 

Comm’n, 136 Ill. 2d 192, 242 (1989). Ordinarily, where a Commission order approving 

a rate increase is reversed, and the rate increase has not been stayed pending litigation, 

ratepayers are not entitled to any refund for excess charges collected between the rate’s 

effective date and reversal. Id. This court has previously ordered a utility to refund 

excess money collected after we had reversed the applicable rate order, but only as “a 

result of a direct, statutorily authorized, review of the Commission order.” Independent 

Voters of Illinois v. Illinois Commerce Comm’n, 117 Ill. 2d 90, 105 (1987). Such 

refunds were available for charges collected only after the court held “that a 

Commission-approved rate order included allowance of improper expenses and 

deductions for the utility company.” Id. In Independent Voters, the court declined to 

order disgorgement where the amounts collected under the Commission-approved rate 

were not unlawfully obtained. As noted above, the court considered the question only 

upon “direct, statutorily authorized” review. Id. The Commission’s orders within its 

statutory authority are “not subject to collateral attack.” Peoples Gas Light & Coke Co. 

v. Buckles, 24 Ill. 2d 520, 528 (1962). 

¶ 16 The legislature adopted the False Claims Act in 1991, long after the establishment 

of the Commission’s exclusive rate-setting jurisdiction. See Pub. Act 87-662 (eff. Jan. 

1, 1992). The False Claims Act allows the Attorney General or a private individual to 

bring a “civil action” on behalf of the State for false claims. See 740 ILCS 175/4 (West 

2008). The False Claims Act enumerates certain individuals and circumstances to 

which it does not apply. 740 ILCS 175/4(e)(1)-(2) (West 2008) (stating “No court shall 

have jurisdiction over an action” between members of the Guard arising from service in 

the Guard, or over an action by an individual against a member of the legislature, 

judiciary, or other exempt official if based on information known to the State at the 

time the action was brought). No part of the False Claims Act enlarges the subject 

matter jurisdiction of the circuit courts. Nothing in the False Claims Act indicates an 

intent to abridge or disturb the Commission’s exclusive jurisdiction.

¶ 17 Reparations as Distinguished From Civil Damages

¶ 18 This court has recently examined which causes of action against a regulated utility 

are subject to the exclusive jurisdiction of the Commission. Claims for reparations are 

subject to the exclusive jurisdiction of the Commission. Sheffler, 2011 IL 110166, ¶ 41 
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(“It has long been recognized that the ‘evident intent and purpose of the legislature in 

providing a method by which reparation may be recovered and in requiring that an 

application therefor shall be first made to the commission, precludes an action at law 

for such reparation until the commission has heard a claim therefor.’ ” (quoting

Terminal R.R. Ass’n of St. Louis v. Public Utilities Comm’n, 304 Ill. 312, 317 (1922))). 

In Sheffler, we noted “a claim is for reparations when the essence of the claim is that a 

utility has charged too much for a service, while a claim is for civil damages when the 

essence of the complaint is that the utility has done something else to wrong the 

plaintiff.” Id. ¶ 42 (citing Flournoy v. Ameritech, 351 Ill. App. 3d 583, 585 (2004)). 

¶ 19 At its heart, Pusateri’s complaint alleges PG used fraudulent means to get the State 

(and others) to pay too much for natural gas. While the False Claims Act could subject 

PG to civil penalties of $5,500 to $11,000, PG would also be subject to paying treble 

damages for its actions. 740 ILCS 175/3(a) (West 2008). Pusateri, as plaintiff, could 

share in 25% to 30% of the civil penalty and damages awarded. 740 ILCS 175/4(d)(2) 

(West 2008). Though the remedy Pusateri seeks is a mix of penalty and damages, the 

sole reason the alleged falsehoods might be actionable under the False Claims Act is 

that they would have induced the State to pay too much for PG’s natural gas. See 740 

ILCS 175/3(a)(1)-(7) (West 2008) (establishing liability for false claims, actions in 

support of false claims, and other actions used to deprive the State of property to which 

it is entitled). Pusateri’s complaint is one for reparations, and it is subject to the 

exclusive, original jurisdiction of the Commission. 

¶ 20 Pusateri’s complaint in the circuit court also constitutes a prohibited collateral 

attack on a Commission rate order. It is not possible to determine how much PG’s 

alleged safety-related fraud increased its rate without determining what its rate should 

have been without any false reports. At oral argument, Pusateri suggested this 

difficulty could be resolved through the testimony of expert witnesses, who could 

opine on how much PG’s rate might have been inflated by fraudulent reports. The use 

of expert witnesses would not resolve the defect in this procedure—the circuit court 

would simply be asking experts to exercise the judgment statutorily reserved to the 

Commission. The court would then exercise the rate-setting authority reserved to the 

Commission, then order a refund outside of “direct, statutorily-authorized, review of 

the Commission order.” Independent Voters, 117 Ill. 2d at 105. The circuit court is 

without jurisdiction to offer such remedies.
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¶ 21 Forfeiture

¶ 22 Pusateri has argued that PG forfeited the issue of a collateral attack on a 

Commission rate order, by not raising it below. Issues not raised below may be 

forfeited, meaning they are not properly before the court exercising appellate review. 

See, e.g., City of Champaign v. Torres, 214 Ill. 2d 234, 240 n.1 (2005). Forfeiture does 

not apply to questions of subject matter jurisdiction, however. People ex rel. Madigan 

v. Illinois Commerce Comm’n, 231 Ill. 2d 370, 387 (2008) (describing forfeiture 

argument as “ultimately irrelevant, as the issue in this case is one of jurisdiction, which 

any reviewing court has an obligation to consider” (citing Franson v. Micelli, 172 Ill. 

2d 352, 355 (1996))). The prohibition against collateral attacks on Commission rate 

orders concerns the court’s ability to adjudicate the controversy and to offer relief. 

People v. Hughes, 2012 IL 112817, ¶ 20 (“A court’s subject matter jurisdiction relates 

to ‘the power of a court to hear and determine cases of the general class to which the 

proceeding in question belongs.’ ” (quoting Belleville Toyota, Inc. v. Toyota Motor 

Sales, U.S.A., Inc., 199 Ill. 2d 325, 334 (2002))). Outside the administrative review 

prescribed by section 10-201, the circuit court lacked subject matter jurisdiction to 

adjudicate the central question of Pusateri’s complaint: whether the rate set by the 

Commission was too high by virtue of the allegedly false gas leak reports. The circuit 

court was further unable to offer the relief sought: reparations, as augmented by the 

civil penalty provisions of the False Claims Act.

¶ 23 The legislature enacted the False Claims Act well after this court’s rulings on the 

exclusive jurisdiction of the Commission. No part of the False Claims Act indicates the 

legislature intended to abridge that exclusive jurisdiction. This conclusion should not 

be mistaken for a conclusion that the legislature constitutionally cannot craft a remedy 

or whistleblower reward within the context of utility rates, as Pusateri suggested at oral 

argument. The legislature simply has not done so. This result emanates from analysis of 

the statutes, not our Constitution.

¶ 24 Whistleblower Protections and the Commission’s Enforcement Role

¶ 25 At oral argument, Pusateri contended his complaint should proceed in the circuit 

court, lest he be subject to retaliation if not proceeding under “the Whistleblower Act.” 

The False Claims Act provides relief for employees who suffer retaliation for bringing 

a False Claims Act action, including reinstatement with double back pay. 740 ILCS 

175/4 (West 2008). However, the argument that Pusateri would be unprotected without 
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the False Claims Act is unpersuasive for a number of reasons. First, we note that 

Pusateri was already a former employee at the time he filed his complaint. Second, the 

absence of False Claims Act protections would have no impact on the application of the 

Whistleblower Act (740 ILCS 174/1 et seq. (West 2008)). The plain language of the 

Whistleblower Act would prohibit retaliation for making a good faith complaint to the 

Commission that a utility is violating the law. 740 ILCS 174/15 (West 2008) 

(prohibiting retaliation “against an employee for disclosing information to a 

government or law enforcement agency, where the employee has reasonable cause to 

believe that the information discloses a violation of a State or federal law, rule, or 

regulation”). An employee who is the victim of retaliation for such a disclosure would 

be entitled to “all relief necessary to make the employee whole,” including 

reinstatement with back pay and compensation for litigation expenses. 740 ILCS 

174/30 (West 2008). This relief for retaliation under the Whistleblower Act is less 

plentiful than that offered under the False Claims Act, and the Whistleblower Act does 

not offer a whistleblower the opportunity to share in any recovery by the State, but the 

Whistleblower Act nonetheless prohibits retaliation. Compare 740 ILCS 175/4 (West 

2008), and 740 ILCS 174/30 (West 2008); see 740 ILCS 175/4(d)(2) (West 2008). 

¶ 26 Finding that the legislature did not intend the False Claims Act to apply to a 

Commission-set rate likewise does not create an enforcement gap. The legislature has 

granted the Commission an array of enforcement duties and powers. The Commission 

has the authority to pursue penalties, ranging from $1,000 to $500,000, for each 

misrepresentation to the Commission. 220 ILCS 5/5-202.1 (West 2008). The 

Commission has the duty to ensure regulated utilities obey the Public Utilities Act and 

other statutes, except where enforcement duties are “specifically vested in some other 

officer or tribunal.” 220 ILCS 5/4-201 (West 2008). The Public Utilities Act directs the 

Commission to seek an injunction in the circuit court to prevent continued violation of 

the law. 220 ILCS 5/4-202 (West 2008). The Commission also has a procedure for 

receiving complaints from an individual or a wide range of entities; it may also initiate 

a complaint sua sponte. 220 ILCS 5/10-108 (West 2008). The Commission is to hear 

and enter orders on complaints within one year, in the absence of an agreed upon 

extension of time. Id. Where the Commission has failed to do so, a complainant may 

seek an order of mandamus only to compel the Commission to issue an order, further 

demonstrating the legislature’s deference to Commission expertise. Id. Finally, the 

Commission may order a refund where it concludes a utility has charged an excessive 

or unjustly discriminatory rate. 220 ILCS 5/9-252 (West 2008).
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¶ 27 As noted above, the legislature enacted the False Claims Act long after this court’s 

relevant findings about the exclusive jurisdiction of the Commission, and we find no 

indication the legislature intended to abridge that jurisdiction. This conclusion is 

bolstered by the existence of a robust regulatory scheme already existing within the 

Public Utilities Act. Pusateri’s interpretation of the False Claims Act would invite the 

circuit court to review a Commission rate order collaterally, in the absence of any 

specific grant of jurisdiction and less deferentially than the manner prescribed under 

the Public Utilities Act. The complaint cannot proceed in the circuit court, and 

dismissal was proper. Accordingly, we need not address the parties’ arguments on 

whether the gas leak reports properly resemble a claim or a false record in support of a 

claim under the False Claims Act.

¶ 28 CONCLUSION

¶ 29 Because the circuit court was without jurisdiction to offer the relief sought by 

Pusateri’s complaint, dismissal was appropriate. The judgment of the appellate court is 

reversed. The judgment of the circuit court is affirmed.

¶ 30 Appellate court judgment reversed.

¶ 31 Circuit court judgment affirmed.