Ken Paxton, Attorney General of the State of Texas v. Texas Department of State Health Services

Opinion

ACCEPTED 03-14-00594-CV 4070256 THIRD COURT OF APPEALS AUSTIN, TEXAS 2/9/2015 11:27:38 AM JEFFREY D. KYLE CLERK 03-14-00594-CV

In the Court of Appeals for the Third District3rdofCOURT Texas FILED IN OF APPEALS Austin, Texas AUSTIN, TEXAS 2/9/2015 11:27:38 AM ____________________________________JEFFREY D. KYLE Clerk GREG ABBOTT, ATTORNEY GENERAL OF TEXAS, Appellant V.

TEXAS DEPARTMENT OF STATE HEALTH SERVICES, Appellee ____________________________________

On Appeal from the 353rd Judicial District Court of Travis County, Texas, Cause No. D-1-GN-12-002322 ____________________________________

APPELLEE’S BRIEF ____________________________________

KEN PAXTON ANN HARTLEY Attorney General Attorney in Charge State Bar No. 09157700 CHARLES E. ROY First Assistant Attorney General LAURA A. BARBOUR Assistant Attorney General JAMES E. DAVIS State Bar No. 24069336 Deputy Attorney General for Civil Litigation Office of the Attorney General Financial Litigation, Tax, and ROBERT O’KEEFE Charitable Trusts Division Division Chief, PO Box 12548, MC 017-6 Financial Litigation, Tax, and Austin, Texas 78711-2548 Charitable Trusts Division Tel: (512) 936-1313 Fax: (512) 477-2348 ann.hartley@texasattorneygeneral.gov COUNSEL FOR APPELLEE TABLE OF CONTENTS

TABLE OF AUTHORITIES .........................................................................iii

STATEMENT OF THE CASE ..................................................................... v

ISSUE PRESENTED FOR REVIEW ........................................................... v

INTRODUCTION ........................................................................................ 1

STATEMENT OF FACTS ........................................................................... 2 Procedural Background ........................................................................... 2 The Statute at Issue................................................................................. 4 The Dispute ............................................................................................. 4

SUMMARY OF THE ARGUMENT .............................................................. 5

ARGUMENT ............................................................................................... 6

STANDARD OF REVIEW ........................................................................ 6 I. The Plain Meaning of Section 531.1021(g) Supports DSHS’s Interpretation ..................................................................................... 7

II. DSHS’s Interpretation Comports With OIG’s Purpose and Function ............................................................................................. 9

III. DSHS’s Interpretation Comports with the PIA. ................................. 14

IV. The Legislature is Presumed Aware of Previous Letter Rulings ....... 15

PRAYER ................................................................................................... 26

CERTIFICATE OF COMPLIANCE ............................................................ 27

CERTIFICATE OF SERVICE: ................................................................... 28

APPENDIX ............................................................................................... 29

-ii- TABLE OF AUTHORITIES

Cases

City of Dallas v. Abbott 304 S.W.3d 380 (Tex. 2010) ............................................................ 16, 17

City of Fort Worth v. Abbott 258 S.W.3d 320 (Tex. App.–Austin 2008, no pet.) ................................. 25

City of Garland v. Dallas Morning News 22 S.W.3d 351 (Tex. 2000) ...................................................................... 7

FKM P’ship Ltd. v. Bd. of Regents of Univ. of Houston 255 S.W.3d 619 (Tex. 2009) .................................................................... 8

Houston Chronicle Publishing Co. V. City of Houston 531 S.W. 2d 177, 185 (Tex. Civ. App.–Houston [14th Dist.] 1975, writ ref’d per curiam) .................................................................... 25

Houston Chronicle Publishing Co. v. City of Houston 536 S.W.2d 559 (Tex. 1976) .................................................................. 25

McBride v. Clayton 166 S.W.2d 125 (Tex. 1942) .................................................................. 17

Tex. State Bd. of Chiropractic Exam’rs v. Abbott 391 S.W.3d 343 (Tex. App.–Austin 2013, no pet.) ................................... 7

Tex. Worker’s Comp. Comm’n v. Patient Advocates 136 S.W.3d 643 (Tex. 2004) .................................................................... 7

Traveler’s Insurance Co. v Joachim 315 S.W.3d 860 (Tex. 2010) .................................................................... 7

Statutes

Tex. Gov’t Code § 311.021 ....................................................................... 22 Tex. Gov't Code ch. 531, subch. C ........................................................... 10

Tex. Gov’t Code § 531.0055 (e). ............................................................... 11

-iii- Tex. Gov’t Code § 531.008(c)(2)............................................................... 10

Tex. Gov’t Code § 531.102(d) ................................................................... 14 Tex. Gov't Code § 531.102(k) ................................................................... 14

Tex. Gov't Code § 531.1021 ..............................................................passim

Tex. Gov't Code § 531.1021(g) ..........................................................passim Tex. Gov't Code ch 552 .................................................................. 4, 5, 6, 9

Tex. Gov't Code § 552.101 ............................................................. v, 21, 26 Tex. Gov't Code § 552.222(b) ............................................................. 16, 17 Tex. Gov't Code § 552.301(a) ................................................................... 21

Tex. Gov't Code § 552.342 ......................................................................... 2

Other Authorities

Acts 1995, 74th Leg., ch. 76, Sec. 8.002(a), S.B. 959............................... 10 Acts 2003, 78th Leg., ch. 198, § 2.20 (H.B. 2292) .................................... 18

Acts 2005, 79th Leg., ch. 249, § 18(b) (S.B. 1188) ................................... 19 Acts 2005, 79th Leg., ch. 349, § 18(b) ...................................................... 25 Acts 2011, 82nd Leg., R.S., ch. 620 (H.B. 1332). ..................................... 21

Acts 2011, 82nd Leg., R.S., ch. 620 (S.B. 688), Sec. 4. .....................passim

Acts 2011, 82nd Leg., R.S., ch. 620, § 4 ................................................... 25

Rules

1 Tex. Admin. Code § 371.1607 ............................................................... 12

-iv- STATEMENT OF THE CASE

Appellee Texas Department of State Health Services sued Appellant

Greg Abbott, Attorney General of Texas, seeking a declaration that:

(1) all information and materials compiled by the Texas Health and Human Services Commission Office of Inspector General in connection with any audit or investigation are confidential under Texas Government Code section 531.1021(g), without regard to whether the audit or investigation is done in connection with Medicaid fraud; and

(2) the information at issue in Letter Ruling OR2012-10072 was confidential by law and not subject to disclosure under the Texas Public Information Act. (CR 3).

The trial court granted Appellee’s Motion for Summary Judgment and

denied Appellant’s Motion for Summary Judgment. (CR 128–29).

The issue on appeal is whether the trial court properly granted

Appellee’s Motion for Summary Judgment.

ISSUE PRESENTED FOR REVIEW

Did the trial court correctly construe the relevant statutes in deciding

that the information at issue–information relating to an investigation of

alleged misconduct of a named Texas Department of State Health Services

(“DSHS”) employee–is excepted from disclosure under Texas Government

Code section 552.101 in conjunction with Texas Government Code section

531.1021, and that DSHS must not disclose the information at issue to the

requestors?

-v- INTRODUCTION

Texas Government Code section 531.1021(g) (“Section

531.1021(g)”) expressly makes confidential “[a]ll information and materials

subpoenaed or compiled” by the Texas Health and Human Services

Commission (“HHSC”) Office of Inspector General (“OIG”) “in connection

with an audit or investigation . . . .” The legislature placed no restrictions on

the subject matter of OIG investigations or audits deemed confidential

under Section 531.1021(g). The attorney general, however, seeks to limit

the applicability of Section 531.1021(g) to cover only audits and

investigations of alleged “fraud, waste, or abuse in the provision and

delivery of health and human services.” (Apt. Br. 4).

The trial court agreed with Appellee Texas Department of State

Health Services (“DSHS”) that Section 531.1021(g) mandates that all

information and materials compiled by the OIG in connection with any audit

or investigation are confidential. The trial court’s judgment should be

affirmed.

-1- STATEMENT OF FACTS

Procedural Background

DSHS filed suit under Texas Government Code section 552.342 to

challenge Letter Ruling OR2012-10072 (“Letter Ruling”). (CR 3–5). DSHS

received two requests for information relating to the OIG investigation of a

DSHS employee. (CR 16). Iris, one DSHS employee, filed a complaint

against Angel, another DSHS employee. (CR 16). The OIG investigated

the complaint and found it was not substantiated. (CR 16). Both Iris and

Angel filed requests with DSHS for information and materials related to the

investigation. (CR 16). DSHS sought a letter ruling, arguing to the attorney

general’s Open Records Division (“ORD”) that the information was

confidential under Section 531.1021(g) because it was compiled in an

investigation by the OIG. (CR 16).

ORD’s Letter Ruling concludes that Section 531.1021(g), as

amended in 2011, “applies only to audits and investigations of Medicaid

and other health and human services fraud and abuse.” The Letter Ruling

reasons that because the information was not related to Medicaid or other

health and human services fraud, abuse, or overcharges, DSHS could not

withhold any of the information at issue on the basis of Section

531.1021(g). (CR 17).

-2- There is no dispute about whether the information at issue was

compiled for an audit or investigation of Medicaid and other health and

human services fraud and abuse. It was not. The only part of the Letter

Ruling DSHS challenged in the trial court was the statutory interpretation of

Section 531.1021(g) in the Letter Ruling. (CR 17).

The parties filed cross-motions for summary judgment, stipulating

that:

1. the information at issue was not subpoenaed or compiled by the OIG in connection with a Medicaid fraud investigation; and

2. the information at issue was subpoenaed or compiled by the OIG in connection with an audit or investigation.

(CR 15). After a hearing on the parties’ cross-motions, the trial court

granted DSHS’s motion and denied Abbott’s motion. (CR 128-29). Abbott

appealed.

-3- The Statute at Issue

The current version of the statute at issue in this case is here, with

the pertinent part underlined:

TEX. GOV’T CODE § 531.1021(Subpoenas):

(g) All information and materials subpoenaed or compiled by the office in connection with an audit or investigation or by the office of the attorney general in connection with a Medicaid fraud investigation are confidential and not subject to disclosure under Chapter 552, and not subject to disclosure, discovery, subpoena, or other means of legal compulsion for their release to anyone other than the office or the attorney general or their employees or agents involved in the audit or investigation conducted by the office or the attorney general, except that this information may be disclosed to the state auditor’s office, law enforcement agencies, and other entities as permitted by law.

The Dispute

The parties agree that the information at issue was compiled by the

OIG for an investigation not related to Medicaid fraud. (CR 15). The issue

is whether Section 531.1021(g) protects as confidential materials compiled

by the OIG in connection with any audit or investigation, or only materials

compiled by the OIG in connection with a Medicaid fraud or other health

and human services fraud and abuse investigation.

-4- SUMMARY OF THE ARGUMENT

This is a statutory construction case. Section 531.1021(g) was first

enacted in 2003 and amended in 2005 and 2011. Until 2011 the statute

protected from disclosure “all information and materials subpoenaed or

compiled by the office in connection with an audit or investigation.”

The 2011 amendment 1 created a distinction between investigations done

by the inspector general and those done by the attorney general. It

provides different criteria for protecting these investigations from disclosure

depending on who did them. The amended statue says:

All information and materials subpoenaed or compiled by the office in connection with an audit or investigation or by the office of the attorney general in connection with a Medicaid fraud investigation are confidential and not subject to disclosure under Chapter 552. . . .

TEX. GOV’T CODE § 531.1021(g) (emphasis added).

In 2011 Abbott reversed his–and OIG’s–long-standing interpretation

of the statute; (“[F]ollowing the [2011] legislative action the Attorney

General concluded his office’s prior application of the statute had been in

error.” (Apt. Br. 19)). Abbott determined that the law does not protect OIG

investigations from disclosure unless they are related to “Medicaid and

other health and human services fraud and abuse.” (Apt. Br. 18). This

1 Acts 2011, 82nd Leg., R.S., ch. 620 (S.B. 688), Sec. 4.

-5- dramatic shift is inconsistent with the Inspector General’s ability to carry out

responsibilities imposed by the legislature and by the HHSC Executive

Commissioner, and it mis-reads the statute. DSHS relies on the actual

words in Section 531.1021(g). Abbott discusses a made-up version of the

statute and relies on “context,” criticizing DSHS for reading the pertinent

part of the law “in complete isolation.” (Apt. Br. 10).

DSHS does not seek any special protection for investigations into

employee misconduct. Aside from policy arguments for or against

protecting OIG investigations into employee misconduct, the legislature has

made no such distinction and has said that regardless of the topic, all

information and materials subpoenaed or compiled by the office in

connection with an audit or investigation are confidential and not

subject to disclosure under Chapter 552.

ARGUMENT

STANDARD OF REVIEW

“When both sides move for summary judgment and the trial court

grants one motion and denies the other, the reviewing court should review

the summary judgment evidence presented by both sides, determine all

questions presented, and render the judgment the trial court should have

-6- rendered.” Tex. State Bd. of Chiropractic Exam’rs v. Abbott, 391 S.W.3d

343, 347 (Tex. App.–Austin 2013, no pet.); see also Tex. Worker’s Comp.

Comm’n v. Patient Advocates, 136 S.W.3d 643, 648 (Tex. 2004). An

appeal of a trial court’s summary judgment is reviewed de novo. Traveler’s

Insurance Co. v Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Matters of

statutory construction, including interpretation of the PIA, are questions of

law that are reviewed de novo. City of Garland v. Dallas Morning News, 22

S.W.3d 351, 357 (Tex. 2000).

I. The Plain Meaning of Section 531.1021(g) Supports DSHS’s Interpretation

(Responding to Apt. Br. I. A.)

A plain reading of Section 531.1021(g) shows that the phrase “in

connection with an audit or investigation” defines the information made

confidential when compiled or subpoenaed by the OIG. For information to

be deemed confidential under Section 531.1021(g), it must be (1) compiled

or subpoenaed by the OIG (2) in connection with an audit or investigation.

Section 531.1021(g) limits only the type of inquiry afforded confidentiality:

OIG audits or investigations. Section 531.1021(g) does not limit the subject

matter of OIG audits or investigations afforded confidentiality. It does,

however, limit the subject matter of OAG investigations afforded

confidentiality to Medicaid fraud investigations.

-7- When construing statutes, courts must first look at the plain and

common meaning of the words chosen. FKM P’ship Ltd. v. Bd. of Regents

of Univ. of Houston, 255 S.W.3d 619, 633 (Tex. 2009). There is one

sentence at issue in this case. It addresses two separate state offices, with

separate and distinct conditions for confidentiality applicable to each. A

plain reading of the current statutory sentence, presented to show its

parallel structure, is:

All information and materials subpoenaed or compiled

by OIG

in connection with an audit or investigation

or

by the office of the attorney general

In connection with a Medicaid fraud investigation

are confidential.

Abbott’s interpretation of Section 531.1021(g) adds restrictions not

present in the statute. Indeed, Abbott’s interpretation depends on the

addition of the following phrase, bracketed and in bold:

-8- (g) All information and materials subpoenaed or compiled by the office in connection with an audit or investigation [of Medicaid fraud or other fraud, waste, and abuse in the provision and delivery of all health and human services in the state] or by the office of the attorney general in connection with a Medicaid fraud investigation are confidential and not subject to disclosure under Chapter 552 ....

By implying the additional phrase, Abbott attempts to limit the scope of

Section 531.1021(g) beyond the restrictions imposed by the Legislature.

Indeed, Abbott implies that without the additional restriction, OIG enjoys

limitless confidentiality. This is not so. Only information compiled in

connection with an audit or investigation is deemed confidential. And, as

discussed below, DSHS’s interpretation best accounts for OIG’s function

and responsibilities.

II. DSHS’s Interpretation Comports with OIG’s Purpose and Function

(Responding to Apt. Br. I. B and C.)

DSHS does not ask the Court to read Section 531.1021(g) in

isolation. In fact, DSHS asks this Court to read Section 531.1021(g) in the

context of OIG’s function, which includes investigations of employee

misconduct. Moreover, the only government entity relevant to this

discussion is OIG. Comparison of OIG’s responsibilities and privileges to

those of other governmental entities is irrelevant. (Apt. Br. 13-15). The

-9- legislature has directed in Section 531.1021(g) that all information compiled

by the OIG in connection with an audit or investigation is confidential.

Whether any other governmental entity should be governed by a similar

provision is entirely within the purview of the legislature.

As Abbott points out, Subchapter C in Chapter 531 of the

Government Code describes duties of the OIG, including Medicaid fraud

investigations, but there is nothing in Subchapter C–including the caption–

that limits the OIG to Medicaid fraud investigations or to investigations

under Subchapter C. Although Medicaid fraud is a significant concern for

the OIG, since 1995 the OIG has been charged with investigating more

than just Medicaid fraud:

The executive commissioner shall establish within the commission the office of inspector general to perform fraud and abuse investigation and enforcement functions as provided by Subchapter C and other law.

TEX. GOV’T CODE § 531.008(c)(2).2 (Emphasis added.)

The HHSC executive commissioner has discretion under Chapter 531

of the Government Code to organize the commission and to charge the

OIG with investigating not only Medicaid fraud, but also internal matters:

2 Added by Acts 1995, 74th Leg., ch. 76, Sec. 8.002(a), S.B. 959.

-10- § 531.0055. Executive Commissioner: General Responsibility for Health and Human Services Agencies

(e) Notwithstanding any other law, the executive commissioner shall adopt rules and policies for the operation of and provision of health and human services by the health and human services agencies.

TEX. GOV’T CODE § 531.0055 (e).

§ 531.008. Divisions of Commission

(a) Subject to Subsection (c), the executive commissioner may establish divisions within the commission as necessary for effective administration and for the discharge of the commission’s functions.

(b) Subject to Subsection (c), the executive commissioner may allocate and reallocate functions among the commission’s divisions.

(c) The executive commissioner shall establish the following divisions and offices within the commission:

(2) the office of inspector general to perform fraud and abuse investigation and enforcement functions as provided by Subchapter C and other law[.]

TEX. GOV’T CODE § 531.008.

For many years, the OIG has been investigating employee

misconduct at the various health and human service agencies. People

have filed requests for information about those investigations, and until

-11- Abbott’s new interpretation, ORD (including Abbott’s ORD) consistently

determined that information was confidential under Section 531.1021(g)

solely because it was compiled by the OIG for an audit or investigation,

without regard to the subject matter of that audit or investigation.

The OIG has discretion to decline investigation of any matter that

does not constitute fraud, waste, or abuse, as defined by 1 TEX. ADMIN.

CODE § 371.1607. (See CR 52). In such cases, agency management may

investigate. Where an investigation is conducted by management and not

by the OIG, the confidentiality of Section 531.1021(g) does not apply. The

key is whether the OIG determines that the matter warrants OIG attention.

Neither the existence nor the exercise of OIG discretion to make this

determination has been challenged here, nor has ORD suggested that the

OIG is not authorized to do investigations that do not involve Medicaid

fraud. The legislature has left with the HHSC executive commissioner and

the OIG the discretion to determine which matters will be investigated by

the OIG; when the OIG decides to investigate any matter, the legislature

has chosen since 2003 to protect the materials compiled by the OIG in

connection with that investigation. (See CR 54-56).

Abbott opines that DSHS’s interpretation could make confidential

materials compiled in connection with a “simple audit and accounting of

-12- office supplies.” (Apt. Br. 12). An accounting of office supplies, however, is

not covered by Section 531.1021(g) unless it is an “audit or investigation.”

Materials compiled in connection with an audit of office supplies might be

deemed confidential even under Abbott’s interpretation. Abbott seeks to

restrict the investigations afforded confidentiality to those involving fraud,

waste, and abuse in the provision and delivery of all health and human

services in the state. (Apt. Br. 5-6). Examples of waste noted in HHS

Circular C-027 include the purchase of unneeded supplies or purchase of

goods at inflated prices. (CR 46) The purchase or use of office supplies

could constitute waste, and an OIG audit could be covered by Section

531.1021(g).

The information at issue in this case is material compiled by the OIG

in connection with an OIG investigation of a complaint by one employee

against another. HHSC has assigned responsibility for investigating those

allegations to OIG, as set forth in Circular C-027 (See CR 46-53). Pursuant

to Section 531.1021(g), the information compiled by OIG in connection with

that investigation is confidential.

-13- III. DSHS’s Interpretation Comports with the PIA.

(Responding to Apt. Br. D.)

DSHS asks this court to strictly construe Section 531.1021(g) to

comply with both the letter and the spirit of the PIA. DSHS’s interpretation

would not lead to the “taxpaying public being denied access to any

information derived from investigations into the alleged misconduct of

government employees,” as Abbott suggests. (Apt. Br. 16). Any final

report on an OIG audit or investigation is public, pursuant to Section

531.102(k). That information or materials compiled during the audit remain

confidential, however, comports with the investigative goals of the OIG.

Keeping the information OIG acquires in connection with an audit or

investigation confidential serves the purpose of encouraging people to

report matters to OIG. The OIG is “entitled to access any information

maintained by a health and human services agency, including internal

records, relevant to the functions of the office.” TEX. GOV’T CODE §

531.102(d) (emphasis added). If the OIG’s investigative files were to be

suddenly declared open, then the OIG’s ability to obtain sensitive

information and carry out its investigative responsibilities would be severely

impaired. The OIG would face challenges during investigations, sought as

a condition to OIG access to information, about whether the investigation

-14- should, or would later, be deemed confidential. The OIG may not initially

know the scope of subject matters relevant to an investigation; the burden

of making such a determination before or during an investigation was not

imposed on OIG by the legislature and should not be imposed by the Court.

(See CR 44-45). Failure to protect the confidentiality of information

compiled in connection with an OIG audit or investigation could have a

chilling effect on persons with information to report in the future. To protect

those served by OIG, it is vital that persons and companies feel secure in

reporting information to the OIG.

DSHS seeks to follow the law as the legislature enacted it. The

legislature chose to limit confidentiality by the type of OIG inquiry, not the

subject matter of that inquiry. Any changes to this policy should be made

by the legislature, not the Court.

IV. The Legislature is Presumed Aware of Previous Letter Rulings

(Responding to Apt. Br. I. E.)

Abbott’s contention that DSHS has “repeatedly misconstrued” the

Attorney General’s interpretation of Section 531.1021(g) misses the point.

DSHS construes the provision as written. Abbott construes the provision

with additional restrictions not present in Section 531.1021(g).

-15- Abbott now contends that ORD’s prior interpretations of Section

531.1021(g) were incorrect, but in doing so, Abbott ignores one crucial

point: the legislature is presumed to be aware of ORD’s prior rulings, and

the legislature did not take any action to amend Section 531.1021(g) to

address Abbott’s prior interpretation. See City of Dallas v. Abbott, 304

S.W.3d 380, 386-87 (Tex. 2010) (“City of Dallas”).

The Supreme Court of Texas recognized in City of Dallas that the

“regulatory background created by the attorney general’s rulings may

properly be considered when interpreting the PIA. 304 S.W.3d at 386-87.

In City of Dallas, the Supreme Court had to construe Section 552.222(b) of

the PIA, which set a ten-day deadline for an agency to seek a ruling from

the attorney general if the agency wished to withhold responsive

information from a PIA request. The issue was whether the ten-day clock

started on the date of the original request or when the request was clarified

by the requestor. Id. At 386-87 (“We must decide what effect a request for

clarification or narrowing has on the ten-day deadline. Section 552.222(b)

is silent on this issue.”)

Pertinent to our case, the City of Dallas opinion presumed that the

legislature was aware of a decade-old decision of the attorney general

holding that the ten-day period was triggered not by the original request but

-16- by a clarification of the request, “even though the Act contained no

provision allowing a governmental entity to attempt to clarify or narrow a

request.” The Court noted that:

The regulatory background against which Section 552.222(b) was enacted reinforces our construction of the statute. More than a decade before the legislature enacted the clarification statute, the Attorney General had issued Open Records Decision 333, a decision that has never been withdrawn or overruled. . . . Presumptively, the legislature was aware of this opinion when it enacted Section 552.222(b). . . . While the opinion was not based on any explicit clarification provision, it did provide the legislature with the view of the officer in charge of enforcing the Act. . . . It is not unreasonable to assume that the legislature anticipated that Section 552.222(b) would have the same effect on the ten-day deadline.

Id. at 386-87 (emphasis added).

The Texas Supreme Court explained in McBride v. Clayton, 166

S.W.2d 125, 128 (Tex. 1942) that “statutes are presumed to be enacted by

the legislature with full knowledge of the existing condition of the law and

with reference to it.” In our case, it is not unreasonable to assume that the

82nd Legislature anticipated that Section 531.1021(g) as amended would

continue to protect OIG investigative materials as it had for years before,

since no amendment was made to the language defining the scope of

confidentiality of OIG investigative materials. Had the 82nd Legislature

disagreed with ORD’s prior interpretation or wanted to curtail the

-17- confidentiality historically afforded by the attorney general’s applied

interpretation of Section 531.1021(g), it could have done so in 2011 with

Senate Bill 688. It did not.

Section 531.1021(g) was first enacted in 2003 3 and amended several

times. The amendment at issue was enacted in 2011. 4 The original, 2003

version of Section 531.1021(g), according to the Senate Research Center’s

Bill Analysis of the new law, with pertinent part in bold:

(g) Provides that all information and materials subpoenaed or compiled by the office in connection with an investigation are confidential and not subject to disclosure under chapter 552, and not subject to disclosure, discovery, subpoena, or other means of legal compulsion for their release to anyone other than the office or its employees or agents involved in the investigation conducted by the office, except that this information may be disclosed to the office of the attorney general and law enforcement agencies.

Neither the 2003 version of the law nor the Bill Analysis suggested

that confidentiality of OIG investigation materials was limited by subject

matter. Confidentiality was extended to all materials compiled by the OIG

in connection with any investigation it undertook.

3 Acts 2003, 78th Leg., ch. 198, § 2.20 (H.B. 2292). 4 Acts 2011, 82nd Leg., ch. 620, § 4 (S.B. 688).

-18- Section 531.1021(g) was amended in 2005 5 to expand the

confidentiality protection to include material compiled by the OIG in

connection with an audit. The 2011 amendment of Section 531.1021(g)

again expanded the confidentiality protection, this time to include material

gathered by the attorney general in a Medicaid fraud investigation, just like

material gathered by the OIG in a Medicaid fraud investigation had been

since 2003. The Enrolled Bill Summary for S.B. 6886 describes it this way:

The bill provides the attorney general concurrent jurisdiction with the appropriate local prosecutor to prosecute an exploitation offense or Medicaid fraud offense that involves the Medicaid program and provides for the confidentiality of all information and materials subpoenaed or compiled by the office of the attorney general in connection with a Medicaid fraud investigation.

The House Research Organization Bill Analysis of the 2011

amendment to Section 531.1021(g) 7 similarly noted that the material

collected by the attorney general during a Medicaid fraud investigation

would be confidential:

5 Acts 2005, 79th Leg., ch. 249, § 18(b) (S.B. 1188). 6 http://www.legis.state.tx.us/BillLookup/BillSummary.aspx?LegSess= 82R&Bill=SB688 7 House Research Organization Bill Analysis of S.B. 688, p. 3 (May 17, 2011).

-19- All information and materials subpoenaed or compiled by the HHSC during a Medicaid fraud investigation would be confidential and not subject to disclosure under the Public Information Act or by discovery or subpoena. The same information and materials collected by the attorney general during a Medicaid fraud investigation would be confidential and not subject to disclosure.

DSHS’s interpretation of the statute, that the 2011 amendment of

Section 531.1021(g) had no effect on the confidentiality of the OIG’s

investigations, has support not only in the statute itself, but also in the long-

standing interpretation by the attorney general that all OIG investigations

were confidential. The attorney general in 2004 issued a “Previous

Determination” (OR2004-8876), holding that information compiled in

connection with an OIG investigation of Child Protective Services Programs

was confidential under Section 531.1021(g).

The significance of the attorney general’s Previous Determination in

this case is explained in the 2004 letter ruling:

-20- Next, you ask this office to issue a previous determination authorizing the commission to withhold all information and materials compiled by the OIG in connection with its investigations under section 552.101 of the Government Code in conjunction with section 531.1021(g) of the Government Code. After due consideration, we have decided to grant your request. Therefore, this letter ruling shall serve as a previous determination under section 552.301(a) that the commission must withhold all information and materials compiled by the OIG in connection with OIG investigations under section 552.101 of the Government Code in conjunction with section 531.1021(g) of the Government Code ....

OR2004-8876 (CR 62). By its terms, the Previous Determination does not

limit OIG investigations’ confidentiality by subject matter–it deems

confidential “all information and materials compiled by the OIG in

connection with its investigations . . . .”

The legislature thus had an opportunity in 2005 to “correct” the

attorney general’s published interpretation of Section 531.1021(g) as

announced in 2004, if it had intended the OIG’s non-Medicaid

investigations to be stripped of their previous confidentiality. Instead, the

legislature chose in 2005 to expand the scope of confidentiality to cover not

just OIG investigations, but also OIG audits.

The Senate Committee on Health and Human Services and House

Committee on Criminal Jurisprudence held hearings on S.B. 688 and its

companion, H.B. 1332. There was no testimony about Section 4 of S.B.

-21- 688 at either hearing. No further hearings were held. The Bill Analysis of

S.B. 688, as enrolled, includes Section 4, however, the “discussion” of

Section 4 merely repeats the text of Section 531.1021. (See CR 57-59).

The enrolled Bill Summary makes no mention of Section 4. (See CR 60).

Thus, no legislative history exists on the intent of Section 4 of S.B. 688.

If the authors of S.B. intended to severely limit the pre-existing

confidentiality for OIG, on which the OIG had relied for many years, it is

likely that some mention of this outcome would have been made by the

sponsors or persons testifying for, against, or on the bill. (See CR 57-59).

Silence, instead, supports reading the amendment to be applicable only to

information compiled “by the office of the attorney general in connection

with a Medicaid fraud investigation,” and to have no effect on the scope of

information made confidential in connection with OIG investigations.

In enacting a statute, it is presumed that a just and reasonable result

is intended, and that a result feasible of execution is intended. TEX. GOV’T

CODE § 311.021 (3), (4). Limiting confidentiality of OIG investigations

would not be consistent with OIG responsibilities, since the 2011

amendment of Section 531.1021(g) did not narrow or even address OIG’s

responsibilities. Because OIG’s responsibilities were not narrowed by a

contemporaneous legislative action, it makes no sense that the previous

-22- confidentiality expressly accorded to OIG audits and investigations would

have been narrowed by S.B. 688.

Indeed, as late as June 21, 2011, Abbott issued yet another

straightforward interpretation of Section 531.1021(g). An HHSC agency

received a request for information related to “suspected violations or

misconduct by employees regarding outside employment and/or accepting

outside compensation.” As it always had before, ORD applied Section

531.1021(g) to protect information purely on the ground that it was OIG

investigative material compiled “in connection with an audit or

investigation,” holding:

All information and materials subpoenaed or compiled by the [Office of the Inspector General of the Health and Human Services Commission (the “office”)] in connection with an audit or investigation are confidential and not subject to disclosure under [the Act] . . . .

Letter Ruling OR2011-08832 (See CR 65).

In fact, between the 2005 and 2011 amendments to Section

531.1021(g), the attorney general continued issuing determinations that

material compiled for any OIG investigation was protected. For example:

-23- OR2007-02128 Protected information about complaints filed CR 69-74 against the requestor OR2007-04413 Protected employee records of the CR 75-78 requestor OR2008-08172 Protected information relating to the CR 79-83 requestor’s job performance, employment actions against HHSC, and personnel records of certain employees OR2008-14653 Protected the requestor’s last five CR 84-88 performance evaluations compiled in an investigation of the requestor OR2009-07508 Protected employee emails regarding a CR 89-91 specific incident OR2009-08112 Protected information about the requestor’s CR 92-93 employment with the state agency OR2009-10828 Protected information about sexual CR 94-95 harassment allegations against the requestor OR2010-14261 Protected information about the number of CR 96-98 OIG investigations OR2011-08614 Protected information compiled for an OIG CR 99-103 investigation into employee misconduct

These attorney general Letter Rulings are not presented as authority;

they are presented because the 2011 82nd Legislature is presumed to have

been aware of the interpretation of Section 531.1021(g) long applied by the

-24- attorney general in enforcing the PIA. 8 The fact that the Letter Rulings are

not dispositive–or that ORD has changed its mind–does not prevent the

Court from noting that for many years, before the 2011 amendment to

Section 531.1021(g), the attorney general interpreted the statute by giving

meaning to all the words, especially those at issue in this case, 9 agencies

have relied on these determinations, and the legislature was presumably

aware of these determinations when it amended Section 531.1021(g) in

2005 10 and 2011. 11 In each instance, if the legislature had wanted to

change the attorney general’s interpretation of Section 531.1021(g) to

narrow the scope of material deemed confidential in relation to OIG

investigations, it could have done so. In fact, with each amendment, the

legislature expanded the scope of material deemed confidential. If the

8 Even though Abbott sent a letter to the court in another lawsuit on April 13, 2012, announcing that previous attorney general rulings were “wrong on the issue of extending Section 531.1021(g)’s confidentiality to protect investigations of employee misconduct unrelated to an allegation of fraud or abuse . . ., “ the Court is entitled to consider these previous Letter Rulings, because the 82nd Legislature is presumed to have been aware of them. 9 “We recognize that opinions of the Attorney General are persuasive authority and are not controlling on the courts . . . . Accordingly, we are not bound to follow them–especially in a situation, as here, where the Attorney General has issued conflicting opinions on the same issue.” City of Fort Worth v. Abbott, 258 S.W.3d 320, 326 (Tex. App.–Austin 2008, no pet.) (citing Houston Chronicle Publishing Co. v. City of Houston, 531 S.W. 2d 177, 185 (Tex. Civ. App.–Houston [14th Dist.] 1975), writ ref’d per curiam, 536 S.W.2d 559 (Tex. 1976)). 10 Acts 2005, 79th Leg., ch. 349, § 18(b). 11 Acts 2011, 82nd Leg., R.S., ch. 620, § 4.

-25- legislature disagrees with this interpretation, it may amend the statute to

clarify its intent.

PRAYER

Section 552.101 of the Public Information Act excepts from disclosure

information that is confidential by law. Texas Government Code section

531.1021(g) makes information in all audit and investigation files of the OIG

confidential. The information at issue in this appeal is, therefore, excepted

from disclosure, and the trial court’s ruling should be upheld.

DSHS asks the Court to affirm the trial court’s ruling.

Respectfully submitted,

KEN PAXTON Attorney General of Texas

CHARLES E. ROY First Assistant Attorney General

JAMES E. DAVIS Deputy Attorney General for Civil Litigation

ROBERT O’KEEFE Division Chief Financial Litigation, Tax, and Charitable Trusts Division

-26- /s/ Ann Hartley ANN HARTLEY Assistant Attorney General Financial Litigation, Tax, and Charitable Trusts Division State Bar No. 09157700 P.O. Box 12548 Austin, Texas 78711-2548 Telephone: (512) 936-1313 Telecopier: (512) 477-2348 ann.hartley@texasattorneygeneral.gov

CERTIFICATE OF COMPLIANCE

In compliance with T.R.A.P. 9.4(i)(2), this brief contains 4,978 words,

excluding the portions of the brief exempted by Rule 9.4(i)(1).

/s/ Ann Hartley ANN HARTLEY Assistant Attorney General Counsel for Appellee

-27- CERTIFICATE OF SERVICE:

I hereby certify that a true copy of this Appellees’ Brief was sent by

electronic mail this 9th day of February, 2015, to counsel for the attorney

general, as follows:

Matthew R. Entsminger Assistant Attorney General Open Records Litigation Administrative Law Division Office of the Attorney General of Texas P.O. Box 12548 Austin, Texas 78711-2548 matthew.entsminger@texasattorneygeneral.gov

/s/ Ann Hartley ANN HARTLEY Assistant Attorney General Counsel for Appellee

-28-

Tex. Gov’t Code § 531.1021(g)

-29- V.T.C.A., Government Code § 531. 1021 Page 1

Effective: September 1, 2011

Vernon's Texas Statutes and Codes Annotated Currentness Government Code(Refs & Annos) Title 4. Executive Branch (Refs & Annos) Subtitle I. Health and Human Services Chapter 531. Health and Human Services Commission (Refs & Annos) Subchapter C. Medicaid and Other Health and Human Services Fraud, Abuse, or Overcharges (Refs & Annos) § 531. 1021. Subpoenas

(a) The office of inspector general may request that the commissioner or the commissioner's designee approve the issuance by the office of a subpoena in connection with an investigation conducted by the office. If the request is approved, the office may issue a subpoena to compel the attendance of a relevant witness or the production, for in- spection or copying, of relevant evidence that is in this state.

(b) A subpoena may be served personally or by certified mail.

(c) If a person fails to comply with a subpoena, the office, acting through the attorney general, may file suit to enforce the subpoena in a district court in this state.

(d) On finding that good cause exists for issuing the subpoena, the court shall order the person to comply with the subpoena. The court may punish a person who fails to obey the court order.

(e) The office shall pay a reasonable fee for photocopies subpoenaed under this section in an amount not to exceed the amount the office may charge for copies of its records.

(f) The reimbursement of the expenses of a witness whose attendance is compelled under this section is governed by Section 2001.103.

(g) All information and materials subpoenaed or compiled by the office in connection with an audit or investigation or by the office of the attorney general in connection with a Medicaid fraud investigation are confidential and not subject to disclosure under Chapter 552, and not subject to disclosure, discovery, subpoena, or other means of legal compul- sion for their release to anyone other than the office or the attorney general or their employees or agents involved in the audit or investigation conducted by the office or the attorney general, except that this information may be disclosed to

© 2015 Thomson Reuters. No Claim to Orig. US Gov. Works. V.T.C.A., Government Code § 531. 1021 Page 2

the state auditor's office, law enforcement agencies, and other entities as permitted by other law.

(h) A person who receives information under Subsection (g) may disclose the information only in accordance with Subsection (g) and in a manner that is consistent with the authorized purpose for which the person first received the information.

CREDIT(S)

Added by Acts 2003, 78th Leg., ch. 198, § 2.20, eff. Sept. 1, 2003. Amended by Acts 2005, 79th Leg., ch. 349, § 18(b), eff. Sept. 1, 2005; Acts 2011, 82nd Leg., ch. 620 (S.B. 688), § 4, eff. Sept. 1, 2011.

Current through the end of the 2013 Third Called Session of the 83rd Legislature

(C) 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.

END OF DOCUMENT

© 2015 Thomson Reuters. No Claim to Orig. US Gov. Works.