McMillen v. Texas Health & Human Services Commission

485 S.W.3d 427, 59 Tex. Sup. Ct. J. 421, 2016 Tex. LEXIS 178, 2016 WL 766799
Texas Supreme Court·Decided February 26, 2016·No. NO. 15-0147·Published·Cited by 13 cases

Opinion

PER CURIAM

This Whistleblower Act case concerns whether a state employee’s alleged report of a legal violation was made to an appropriate law-enforcement authority. The court of appeals held that a former employee of the Texas Health and Human Services Commission did not report to such'an authority. 483 S.W.3d 576, 582, 2015 WL 134686 (Tex.App.-Austin 2015). We disagree. Because the reported-to persons had power beyond internal discipline to regulate under or enforce the law allegedly violated, they were an appropriate law-enforcement authority under the Whistleblower Act. Accordingly, we reverse the court of appeals’ judgment and remand the case to that court, so it may consider the remaining contested elements of this Whistleblower claim.

Michael McMillen, an attorney, served as Deputy Counsel for the Commission’s Office of the Inspector General (OIG). In early 2011, Karen Nelson, a Deputy Inspector General for the Commission, asked McMillen to research the legality of the Commission’s practice of obtaining payments from certain recipients of Medicaid benefits. McMillen prepared a memorandum concluding the Commission’s actions lacked, legal justification. His memorandum, however, cited neither statutes nor case law.

McMillen submitted the memorandum to Nelson, who gave copies to other Deputy Inspectors General. McMillen asserts he made another’ report to the head of the OIG Internal Affairs Division, as well as to the Commission’s Executive Commissioner. In early 2012, McMillen was placed on administrative leave, and he was terminated several months later.

After being fired, McMillen sued the Commission and its Executive Commissioner in his official capacity under the Whistleblower. Act, which under certain circumstances waives a state entity’s immunity from suit for retaliatory discharge. Tex Gov’t Code § 554.0035. The Commission and its Executive Commissioner filed a plea to the jurisdiction, arguing that McMillen’s allegations were not sufficient to invoke the Act and waive immunity. Specifically, the Commission argued McMillen (1) did not allege a good-faith report of a violation of law, and (2) did not allege the report was to an appropriate law-enforcement authority. The trial court denied the Commission’s plea, but following the Commission’s interlocutory appeal, the court of appeals reversed. Id. at 579. The court of appeals focused on the second issue, concluding the Act could not [429] protect McMillen because he did not report to an appropriate law-enforcement authority. Id. at 586. In the process, the court also considered whether the statutes McMillen points to prohibit the Commission’s program at issue. Id. at 584.

The Whistleblower Act protects “a public employee who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority.” Tex. Gov’t Code § 554.002(a). The reported-to authority is an appropriate law-enforcement authority if it is ■

a part of a state or local governmental entity or of the federal government that the employee in good faith believes is authorized to:'
(1) regulate ünder or enforce the law alleged to be violated in the report; or
(2) investigate or prosecute a violation of criminal law.

M§ 554.002(b).

To be in “good faith,” an employee’s belief about the reported-to authority’s powers must be “reasonable in light of the employee’s training and experience.” Tex. Dep’t of Tansp. v. Needham, 82 S.W.3d 314, 321 (Tex.2002). An authority’s power to discipline its own or investigate internally does not support a good-faith belief that it is an appropriate law-enforcement authority. Univ. of Tex. Sw. Med. Ctr. v. Gentilello, 398 S.W.3d 680, 686 (Tex.2013). Instead, the authority must have outward-looking powers. “[I]t must have authority to enforce, investigate, or prosecute violations of law against third parties outside of the entity itself, or it must have authority to promulgate regulations governing the conduct of such third parties.” Id. Under the Act, the authority’s power to “regulate under” or “enforce” must pertain to “the law alleged to be violated in the report.” Tex: Gov’t Code § 554.002(b)(1)/'

Because “the particular law the public employee reported violated is critical to the determination” of whether the authority is an , appropriate law-enforcement authority, we begin by examining the statutes McMillen asserts the Commission violated. Needham, 82 S.W.3d at 320. McMillen argues the following statutes prohibit the Commission’s program;, the Texas General Appropriations Act,, sections 32.039, and ,32.064 of the Texas Human Resources Code, and section 1396p(b) of Title 42 of the United States Code. McMillen does not explain how the General Appropriations Act or sections 32.039 and 32.064 of the Texas Human Resources Code prohibit the complained-of conduct. These statutes authorize specific agency action,,but McMillen does not address how they prohibit the Commission’s conduct he reported. >

We therefore turn to section 1396p(b) of Title 42 of the United States Cede. This statute generally prohibits any “adjustment or recovery-of any medical assistance correctly paid on behalf of an individual under the State plan,” with- limited exceptions under which “the State shall seek adjustment or recovery.” 42 U.S.C. § 1396p(b)(l). To the extent the State must seek recovery, it “may be made only after the death of the individual’s surviving spouse, if any.” Id. § 1396p(b)(2). Texas law incorporates this federal statute, requiring that the Commission’s “executive commissioner: shall ensure that' Medicaid implements 42 U.S.C. Section 1396p(b)(l).” Tex. Gov’t Code § 531.077(a). Based on the limited record before us, we agree with McMillen that section 1396p(b) relates to the Commission’s program at issue in this case, which allegedly involved attempting to recover Medicaid payments from certain beneficiaries.

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McMillen v. Texas Health & Human Services Commission, 485 S.W.3d 427, 59 Tex. Sup. Ct. J. 421, 2016 Tex. LEXIS 178, 2016 WL 766799 (Tex. 2016).

485 S.W.3d 427 (McMillen v. Texas Health & Human Services Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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