Dallas court states it is “not prepared to conclude that a State entity can waive sovereign immunity by its conduct.”

 

Larry M. Gentilello M.D. v. University of Texas Southwestern Health Systems, 05-13-00149-CV (Tex. App. – Dallas, March 24, 2014) and Larry M. Gentilello M.D. v. Dallas County Hospital District d/b/a Parkand Hospital 05-13-00150-CV (Tex. App.  – Dallas, March 24, 2014).

This is a set of two cases resulting from the termination of Dr. Gentilello after he allegedly reported illegal activity under the Texas Medicaid Fraud Prevention Act (“TMFPA”). He filed several lawsuits, one of which was considered by the Texas Supreme Court in Univ. of Tex. Southwestern Med. Ctr. at Dallas v. Gentilello, 398 S.W.3d 680, (Tex. 2013) under the Whistleblower Act.  The Supreme Court held reporting to an internal auditor or the board was insufficient to trigger protection. However, here he is claiming a separate cause of action under TMFPA.  The 5th Court of Appeals affirmed the granting of a plea to the jurisdiction noting sovereign immunity was not waived. This case may be of importance to other governmental entities, like cities, since the analysis can apply to other claims of a waiver of sovereign immunity.

The court first noted analyzed whether a settlement agreement U.T. Southwestern (“UTSW”) and Parkland reached with the state and federal governments in a qui tam (brought by Gentilello) suit waives their immunity from suit for a private cause of action under TMFPA. The court held the language in the agreement was not a waiver. The court did not address the case law out there holding that it is the legislature which waives immunity from suit and an entity cannot do so by contract.

The court then addressed suit directly under TMFPA and simply noted that a statutory section specifically states it does not waive immunity.  Gentilello’s waiver by conduct arguments were next. The court went to the step of stating (without reaching the actual facts of this case) if it assumes UTSW’s conduct was egregious and terrible, it was “not prepared to conclude that a State entity can waive sovereign immunity by its conduct.”  It went through various case law citations and finally noted that Texas law does not clearly support this concept. Anyone facing a waiver by conduct issue should find this analysis and citation very helpful.

Given no waiver of immunity exists for a specific private cause of action under TMFPA the trial courts grant of the plea was proper. Affirmed.

If you would like to read these opinions please click here and here. Both cases before Justices Moseley, Lang, and Brown. Opinions by Justice Moseley and Brown. The attorneys for Gentilello are listed as Diana L. Faust, Charla G. Aldous, R. Brent Cooper, Kyle Burke, Jeffrey H. Rasansky and Cynthia Shea Goosen. The attorneys for UTSW and DCHD are Brian Scott Bradley, Helena Venturini, David Luningham, William Burns, and Michael W. Youtt.