by the constitution of massachusetts it is me the duty of the legislatures and magistrates and all future periods of this commonwealth to encourage private societies and public institutions rewards and immunities for the promotion of agriculture arts sciences commerce trades manufacturers and natural history of the country and it is declared with equal explicitness that no me on nor corporation or association of men have any other title to obtain advantages or particular and exclusive privileges distinct from those of the community than what arises from the consideration of services rendered to the public although neither the constitution nor legislative enactments of the commonwealth afford any definition in terms of the word corporation the declarations above cited may indicate clearly enough the ordinary force of the term as by them employed from the law of massachusetts a manual it's absolutely your honor and i will get to that in fact section of which it was in fact violated today's case is about finding what a state agency is and in doing so whether the shield of sovereign immunity extended to the university of massachusetts medical school the eleventh amendment to the united states constitution gives the state sovereign immunity from suit that will quote so do you concede consulate the eleventh  audit are kyle david who stated that three point eight million dollars was turned over out of the coffers of the medical school the business unit known as commonwealth medicine respect only the affidavits were dated july twenty ninth two thousand and fifteen they were turned over to the leaders council by the us attorney in november two thousand and fifteen after we had filed a motion for relator share based on the legal bill on his fraud it's my indicates first of all that commonwealth medicine is in fact the stated business unit of the medical school it also indicates that the funding that the return of this three point eight million dollars came directly from the medical school how did they accomplish that well first of all they have insurance and so seven hundred thousand dollars worth of insurance was paid over from their private insurer to the the state to the executive office of health and human services they also appropriated funds from the legislature in massachusetts and has received from since its inception actually your honor that's not correct respectfully they only receive five percent of their funding from the so the court is aware we did file a motion for me later share in this case i'm just about two months ago and again the information was new to us it came out of the fact that there was an insolvency in the estate of a leader of the law and his case that no i don't want to take your and family court that introduced this information if you don't mind for the last two minutes before you get to you know you reserve time for rebuttal but could you respond to justice souter's question two at the very beginning of your argument about to be used by the government and he knowingly delivered our cause to be delivered less than all that money or property how does implicate the medical school because mr filani was an employee who was charged with handling fifty nine million dollars the associate vice chancellor knew or didn't know about this transmetal she had inevitably had to sign off on the trans middles that were going over i don't know what investigation she did to understand that three point eight million dollars that should have been over the second one is based on the fact that a one eighty one he talks about the actual false admissions if you're submitting accounting reports that are in fact faults and money that should be turned over to the commonwealth and federal government isn't being turned over that i do think you know we look for dismissal both on the stevens arm of the state inquiry and in addition on the eleventh amendment which is jurisdictional we think those issues overlap it's perfectly appropriate to decide we think the false claims act statutory issue in  no where in that sequence of events is a false claim for payment submitted to any governmental entity by anyone but not by the university certainly not even by mr filani and so to state your honor we don't believe that university submitted false claims for payment there's a lot of talk about reports they're made for the first time in a reply brief here in this court they're not actually played in  he's suing under the false claims act not the false record keeping act and the political vision of the false claims act would impose liability on an entity that creates false records or statements material to a here does not make didn't address at all the second theory of fraud which was a theory that is somewhat convoluted appears to be that we misallocated in this bill cost the medicaid program under this court's precedents in specific instances of at least a representative number of specific false claims and it's undisputed that that has not been done here so that's really a threshold matter disposes really of both theories under nine in addition to that fatal deficiency the complaint also does not with any particular i read all point to any specific cost that was misallocating to any specific item that was mis built to the program and that you know again dispose as we think both of th court and stevens reached that issue in lieu of the citing eleventh amendment issue which is constitutional and jurisdiction right and it justified that on the grounds that the substantive inquiry was nearly identical so if it it was perfectly appropriate to decide and a virtually identical statutory issue that avoided the constitutional question but i don't know that that rationale would apply to essentially this court assuming it has hillman's decision granting fifty four b pointing out that he's never been asked to certify the denial of the motion to leave the final for them and went right and so the complicating factor is that between the time when mr let's opening the first file which we believe prematurely addressed issues that were not certified for appeal and the time our police brief was due mr filani state had been dismissed out and at that point there was a final judge and so you know whether that means you have a jurisdictional problem at this point or not i think is unclear because arguably at this point as you sit here today you had a premature don't appeal that was filed at me under the amended  when you say maybe just put it this way eat if i understand you right that we have no case at all not because stevens but because of a premature appeal or if we have a case before it's a case that has both a disputed  university applied equally to the individual defendants we think this court has discretion to affirm on those grounds because mr well that is represented here in court and to and to bind him to it at first blush when i said there's a reason why i'm asking you that i take the point about how stevens explained why they got into the why they could bypass the whim of the moment because they would decide the same they claimed issue under the f c c of ca and you say well that's not the situation here if you jump to ninety that's a step beyond but i'm wondering what we're required to do or not in a case in which we must decide if it were the case the ninety issue if this is an of that is clearly dispositive as to the state vast majority of state universities in this country have been deemed the arms of state and it's hard to imagine if if university massachusetts is not an arm of the state what university would be because every indication points to it being an arm of the state it was  d by the legislature it was the board of trustees that was set up is a stablished and required to administer the university quote on behalf of the commonwealth its employees or state employees were entitled to all the privileges of state employees the governor  university only dispose of that property in the name of the commonwealth and subject to approval by the governor and by the council on higher education turning general of massachusetts over seas and must approve all of its litigation when you go through all the structural benefit what the basis for the conclusion that they are legally like that they are liable for the judgment absolutely so we cited first of all the controller regulations that are cited in our brief that we're the controller has a process by which the university can seek funding for judgments there are there's the big dog that didn't bark here which is there's not a single statement anywhere by the legislature separating itself out and from any of the  university and we think the really the most obvious and most significant telling statement here by the commonwealth is the one thousand nine hundred seven statute in which the commonwealth did spend out in privatized the clinical division the hospital of the medical school and these of the hospital would be those of the commonwealth and it also makes clear that the remaining divisions of the medical school that had not been spun off remain that their bodies remain those of the state and so every indication here  goes in that direction there's been a lot of sort of references in there in the reply brief to things that i've been going on with their leader share and what access the the universe the medical school has seventy two million you had civil monetary penalties are related species you can see what they're seeking below despite this suggestion that this is only really a few million dollars is a substantial award clearly would put even if you if the inquiry were you know to speculate about the ability to pay and finally what i would say which is the supreme court decision and this was raised by the first time of their party for slights on our brief but unanimous supreme court decision in regions of the state of california versus you know which  allegation there was the state of california university of california should not be viewed as an arm of the state for that case because it had an indemnity agreement in place which would indemnify it fully for any damages and supreme court said two things number one is that the provides for the university to manage its own operations and to have its responsibilities powers and duties in the management of the areas of the university which is not subject to or superseded by any other state agency board your mission department office honor according to the first circuits ruling in university of rhode island first two tests in the states formal incorporation of the state related entity is not necessarily dispositive on the issue of its autonomy one either for immunity or diversity purposes  in in that case you or i they pointed for example ten out of thirteen trustees that were appointed by the ryan governor for three year terms here sixteen out of nineteen or a point that you mass to serve five year terms and they serve without compensation so like this court found in chester ten they're insulated from any economic pressure remove all moreover this court observed in pheasant is that well the governor's appointment power over the board is not enough in itself to establish that an entity is an arm of the state as well aside from the power of appointment the gov has no direct voice in the university's decision making that would support factor number four unfenced yes i mean the big show obviously comes down to is whether or not the commonwealth is  stop for the lawsuits that might in fact come against the medical school and albeit i understand the court's not technically looking at the seventh of the four want a five certainly we know that they were able to pay that three point eight million dollars without show is that since there are so many other sources from which the medical school can get its funding that the commonwealth treasury being just five percent of the medical schools budget really takes it out of this idea that in fact it is being funded it's this is in stark contrast to i was sorry more where the commonwealth provide the bulk of the funding for the university operations more than sixty percent of your p r s funding comes from the government so with respect to the medical school home k medicine center for health care financing the commonwealth has not assumed that obligation either directly or indirectly since virtually all the funding needed for the operation by the medical school is raised on its own through research to service not involved with the day to day operations in terms of that in fact even with the annual reports that are estimated you know there's to get in you know a a format where there's no detailed expenditures or receipts that are attached to it so they really have financial times maybe more so than even the enabling statute says but that's really the outcome of what this case is about not every state entity should be treated as a state agency that takes away from the dignity of the commonwealth thank you ron