### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-14-00509- CV

The University of T exas at Austin, Appellan t

v. Dijaira B. Sm ith, App ellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 200 TH JUDICI AL DISTRICT NO. D-1 -GN-1 3-0 0431 8, H ONO RAB LE AMY CLARK MEACH UM, J UDGE P RESIDING

M E M O R A N D U M O P I N I O N
The University of Tex as at Austin appea ls t h e d en ial of t he plea to the j urisdiction it filed in Dijaira B. Smit h’s suit broug ht pursuant to the Texas Whis tleblower Act. See Tex. Gov’t Code §§ 554.001-.009 (the Act). The University contends that the trial court err ed in concluding that Smit h made a g ood faith repor t of a violation of law to an appropr iate law enfor ceme nt authority and,

a s a c o n s e q

u e n c e , d e te r

mi n in g th a

t it h a d s u b je c t- ma tt e r ju r is d ic ti o n o v e r Sm it

h ’ s c la im s . B e c a

u s e w e conclude that Smit h failed to make a repor t of a violation of law to an “appr opriate law enfor ceme nt authority ” as require d to waive the University ’s g overnme ntal immunit y , we reve rse the order deny ing the plea to the jurisdiction and dismiss the suit for lack of subject-matter

jurisdiction.

BACK GR OUND S m i t h wa s former ly employ ed by the University as Direc tor of Financ e for th e University I nterschola stic L eag ue (UI L ). I n 2012, the University ’s Offic e of I nte r n a l A u d its (I nterna lAudits) beg an an investiga tion into alleg ations made ag ainst the UI L

. Smit h was asked to meet with

audit ors from I nterna l Audits. Smit h told the auditors that: (1) the UI L ’s Ex ecutive Direc tor had , in an eff ort to bolster a UI L vendor’ s application for a home loan, committed bank fra ud by falsely

re p resenting to a mortg ag e lender that the wife of a UI L vendor would be working as a co n t ra ct employ ee for the UI L ; (2) the UI L had m ade unauthorized transfe rs of funds to the University ’s Division of Diversity and Communi ty Eng ag ement in violation of Texas Gover nment Code section 771.004; (3 ) a UIL d ep uty direc tor sexually hara ssed a UI L employ ee; (4) the same UI L deputy direc tor used a vehicle identified as belong ing to the Br idge City I ndepende nt School District while employ ed by the UI L ; (5) the same deputy d i re ct o r soug ht to have Smit h alter a g overnme nt document in connec tion with an open rec ords reque st; (6) the UI L employ ed actionable hiring and empl oy ment prac tices; and (7) the UI L failed to comply with laws g overning its procurem en t o f
g oods and service s. Smit h later met with University attorney s from the Offic e of the Vice President for L eg al Affa irs (L eg al Affa irs) and confirme d her ear lier statements about the use of a Br idge City
I SD vehicle and the transfe r of funds betwee n the UI L and the Division of Diversity and Communi ty Eng ag ement. Acc ording to Smit h, afte r providing this information and co o p er at ing with the auditors, she was subjected to a series of adver se employ ment actions culminating in the termination of her employ ment. There afte r, Smit h filed suit alleg ing that the adver se employ ment actions, including the termination of her employ m en t, wer e in violation of the Act. Smit h claimed that the adver se employ ment actions wer e the direc t result of her providing information to au d i t ors from I nterna l Audits and to attorney s from L eg al Affa irs. I n response , the University filed a plea to the jurisdiction

2in which it asser ted t hat t he court lacke d subject-matter jurisdiction over Smith’s suit beca use she had failed to comply with the req u i re m en t s for bring ing a claim under the Act. Specifica lly , the University contende d that Smit h did not repor t a violation of law by UI L or its employ ees to an appropr iate law en forc ement authority

. See id. § 554.002(b) (def ining when repor

t is made to “appr opriate law enfor ceme nt authority ” under Act). After a hear ing, the trial court denied the University ’s pl ea to the j urisdiction. The University then perfec ted t his interlocutory appea l. See Tex. Civ. P ra c. & Rem. Code § 51.014(a) (8) (allowing party to pursue interlocutory appea l of trial court’ s ruling de ny ing ple a to jurisdiction filed by g overnme ntal unit).

STANDARD OF REVIEW AND STATUTORY F RAMEWORK A plea to the jurisdiction is a dilatory plea that se eks dismissal of a ca se for lack of subject-matter jurisdiction. Harris Cnty. v. Syke s , 136 S.W .3d 635, 638 (Tex. 2004). Subject-matter ju r is d ic ti o n p r e s e n

ts a q u e s ti o n o f la

w th a t a p p e ll a te c o u r ts r e v ie w d e n o v o . Ci ty o

f H o u s to n v
. R h u le , 417 S.W .3d 440, 442 (Tex. 2013)

. The plaintiff has the burden of alleg ing fac ts tha t a ffirma tively demonstrate the trial court’s jurisdiction. Texas Dep’ t of Parks & W

ildlif e v. Miranda , 133 S.W .3d 217, 226 (Tex. 2004). When subject-matter jurisdiction is premised on a cause o f action under the Act, the plaintiff must alleg e fac ts which, if true, would establish a violation of the Act. See State v. Lueck , 290 S.W .3d 876, 880-81 (Tex. 2009). We beg in with the alleg ations in Smit h’s live pleading s, which we construe liberally in favor of jurisdiction and, unless challeng ed with evidenc e, take as true. See Miranda , 133 S.W .3d at 226-27. We al s o consider any evidenc e relevant to the jurisdictional inquiry

. See City of Elsa v. Gonzalez , 325 S.W .3d 622, 625 (Tex. 2010); Bland Indep. Sch. Dist. v. Blue , 34 S.W .3d 547, 555 (Tex. 2000). When, as here , the jurisdictional issues and fac ts
3implicate the merits, the defe ndant is “put to a burden very simil ar to that of a movant for summary

judgme nt.” See University of Tex. v. Poindexte r , 306 S.W .3d 798, 806-07 (Tex. App.—Austin 2009,

no pet.). Consequently , only conclusive contra ry evidenc e suffice s to neg ate the exis tence of any of the jurisdictional fac ts Smit h has pleade d. I f the rec ord raises a fac t question that require s addre ssing th e me r it s o f th e c a s e in o r d e r to r e s o lv e ju r is d ic ti o n , th e n th e c a s e ma y p r o c e e d

. M

ir a n d a , 1 3 3 S. W. 3 d
at 227-28. Howeve r, if the rele vant evidenc e is undisputed or fails to raise a fac t question, the court rules on jurisdiction as a ma tter of law

. Id.

Section 554.0035 of the Act waives sovere ign immunit y when a public employ ee

a ll e g e s a v io la

ti o n o f th e A c t. S

e e T e x. G o v ’ t Co d e § 5 5 4

. 0 0 3 5

. A v io la ti o n o f th e A c t o c c u

r s “ w h e n

a g overnme ntal entity reta liates ag ainst a public employ ee for making a g ood-fa ith repor t o f a violation of law to an appropr iate law enfor ceme nt authority

. ” L u eck , 290 S.W .3d at 878 (citing Tex. Gov’t Code § 554.002(a) ). Thus, to qualify for the Act’s waiver of immunit y , Smit h must have pleade d fac ts which, if true, establish a violation of section 5 54.002. To do so, Smit h must have alleg ed the following elements: (1) she was a public employ ee; (2) she made a g ood faith repor t of

a violation of law by her employ ing g overnme ntal entity or another public employ er; (3) she made the repor t to an appropr iate law enfor ceme nt authority ; and (4) she suffe red reta liation as a result of making the re port. See Tex. Gov’t Code § 554.002(a)

.
DISCUSSIO N The University ’s plea to the jurisdiction did not contest th at S m i t h wa s a public employ ee, that she m ade a good faith repor t of a violation of l aw by her employ ing gove rnmental entity , or that she suff

ere d reta liation as a re sult of making the repor t. The g rava

men of its plea to
4the jurisdiction is its asser tion that Smit h did not meet h er b urden as to the third element of her Whis tleblower cause of action, i.e., that she made h er re port to an “appr opriate law enfor ceme nt authority ,” as tha t term is defined in the A ct.

The Act provides that a repor t is mad e t o an “appr opriate law enfor ceme nt authority

. . . if the authority is pa rt of a state or

local g overnme nt e ntity or the fede ral g overnme nt that the employ ee in g ood faith b el i ev es is authorized to: (1) reg ulate under or enfor ce the law alleg ed to be violated in the repor t; or (2) investiga te or prosec ute a violation of criminal law.” Id

. § 554.002(b). “[A]n appropr iate law-e nforc ement autho ri t y m u s t be actua lly responsible for
reg ulating under or enfor cing the l aw alleg edly violated. I t is not simply an entity responsible for ensuring internal compliance with the law alleg edly violated.” University of Tex

. Sw. M ed. Ctr. v. Gentilello , 398 S.W .3d 680, 685 (Tex. 2013). The Act does not protec t repor ts made to supervisors with power only to overse e internal compliance within an entity

. See Texas Dep’ t of Human Servs.

v. Okoli , 440 S.W .3d 611, 615-16 (Tex. 2014). Such repor ts are not protec ted even if the supervisors

are obliga ted to forwa

rd complaints to another depar tment that does have outward- looking authority
t o re g ulate under or enfor ce the law alleg ed to be violated or to investiga te or prosec ute crimi n al violations ag ainst third parties. Id.

To satisfy the require ment that a repor t be made to an “appr opriate law enfor ceme nt authority ,” a pla intiff seeking protec tion under the Ac t must prove either tha t the repor t was made
to an appropr iate law enfor ceme nt authority or that the employ ee had a g ood-fa ith belief that it was. Id. at 614. “An employ ee’ s belief is in g ood fait h i f: (1) the employ ee believed the g overnme ntal entity qualified, and (2) the employ ee’ s belief was rea sonable in light of the employ ee’ s training and

5experience .” Id. (citing Texas Dep’ t of Transp. v. Needham , 82 S.W .3d 314, 321 (Tex. 2002)). The

“sec ond element is a

n objective one,” and the employ ee only rec eives prote ction under the Act “if

a rea s o n ab l y prudent employ ee in simil ar circ umstances would have believed the g overnme ntal entity to w hich he repor

ted a violation of law was an appropr iate law-e nforc ement authority .” Id. ;

see also Texas Comm’n on Envtl. Quality v. Resende z , 450 S.W .3d 520, 522 (Tex. 2014) ( explaining that cl ai m ant must satisfy both subjective and objective require ments); Gentilello , 398 S.W .3d at 689 (stating that Act “re stricts ‘law- enfor ceme nt authority ’ to its commonly understood meaning ”). The g ood-fa ith inquiry “turns on more than an employ ee’ s p er s o nal belief, howeve r strong ly felt

or sincere ly held.” Gentilello , 398 S.W .3d at 6 8 3 (c iting Needham , 82 S.W .3d at 321 (empha sis in orig inal)).

Did Sm ith R eport to an Appr opriate Law En force m ent Au thori ty? I n her live pleading s, Smit h alleg ed th at s h e made reports of the allege d violations of law to I nterna l Audits an d L eg al Affa irs, but she does not alleg e specific fac ts that meet her burden of demonstrating that she had a g ood faith belief that either I nterna l Audits or L eg al Affa irs

wer e “appropria te l aw en fo rcement authorities.” See Cit y of Elsa , 325 SW .3d at 625 (conc lusory pleading s do not provide sufficient j urisdictional fac ts to determine if tr ial court ha d jurisdiction). We lo o k , th e n , to a

n y e v id e n c e th a

t w o u ld s u p p o r t th is r e q u ir e d ju r is d ic ti o n a l f

a c t. S e e id

. ( c o n s id e r in g whether there was evidenc e that would establish exis tence of require d jurisdictional fac ts). Smit h’s
response to the University ’s plea to the jurisd i ct i o n re fe rre d the trial court to her deposition testimony

. I n that testimony , Smit h acknow ledg ed that she knew that the function of I nterna l Audits was limited to internal compliance issues. Smi th testified to the following :
6Q: What was [I nterna l Affa irs’] function at U.T.—Austin?

A: I t’s to ensure that U.T. depar tments w ere comply ing with The University of Texas at Austin, U.T. Sy stem, and the law, any other law appli cable , to ensure that they wer e in c ompliance with those laws—and to take actions if the law—law

reg ulations were not in compliance. Q: What ty

pe of a ction do y ou believe [I nterna l Audits] could take? A: I believe that they could terminate employ ment. I t’s one of them. I believe that i f the violation was applicable , they would—move forwa rd to other enfor ceme nt ag encie s, and I believe tha t they

had the a uthority to enforc e.

Smit h further testified t hat she believed that I nterna l Audits could ensure only that University employ ees, and “not outsiders,” wer e in compliance with applicable rul es , re gu l ations, and laws. Smit h also stated that she believed I nterna l Audits “ma d e t he law for U.T., and if the law g oes bey ond the U.T. boundarie s, they would take a ct i o n s ” b y wh ich s he meant that they would repor t violations of the law to “other g overnme nt ag ents, the law e nforc ement ag ents.” I n response to inter

rog atories propounded by the Univer sity

reg arding her repor

t of bank fra ud to I nterna l Audits, Smit h stated that she believed that I nterna l Audits “could investiga te

v i o l at i ons of the [] law, with corr esponding duties to forwa rd the fruits of such investiga tio n
to proper prosec utorial authorities. ” I n her deposition testimony , Smit h confirme d her belief that
I nterna l Audits was limit ed to investiga ting issues rela ted to the University and that it did not have the authority to interfe re with the activities of other State ag encie s. She testified that, althoug h she did not know whether I nterna l Audits had the authorit y t o p ro s ec u t e any one for bank fra ud, she believed that if it discovere d such conduct it would “move forwa rd” and repor

t it to other authorities. Wit h respe ct to the transfers o f m o ney betwee n ag encie s she alleg ed to be in violation of the

7Gover

nment Code, Smit h’s interrog atory response s stated that she believed that I nterna l Audits and
L eg al Affa irs wer e authorized to “re g ulate under and enfor ce ag ainst violations of Gover nment Code Section 771.004 by U.T. employ ees,” investiga te any such violations and “pass the fruits of such investiga tion to appropr iate prosec utorial authorities.” Smit h’s deposition testimony was consistent with he r interrog atory response . Smit h also testified that the basis for her belief that L eg al Affa irs

was a law enfor ceme nt authority was simply that they wer e the University ’s lawy ers and b ec au s e I nterna l Audits asked L eg al Aff airs to par ticipate in the investig ation. Even if Smit h’s t estimony wer e sufficient to meet the subjec tive component of he r require d go o d fa ith belief that either I nterna l Audits or L eg al Affa irs was an “appr opriate law enfor ceme nt authority ,” we must also consider whether such a belief is rea sonable g iven Smit h’s training and experience

. See, e.g. , Gentilell o , 3 9 8 S.W .3d at 683 (eve n if employ ee “honestly believed” she repor

ted to appropr iate authority , belief can only satisfy g ood fait h re q uirement “if

a re as o n ab l y prudent employ ee in simil ar circ umstances” would have thought so). I n Gentilello , the Texas Supreme Court explained what constitutes an appropr iate law enfor ceme nt authority under the Act:

The upshot of our prior decisions is that for an entity to constitute an appropr iate lawenfor ceme nt a

uthority under the Act, it must have authority to e nforc e, investiga te, or prosecute violations of law ag ainst third parties outside of the entity itself, or it must h ave authority to promulg ate reg ulations g overning the conduct of such third parties. Authority of the entity to enfor ce leg al require ments or reg ulate conduct within the entity i tself is insufficient to confe r law-e nforc ement status. I ndeed, holding otherwise would transfor m e very g overnme ntal entity that is subject to a ny reg ulation or that conducts internal investiga tions or imposes internal discipline into law enfor ceme nt authorities under the Act. Such a result would collide head- on with the Act’ s limi ted def

inition and our case s interpre ting that de finition.

8Id. at 686; see also Okoli , 440 S.W .3d at 616 (re aff irming that internal repor

t of wrong doing does not trig g er Act’s protec tion unless it is made direc tly to authority with outward- looking law enfor ceme nt
power ). I n Gentilello the court emphasized that the Act’s restric tive definition of “appr opriate law enfor ceme nt authority ” is “tig htly draw n” and cente rs on law enfor ceme nt, not law compliance

. See Gentilello , 398 S.W .3d at 689; see also Texas A & M Univ.–Kingsville v. Moreno , 399 S.W .3d 128, 130 (Tex. 2013). Corresponding ly , “a whistleblower cannot rea sonably believe his supervisor is

an appropr iate law-e nforc ement authority if the supervisor’ s power extends no further than ensuring the g overnme ntal body itself complies with the law.” See Gentilello , 398 S.W .3d at 689 (empha sis in orig inal). The rec ord fails to demonstrate that either I nterna l Audits or L eg al Affa irs possessed the requisite outward- looking authority to constitute an “appr o p ri at e law enfor ceme nt authority ” under the Act, and Smit h acknow ledg ed as much i n her deposition. I n s tead, she testified t hat s he believed that I nterna l Audits and L eg al Affa irs could forwa rd her repor

t to the authorities that could
prosec ute or enfor ce the alleg ed violations. But even when an ag ency ’s policy is to forwa rd repor ts
to the ag ency ’s enfor ceme nt arm, “re ports up a chain of command” are not sufficie nt under the Act. See Resende

z , 450 S.W .3d at 522 (c iting Okoli , 440 S.W .3d at 614 (collec ting cases) ). “When an employ ee repor

ts wrong doing internally with the knowledg e that the repor t w il l have to be forwa

rded elsewhe re . . . , t h en t he employ ee is not repor ting ‘ to an appropriate law enforce ment authority .’” Okoli , 440 S.W .3d at 615 (empha sis in orig inal). “Alt h o u gh s u ch a policy permits employ ees to

rea sonably believe repor

ts w ill be sent to a

n appropr iate law-e nforc ement authority , it pr ovides no

rea son to believe the r eporte d-to supervisors are appropr iate author ities.” Office of the Att’y G en.

9v. W

ea t h erspoon , ___ S.W .3d ___, No. 14-0582, 2015 WL 5458683, at *2 (Tex. Sept. 18, 2015) (empha sis in orig inal). We do not believe that a reasonable employ ee in circ umstances sim ilar t o Smit h’s would have believed that I nterna l Audits or L eg al Affa irs was an appropr iate law enfor ceme nt authority

. See Gentilello , 398 S.W .3d at 682 (noti n g Ac t’s require ment that repor t be made to one with “fr ee- standing reg ulatory , enfor ceme nt, or crime- fig hting a uthority ”). On appea l, Smit h relies principally on her arg ument that beca use I nterna l Audits and
L eg al Affa irs are part of the University of Texas Sy stem, and beca use t h e Un i v ersity of Texas Sy stem also has as one of its components the University of Tex as Police Depa rtment, I nterna l Audits and L eg al Affa irs are “par t of a state or local g overnme ntal entity ” authorized to investiga te

or prosec ute a violation of criminal law. See Tex. Gov’t Code § 554.002(b)( 2) (“a ppropriate law enfor ceme nt authority ” i ncludes authority that is part of state or local g overnme ntal entity that employ ee in g ood faith believes is authorized to in v es t i gat e or prosec ute violation of criminal law). The supreme c ourt has rec ently reje cted a simil ar arg ument made by the employ ee in Office of the Attorn ey Ge n er a l v. W eatherspoon

. 2015 WL 5458683, at *3. I n W eatherspoon , Ging er Weatherspoon, who worke d as an assistant attorney gen er al i n the Child Support Division of the Offic e of the Att orney Gene ral, claimed to have ha d her employ ment terminated as a result of her
repor ting alleg ed violations of criminal law by two senior attorney s to her manag ing attorney , to the Child Support Direc tor and the Deputy Direc t or of Child Support, and to an attorney in the Open Records Depa

rtment. See id. at *1. Weather spoon arg ued that bec ause the Offic e of the Attorney Gene ral has an Ethics Advisor, a Criminal I n v estig ation Division, and statutory authority to
prosec ute cer

tain crimes, the Offic e of the Attorney General had the requisite outward- looking

10authority such that her repor ts wer e made to an “appr opriate law enfor ceme nt authority .” Id. at *3. The sup reme court held that this arg ument failed beca

use “the authority of some OAG divisions
to investiga te or prosec ute crime does not transfor m the entire OAG into an ap p ro p ri ate lawe n f o r c e me n t a

u th o r it y . ” I d

. T h e c o u r t s ta te d th a t: “ A n e n ti r e a g e n c y d o e s n o t b e c o me a n a p p r o p r ia te law-e nforc ement authority mere ly beca us e s o m e divisions have such power .” Id. Guided by this
supreme court prec edent, we conclude that th e ex istence of the University of Texas Police Depa rtment within the University of Texas Sy stem does not make I nterna l Audits or L eg al Affa irs “appr opriate la

w enf orce ment authorities” unde r the Ac t.

CONCLUSION Be cause Smit h cannot establish that her actions satisfy the Act’s require ment t h at she have made a repor

t to an “appr opriate law enfor ceme nt authority ,” as that term i s define d in the Act, the University rema ins immune from this suit. Acc ording ly , we reve rse the t ri al co u rt ’s order deny ing the University ’s plea to the jur isdiction, gra nt the plea, a

nd dismiss Smit h’s suit for lack of subject-matter

jurisdiction.

_

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Scott K. Field, Just ice Be fore J ustices Pury ear , Pemberton, and F ield Reverse d and Dismissed Filed: Nove mber 25, 2015

11