### 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. 03-13-00303- CV

Texas Health and Human Servic es Com m ission and Kyle L. Janek, su bstituted in h is off icial capacity for form er C om m ission er Thom as M. Suehs, App ellants

v. F . Michael Mc Millen, Appellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 261 ST JUDICI AL DISTRICT NO. D-1 -GN-1 2-0 0200 4, H ONO RAB LE ERIC SH EP P ERD, JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

I n this interlocutory appea l, appellants t h e T exas Hea lth and Human Service s Commi ssion (HHSC) and Ky le L

. J anek, HHSC’s Ex ecutive Commi ssioner, challeng e the trial court’s denial of their plea to the jurisdiction. See Tex. C i v . P ra c. & Rem. Code § 51.014(a) (8). Appellee F. Michae l McMillen, a former employ ee of HHSC, sued HHSC and J anek in his officia l
capa city alleg ing violations of the Texas Whis tleblower Act and the fre e speec h clause of the Texas Constit ution. See Tex. Const. art. I , § 8; Tex. Gov’t Code §§ 554.001–.010 (Whistl eblower Act). For the rea sons that follow, we reve rse the trial court’s order and dismiss McMillen’s claims for lack of jurisdiction.BACK GR OUND McMillen, an attorney with over t wenty y ear s of experience , was employ ed by HHSC’s Offic e of I nspector Gene ral (OI G) as Deput y C o u n s el from November 2009 until April 2012. He was place d on administrative leave at the beg inning of J anuar y 2012, and his employ

ment
was ter minated at the e nd of April 2012. McMillen sued appellants in J uly 2012 all egi ng whistleblower and fre e speec h violations. M cM i l l en contends that he was terminated and reta liated ag ainst beca use of a memorandum that he prepa red in June 2011. He prepa red the memorandum at the direc tion of his supervisor, Kare n Nels o n, who was OI G’s C hief Couns el. Nelson assigned McMillen the t ask of

rese arc hing w hether

there was leg al authority to suppor t or , conver sely , prohibit HHSC’s ongoing
prac tice of acc epting pay

ments from Medica id benef it rec ipients under a particula r prog ram. I n the

m emorandum, McMillen conclude d that he “[did] not find a leg al basis to justify HH S C / OIG’ s

curr ent prac tice of acc epting repa y ments” and rec omme n d ed t h at “HHSC/OI G cea se acc epting them. ” To support his conclusion, he cited a 1997 letter from the “U.S. Depa rtment of Health & 1
Human Service s/Center for Medica id and State Oper ations” to the “State Medica id Direc tor (of eac h state)” and a class action suit in California. Ne l son provided copies of the memorandum to OI G deputies in September 2011. McMil l en als o g ave a copy to OI G’s Deputy I nspector Gene ral of

The parties’ appellate briefs and exhibi ts submitt ed to the t ri al court under seal wer e 1 submitt ed under seal to this Court. Be cause McMillen prepa red the J une 2011 memorandum as an attorney employ ed by HHSC, HHSC has asserted the attorney -client privilege

. See Tex

. R

. Evid. 503 (lawy er- client privileg e); In re XL Specialty Ins. , 373 S.W .3d 46, 49 (Tex. 2012) (“Confide ntial communications betwee n client and counsel made to fac ilitate leg al service s are g ener ally insulated from disclosure .” (c itation omit ted)). 2I nterna l Affa irs and its I nspector Ge n er al in Dec ember 2011 and to HHSC’s Ex ecutive

Commi ssioner in J anuar

y 2012. OI G’s I nterna l Affa irs Division conducte d an investigation of McMillen’s alleg ations and conc luded that they wer e “unsubstantiate d.” Appellants filed a plea to the jurisdiction supported by the aff idavit of Nelson. They contende d that McMillen was terminated fo r p oor work perf ormanc e and that the J une 2011 memorandum was incomplete and failed to analy ze the leg al issues assig ned to him by Nelson. As
to McMillen’s whistleblower claim, appella n t s contende d that he had failed to invoke the trial court’s jurisdiction beca

use he had not alleg ed and could n o t al l ege a “g ood faith repor t” of a “violation of law” to an “appr opriate law enfor ceme nt authority .” See Tex. Gov’t Code § 554.002. As to his fre e speec h claim, appella n t s co n tended that McMillen had not alleg ed and could not “alleg e an e x erc ise of fr ee spe ech f or which he was the vic tim of retaliation.” McMillen filed a response with evidenc e, including an aff idavit by McMillen, excerpts from the depositions of Nelson and Dougl as W i l s o n , who was the I nspector Gene ral, discovery response s, and a copy of pleading s from t he California class action ref ere nced in the J une 2011 memorandum. I n that case , the p l aintiffs alleg ed that the California Depa rtment of 2
Hea lth Service s was violating the fede ral prohibition in section 1396p of Title 42 of the Uni ted States Code ag ainst the rec overy of Medica id benef its corr ectly paid. See 42 U.S.C. § 1396p(b)( 1). 3

I n her deposition, Nelson testified about OI G g ener ally , her supervision of McMillen 2 leading up to his termination, and the J une 2011 memorandum. She testified that, afte r she rec eived the memorandum from McMillen, she informed him that it was incomplete and asked him to addre ss additional issues but that he did not revise the memorandum. Wilson also testified about OI G, its I nterna l Affa irs Division, and McMillen’s alleg ations. Section 1396p(b)( 1) states: 3

3I n his aff idavit, McMillen aver

red about his employ

ment with OI G. He aver

red that he was no t t er m i n ated for poor work perf ormanc e but beca

use of the memorandum and “[his] additional repor

ts which offe nded [hi s] supervisors” and that he was not told that he was inadequa tely perf

orming his job dutie s b ef o re he made his “re port” in the memorandum. He 4 identified section 1396p of Title 42 of the United States Code as the law “in [hi s] g ood faith belief” that HHSC was violating “by improperly taking pay ment reimburse ments from Medica id rec ipients for proce dures validly and leg ally paid for by the fede ral g overnme nt.” He also cited state statutes
g overning HHSC to support his conclusion that “none of these [st ate] laws appea rs to allow HHSC
to acc ept re imbursements in the situation I was a sked to investigate.”

No adjustment or re cover y of any medical a ssistance c orre ctly paid on beha lf of an indiv i d u al u n d er the State plan may be made, except that the State shall seek adjustment or rec overy of any medical assistance corr ectly paid on behalf of an individual under the State plan in the case of the following individuals: [i napplicable exceptions]

. 42 U.S.C. § 1396p(b)(1). McMillen aver

red: 4
I was never told my j o b wa s in jeopar dy or that I was providing inadequa te leg al service s (or not doing my job in any materia l sense) until afte r my repor ts wer e made and afte r the defe ndants “nee ded” a rea son to terminate my employ ment. I was doing my job to the best of my ability and was never told that I had any serious defic iencies or that my job was in jeopar dy until afte r I made my repor t and afte r I beg an ag itating for it to be taken up the chain, proper ly investigated, and the prac tices that I believed to be illeg al (a

nd still believe are illega l) stopped. . . .
I t wa s , I believe, my not “letting this g o” and making my repor t up the chain, including to the I nspector Gene ral, the I AD, and the Commi ssioner himself that “g ot me fire d.”

4After a hear ing, the trial court d en i ed ap p el lants’ plea to the jurisdiction. This

appea l followed.

ANALYSIS

Appellants raises three issues. They contend that the trial court err ed by asser ting subject matter jurisdiction over McMillen’s whistleblower claim “bec ause the p leading s and evidenc e, taken as true did not establish the minimum jurisdictional r equisites,” that the trial court erred b y asser

ting subject matter jurisdiction over McMillen’s fre e speec h claim “bec ause the pleading s, taken as true, did not e stablish the minim um jur isdictional r equisites,” and that the trial
court err ed by assuming jurisdiction on the basis of att o rn ey -client privileg ed evidenc e over the client’s objec tions.

Stand ard of Review

We revie w a plea questioning t he trial court’s subject matter jurisdi ction de n ovo. See Texas Dep’ t ofParks & W ildlif e v. Miranda , 133 S.W .3d 217, 226 (Tex. 2004). We focus first

o n t h e p laintiff’s petiti on to deter mine whether the facts that wer e pled aff irmatively demonstra t e
t hat subject matter jurisdiction exis ts. Id

. We construe the pleading s liberally in fa v o r o f t h e plaintiff. Id

. I f a plea to the jurisdiction challeng es the exis tence of jurisdictional fac ts, the trial
court m ay consider evidenc e and must do so when nece ssary to resolve the jurisdictional issues raised. Id . at 227 (c iting Bland Indep. Sc h. Dist. v. Blue , 34 S.W .3d 547, 555 (Tex. 2000)).

5Whistleblow er C laim I n their fi rst issue, appellants contend that the trial court err ed by asser ting subject
matter jurisdiction over McMillen’s whistleblower claim “ b e c a u s e th e p le ading s and evidenc e, taken

as true, did not establish the minimum jurisdictional r equisites.” Gene rally , g overnme ntal entities

are immune from suit and liability under the doctrine of sovere i gn i m m u n i t y . State v. Lueck , 290 S.W .3d 876, 880 (Tex. 2009). Although the Whis tleblower Act waives immunit y from suit to the extent a g overnme ntal entity is liable under its provisions, see Tex. Gov’t Code § 554.0035, the claimant “must actua lly alleg e a violation of the Act for t h er e to be a waiver from suit.” Lueck , 290 S.W .3d at 881. T h e elements of a whistleblower claim “ar e jurisdictional and may not be waived.” University of Houston v. Barth , 403 S.W .3d 851, 853 (Tex. 2013) (per curia m). “The standard for a ‘violation o f [ the Whis tleblower Act]’ appea rs in section 554.002(a) .” Lueck , 290 S.W .3d at 881. Section 55 4

. 0 0 2 (a ) p rovides that a g overnme ntal entity “may not suspend or terminate the employ ment of, or take adver se personne l action ag ainst, a public employ ee who in g ood faith repor ts a violation of law by the employ ing g overnme ntal entity or another public empl o y ee t o an appropr iate law enfor ceme nt authority .” Tex. Gov’t Code § 554.002(a)

. Section 554.002(b) descr ibes when “a report i s m ad e to an appropr iate law enfor ceme nt authority ,” providing :
(b) I n this section, a repor t is made to an appropr iate law enfor ceme nt authority if the authority is a part of a state or local g overnme ntal en t i t y or of the fede ral g overnme nt that the employ ee in g ood faith believes is authorized to: (1) reg ulate under or enfor ce the law alleg ed to be violated in the repor t; or

6(2) investigate or prose cute a violation of criminal law.

Id. § 554.002(b). F or purpose s of this appea l, a “law ” mea ns “a state or federa l statute” or “ a rule ad o pted under a statute.” Id

. § 554.001(1). Whether the rec ipient of the alleg ati o n s i s “a n appropr iate law enfor ceme nt authority ” under the Whis tleblower Act is a question of law

. T exas Dep’ t of Tr ansp. v. Needham , 82 S.W .3d 314, 318 (Tex. 2002).

An employ ee who did not repor t to an “appr opriate law enfor ceme nt authority ” may sti ll have a viable whistleblower claim if he believed in g ood faith that he was repor ting to an “appr opriate law enfor ceme nt a uthority .” See Tex. Gov’ t Code § 554.002(b). For an employ ee to satisfy the g ood faith require ment, he must have actua lly believed that the rec ipient of the repor t was

an “appr opriate law enfor ceme nt authority ” and his belief must have been “re asonable in light of the employ ee’ s training and experience .” Needham , 82 S.W

. 3 d at 321. To satisfy the objective component of the g ood faith require ment, a claimant is entitled to protec tion “if a rea sonably prudent employ ee in similar cir cumstance s” would have held the cla imant’s belief. Id . at 320.

Her e, it is undisputed that McMillen was a “public employ ee,” that McMillen alleg ed
t h at the “violation of law” was by HHSC—the “employing g overnme ntal entity ”—and t h at HHSC—and not its Commi ssioner—is the proper party for McMillen’s Whis tleblower claim under section 554.002. See Tex. Gov’t C ode §§ 554.001(4)–( 5) (defining “public employ ee” and “state
g overnme ntal entity ”), .002(a)

. The parties join issue with whether McMillen established t h e elements of “a violation of law,” a repor t to an “appr opriate law enfor ceme nt authority ,” and a “g ood faith” be lief. See id. § 554.002. Be cause they are dispositi ve, we limit our ana ly sis to appellants’
arg uments that McMillen “did not repor t to any appropr iate law enfor ceme nt authority and he could

7not have rea sonably believed that he did.” See Tex. R. App. P

. 47.1 (appe llate courts “must hand

down a written opinion that is as brief as prac ti cable but that addre sses ever y issue raised and

nece ssary to final dispositi on of the a ppeal” ). “[C] ritical to the deter

mination” of whether the rec ipient of a repor t is an appropr iate law enfor ceme nt authority is the “par ticular law the public employ ee repor ted violated.” Needham , 82 S.W .3d at 320. As a threshold matter then, we must deter mine the “par

ticular law” that McMillen
repor ted HHSC violated. See id. Although the Whis tleblower A ct does not require the employ ee
to “identify a specific law when maki n g a re port,” there must be “some law prohibiting the complained- of conduct to g ive rise to a whi s t l eblower claim.” Texas Dep’ t of Criminal Justice v. Mc Elyea , 239 S.W .3d 842, 850 (Tex. App.—Austin 2007, pet. denied).
I n the J une 2011 memorandum, McMi ll e n d id n o t ide ntify any law that he alleg ed was being violated, but he cited to the class action li tiga tion in C al i fo rn i a and a letter from the Unit ed States Depa

rtment of Hea lth and Human Service s. McMillen’s quoted excerpt from the letter, howeve r, did not include a ref ere nce to le g al authority

. As to the California c lass action, althoug h he did not identify the l aw in the m emora ndum, the l aw at issue in that case w as sec tion 1396p of Title 42 of t he United States Code, a fe d eral civil Medica id law. I n his aff idavit in support of hi s response to the plea to the jurisdiction, McMillen also identified two sections of the Texas H uman Resource s Code and the Gene ral Appropria tions Act for the 2012-13 Bie nnium. See Tex. Hum. Res. Code §§ 32.039 (addr essing damag es and penalties that HHSC may assess ag ainst appl i ca n t s fo r pay ment of health car e service s), .064 (addr essing cost sharing provisions for rec ipients of medical assistance ); 82d Tex. L eg . R.S. (2011), at 211, para . 17. He aver red that “none of these [st ate] laws

8appea

rs to allow HHSC to acc ept re imbursements in the situation I was a sked to investiga te.” On
appea l, McMillen arg ues that acc epting pay m en t s u n d er the prog ram violated HHSC’s statutory authority “bec ause it is only authorized to acc ept items such as ‘dama g es and p enalties’ for fra udulent medical claims and collecting and appropr ia ti n g c o s t sharing cer

tain Medica id reve nues.” See Public Uti l

. C o mm ’n o f T ex. v. C ity Pub. Serv. Bd. , 53 S.W .3d 310, 315 (Tex. 2001) (noting “basic rule” that “a state administrative ag ency has only those power s that the L eg islature expressly confe rs upon it”).

The Gene ral Appropria t i o n s Act, howeve r, is not a “law” that prohibited the complained- of conduct to g ive rise to a whistleblower claim. See Tex. Gov’t Code § 554.001(1) (def ining “law” to mean “state or fede ral s t atute,” “ordina nce of a local g overnme ntal entity ,” or “rule adopted under a statute or ordinanc e”) ; McEly ea , 239 S.W .3d at 850 (re quiring “s o me law prohibiting the complained- of conduct to g ive rise to a whistleblower claim”)

. Parag raph 17 of the Gene ral Appr opriations Act for the 2012–13 B iennium states:

The Hea lth and Human Service s Commi ssion is authorized to c ollect and is here by appropr iated all cost sharing reve nues gene rated by Medica id clients as authoriz ed in Section 32.064 of the Human Resource s Code. These reve nues may include enroll m en t fees, deductibles, coinsuranc e, and portions of the manag ed car e plan premiums.

Simi larly , the sections from the Human Resource s Code—examples o f H H SC ’ s a u th ority to monitor and re g ulate the provision of hea lth and human servic es in the state of Texas—do not prohibit t he conduct that McMillen addre ssed in the J une 2011 memorandum, HHSC’s acc eptanc e of pay ments under a particula r prog ram.

9McMillen also has not alleg ed or identified a violation of criminal law by HHSC. See

Mullins v. Dallas Indep. Sch. Dist. , 357 S.W .3d 182, 189 (Tex. App.—Dallas 2012, pet. denied) (“Investig atory power may make a g overnme ntal entity an appropr iate law enfor ceme nt authority for purposes of the act only if the pl aintiff has repor ted a violation of criminal law. .

. . Fur thermore , the criminal conduct repor ted must be within the investigatory power s of the authority rec eiving the plaint i ff ’s report or the plaintiff must have a g ood faith belief that the conduct was within the investiga tory power s of the authority to which he repor ted.”) ; see also Needham , 82 S.W .3d at 320 (ana ly zing section 554.002(b)( 2) to deter mine whether the ag ency had authority to prosec ute the particula r criminal violation being repor ted). Thus, we conclude that the only possible law that McMillen re p o rt ed t h at HHSC was violating was a fede ral civil Medica id law. See Needham , 82 S.W .3d at 320.

The issue then become s whether the rec ipients o f McMillen’s memorandum—his supervisor and other HHSC em ploy ees highe r up the chain of command—we re authorized to “re g ulate under

or enf orce ” this fede ral law

. SeeTex. Gov’t Code § 554.002(b)(1) . We conclude that they wer e not. As the Texas Supreme Court rec ently re co gn i zed, “only the United States Secre tary of Hea lth and Human Service s (HHS Secre tary ) can ‘re g ulate under’ or ‘enf orce ’ Medica re/Medic aid rules.” University of Tex. Sw. Med. Ctr. at Dallas v. Gentilello , 398 S.W .3d 680, 685 (Tex. 2013); see id

. (noting that “42 U.S.C. § 1395hh(a) vests sole power in the HHS Secre tary to promulgate and e nforc e the Me dicar e/Medica id rules”)

.

Fu rt h er , the supreme court has explained that the “re strictive definition of ‘appr opriate law enfor ceme nt authority ’ require s that t h e repor ted-to entity be char g ed with more

10than mere internal adher ence to the l aw al l ege dly violated.” Texas A& M Univ.–Kingsville

v. Moreno , 399 S.W .3d 128, 129 (Tex. 2013) (per curia m); see Ge n tilello , 398 S.W .3d at 686 (“A uthority of the entity to enfor ce leg al require ments or reg ulate conduct within the entity itself is i n sufficie nt to confe r law-e nforc ement authority status.”). The rec ipient of the repor t must h av e

au t h o ri ty over third parties as to the law alleg ed to be violated and that authority must b e “fr ee- standing reg

ulatory , enfor ceme nt, or crime- fig hting authority .” Gentilello , 398 S.W .3d at 682, 686; see Canutil lo Indep. Sch. Dist. v. Farran , 409 S.W .3d 653, 654, 657 (Tex. 2013) (holding trial court prope rly

g rante d plea to jurisdiction as to whistleblower cla im and concluding “no evide nce that [reported-to] officia ls had authority to enfor ce the alleg edly v i o l ated laws outside of the instit ution itself, ag ainst third parties g ener ally ”); Moreno , 399 S.W .3d at 1 3 0 (e x plaining that

rec ipient of repor

t must have authority

“‘to e nforc e the law

that was a lleg edly

violated . . . ag ainst third parties g ener ally ’” ( quoting Gentilello , 398 S.W .3d at 686)). Guided by the supreme court’s analy sis, we conclude that the rec ipients of McMillen’s complaint—HHSC employ ees with internal author i ty to comply with the fede ral civil Medica id law—we re not appropr iate law enfor ceme nt authorities as a matter of law. See Gentilello , 398 S.W .3d at 686; see also Needham , 82 S.W .3d at 318 (dete rmining w hether appropr iate law e nforc ement author ity as matter of

law). We turn then to whether McMillen’s pleadings and evidenc e, taken as true, established t h at h e had a g ood faith belief that he repor ted the alleg ed fede ral civil Medica id law

v i o l at i on to an appropr iate law enfor ceme nt authority

. McMillen urg es that he had a g oo d fa i t h belief that he was rea ching out to an appropr iate law enfor ceme nt authority beca use, as an employ ee, he saw OI G and its I nterna l Affa irs Division in a ction. To support his g ood faith belief, McMillen

11points to OI G’s reg ulations, the websites of OI G and the I nterna l Affa irs Division, and the I nterna l

Affa irs Division’s decision to inve stiga te his a lleg ations and to de signate materia ls c onfidential as p ar t of the investigation. See Tex. Gov’t Code § 531.1021 (providing materia ls to be desig nat ed confide ntial); see also id. § 531.102 (desc ribing responsibilities of OI G to include “investig ation of fra ud, waste, an d abuse in the provisi on and delivery of all health and human s ervic es i n the s tate

. . . and the enfor ceme nt of state law rela ting to t h e p ro v i s ion of those service s”); 1 Tex. Admin. Code §§ 371.11 (Off

ice of I nspector Gene ral, Purpose and Scope) (desc ribing purpose and scope of OI G), .1603 (de scribing OI G’s re sponsibili ties and administrative e nforc ement author ity ). Consist ent with the applicable reg ulations, the websites descr ibe th e f u n c ti o n s o f O I G and the I nterna l Af

fa i rs Division to include investigating complaints that “alleg e violations of criminal law,” “complaints involving misconduct by ag ency employ ees,” and complaints involving “re taliation ag ainst emp l o y ees under the Whis tleblower Act.” OI G states on its website that it is authorized to “take enfor ceme nt action,” incl u d i n g issuing sanctions, “ag ainst providers and

rec ipients.” The I nterna l Affa irs Division states o n i t s we b site that it “per forms investiga tion

acc ountability

of hea lth and human servic es re source s, prog rams, employ ees, a nd contra ctors.” The investigative and enfor ceme nt authority of OI G and the I nterna l Affa irs Division
ag ainst third parties, howeve r, as to the “provision and delivery ” of health service s in the state and the “enf orce ment of state law rela ting to the provision of those service s,” do not support McMillen’s
g ood faith belief as t o t h e law at issue, a fede ral law. See Tex. Gov’t Code §§ 531.1011(10) (def ining “provide r”) , .102(a) ; Gentilello , 398 S.W .3d at 685 (noting that “ all g overnme ntal bodies
must themselves adher e to various statutes and reg ulations, but such compliance does not equate to

12the authority to ‘re g ulate under or enforce ’ t hose provisi ons” and that “Whistl eblower Act speaks

to an authority statutorily empow e r e d to reg ulate under or enfor ce the actua l law alleg edly violated”) ;

see also Barth , 403 S.W .3d at 857 (noting that claimant must have “objec tive g ood-fa ith belief that he was repor

ting violations of law

. . . t o an entity that could have enfor ced, investigated, or prosec uted s imilar violations ag ainst third parties—not jus t an entity that can inter nally discipline its own employ ees for an alleg ed violation”); Moreno , 399 S.W .3d at 130 (“‘ A whistleblower cannot

rea sonably believe his supervisor is an appropr i at e law enfor ceme nt authority if the supervisor’ s power extends no further than ensuring the g overnme ntal body i t s el f compl ies with the law.’” (quoting Gentilello , 398 S.W .3d at 689)); Gentilello , 398 S.W .3d at 687 (re aff irming that “lodg ing

an internal complaint t o an authorit y whom one understands to be only char g ed with internal compliance , even including investigating and punishing noncompliance , is jurisdictionally insufficient under the Whis tleblower Act”) ; City of Elsa v. Gonzalez , 325 S.W .3d 622, 628 (Tex. 2010) (per curiam) (noting t hat plaintiff “f ailed to addr ess or point to evidenc e that he had a good faith b el i ef t h at the city council had authority under the Open Meeting s Act to reg ulate, enfor ce, prosec ute, or investigate its own alleg ed violation of the Act apar t from its inhere nt authority t o simply decide not to meet,” noting that “being require d to comply with the Open Meeting s Act does
not equate to having authority to ‘re g ulate under or enfor ce’ those provisions as t o itself,” and holding that city council was not appropr iate law enfor ceme nt authority ). We also decline to place signific ance on the internal investigation conducte d by the I nterna l Affa irs Divisio n a s to M c M il le n ’ s alleg ations. See Gentilello , 398 S.W .3d at 688 (conc luding “stock anti-re taliation poli ci es ” as to

re p o rt by employ ee of compliance problems with Medica re/Medic aid laws ref

lected university ’s

13“commitment to intern al co m p l iance ” and that university “would abide by all direc tives from the

fede ral g overnme nt conce rning Medica re/Medic aid laws, nothing more” ). McMillen focuse s on the absenc e of the phrase “alleg ed to be violated in the repor t” in subsection (b)( 2 ) o f s ec t i o n 554.002 of the Whis tleblower Act to support his position that the authority of OI G and the I nterna l Affa irs Division to investigate and prosec ute violations of criminal law independently place s them wit hin the s tatutory definition of an “appr opriate law enfor ceme nt authority .” See Tex. Gov’t Code § 554.002(b)(2) . But, a s noted above , McMillen has not a lleg ed

a violation of criminal law. See Needham , 82 S.W .3d at 320; Mullins , 357 S.W .3d at 189. We also decline to adopt McMillen’s inter p r e ta ti o n o f s u b s e c ti o n (b)( 2) that would make ever y administrative
ag ency that has authority to invest i gat e and prosec ute a criminal offe nse an “appr opriate law enfor ceme nt authority ” under the W histleblower Act reg ardle ss of the law a lleg ed to be viol ated. See Needham , 82 S.W .3d at 319 (“U nder the statutory d ef i n i t i on, it is clea

rly not enoug h that a g overnme ntal entity has general authority to reg ulate, enfor ce, investiga te, or prosec ute.”) ; Mullins , 357 S.W .3d at 190 (conc luding that investigative authority that included coordina ted activities with fede ral law enfor ceme nt ag encie s not “broa d enough t o include the power to investigate alleg ed criminal violations of fede ral e nvironmental laws” ).

Given McMillen’s training as an attorney with ove r twenty y ear s of experience , we conclude that he failed to establish that he had an objectively rea sonable belief that a rec ipient of his alleg ed repor

ts was an “a p p ropriate law enfor ceme nt authority .” See Barth , 403 S.W .3d at 858 (holding that plaintiff failed to meet “objec tive component of the g ood-fa ith test” “g iven [pl aintiff]’s leg al training and experience as a prac ticing attorney ”); Gentilello , 398 S.W .3d at 689 (conc luding

14that “a whistleblower cannot reasonably believe his supervisor is an appropriate law-e nforc ement

authority if the supervisor’ s po we r extends no further than ensuring the g overnme ntal body itself complies with the law”)

. A “re asonably prudent em p l o y ee in simil ar circ umstances” to McMi l l en would not have believed that the repor ted-to individuals wer e appropr iate law enfor ceme nt aut h o ri t i es as to an alleg ed violation of fede ral civil Medica id law. See Needham , 82 S.W .3d at 320; see also Nieto v. Permian Basin Cmty

. Ctrs

. for MHMR , No. 11-13-00012- CV, 2014 Tex. App. L EXI S 1003, at *11 (Tex. App.—Eastland J an. 30, 2014, no pet.) (mem. op.) (“We
cannot c onclude that a 29-y ear -old with a n underg raduate deg ree would believe tha t the executive direc tor or the compliance office r at PBCC reg ulated or enfor ced Medica id/Medicare rules outside of PBCC.”). Thus, we conclude that the trial court err ed by denying appellants’ plea to the jurisdiction as to McMillen’s Whi stleblower c laim and sustain their first issue. 5

To support his position that he repor ted to an appropr iate law enfor ceme nt authority , 5 McMillen cites City of Houston v. Levingston , 221 S.W .3d 204 (Tex. Ap p . — Hous ton [1st Dist.] 2006, no pet.), and Texas Departme nt of Human Servic es v. Okoli , 3 1 7 S

. W

. 3d 800 (Tex. App.—Houston [1st Dist.] 2010), rev’ d , 440 S.W .3d 611 (Tex. 2014). The supreme court reve rsed the decision of t h e court of appea ls in Okoli , concluding that the employ ee “neither repor ted the alleg ed violations he witnessed to an appropr iate law enfor ceme nt authority nor in g ood faith could have believed he had.” 440 S.W .3d at 617. Thus, that case is not helpful to McMillen. Fur ther, in contra st with McMillen’s alleg ations, the plaintiff in Levingston alleg ed violations of criminal laws and the repor

ted-to g overnme ntal entity was ch ar g ed with enfor cing the laws at issue. See Levingston , 221 S.W .3d at 219, 221–24 (re ports included violations of criminal law and evidenc e that city depar

tment char g ed with investigating or enfor cing laws at i s s u e)

. T h e case cited by McMillen in a post-submissi on letter brief simil arly conce rned alleg ations of criminal law repor ted within a division of the Of fi ce of the Attorney Gene ral. See Office of the Attorney Gen. v. W eatherspoon , 435 S.W .3d 844, 851 (Tex. App.—Dallas 2014, pet. filed) (r eport of criminal conduct within OAG was to appropr iate law enfor ceme nt authority ). Thus, we fi n d t h o s e case s fac tually distinguishable a

nd McMillen’s re liance on the m mispl ace d.

15F ree Speech Claim I n their second issue, appellants contend that the trial court err ed by asser ting subject
matter jurisdiction over McMillen’s Texas Constit utional fre e speec h claim “bec ause the pleading s, taken as true, did not establish the minimum jurisdictional requisites.” They contend that they are immune from suit as to McMillen’s fre e speec h claim beca use artic l e I , s ec t ion 8 of the Texas Constit ution does not cre ate a private rig ht of action for damag es. McMillen ag ree s that he cannot

asser t a private action for damag es under his fre e speec h claim. See Tex. Const. art. I , § 8; Beaumont v. Bouillion , 896 S.W .2d 143, 147–49 (Tex. 1999) (holding no private rig ht of action for damag es arising under free speec h section of Texas Constit ution). He also s t ates that the proper defendant for his fr ee spe ech c laim is the Commi ssioner, in his officia l c apac ity , and not H HSC. See City of El Paso v. Heinrich , 2 8 4 S

. W.3d 366, 373 (Tex. 2009). Wit hin these confine s, we addre ss appellants’ c halleng e to McMillen’s fr ee spe ech c laim.

The parties ag ree that the elements of a reta liation claim by a public employ ee based

on protec ted fr ee s p ee ch under article I , section 8 of t he Tex as C onstitut ion are : “(1) speec h by a p u blic employ ee involving a matter of public conce rn; (2) the employ ee’ s interest in commentin g

on a matter of public conce rn outweig hs the employ er’ s i n t er est in eff iciency ; (3) an adver se employ ment action; and (4) the speec h motivated the adver se employ ment action.” Nairn v. Kill een In dep
. S ch

. Dist ., 366 S.W .3d 229, 245 (Tex. App.—El Paso 2012, no pet.) (ele ments of Fir s t Amendment reta liation c laim); see Bentley v. Bunton , 94 S.W .3d 561, 579 (Tex. 2002) (ana ly zing Article I , section 8 claim pursuant to First Amendment jurisprudenc e under an assumption that the “conc erns a

re c ong ruent” absent a

ny arg ument otherwise)

.

16Be cause it is dispositi ve, we limit our analy sis to appellants’ arg ument that McMillen

did not establish the first element of his fre e speech claim. See Tex. R. App. P

. 4 7

. 1

. Appellants
arg ue that, to the extent McMillen seeks equitable relief , he was not speak i n g o u t on a matter of public conce rn beca

use his internal commu n i ca t i o n s subject to the attorney -client privileg e wer e made in his ca

pacity as a public e mploy ee a

nd not as a priva te citizen. We are informed by the Supreme Co u rt ’s analy sis in Garce tti v. Ceballos , 547 U.S. 41 0 , 4 18–21 (2006). I n that case , the Supreme Court held that an attorney who wrote a memorandum “pursua

nt to his officia l duties” was not speaking as a private citizen for fre e speec h
purposes and that “the Constit ution does not insulate [t his ty pe of] communications from employ er discipline.” Id

. at 421. The Supreme Court explained: “Restricting speec h that owes its exis tence
to a public employ ee’ s p ro fe s s ional responsibilities does not infring e any liberties the employ ee might have enjoy ed as a private citizen. I t simply ref lects the exercise of employ er control over what
t h e employ er itself has commissioned or cre ated.” Id

. at 421–22; see also Davis v. McKinney , 5 1 8 F.3d 304, 312–13 (5th Cir. 2008) (discussing “threshold lay er to previous analy sis” added by Garce tti that shifted focus “fr om the content of the speec h to the role the speake r occupie d when he said it”). McMillen urg es that, althoug h his stat em en t s in his memorandum may not be protec ted speec h beca

use he prepa

red the memorandum as part of his job duties, his job duties did
not include his “subseque nt” repor ts to “hig her and highe r levels.” But McMillen ’s “s p eec h” direc ted internally owed its e x istence to his profe ssional r esponsibiliti es to pr ovide leg al advice to his employ er, H HSC. See McKinney , 518 F.3d at 313 (noting that “[c]ases from other circ uits are

17consistent in holdin g t h at wh en a public employ ee raises complaints or conce rns up the chain of

command at his workplac e about his job duties, that speec h is underta ken in the course of perf orming his job” as compar ed with public employ ee who “take s his job conce rns to persons outside the work place in addition to raising them up the c hain of command at his workplace” (citations omitted)). Simi lar to the speec h at issue in Garce tti , McMillen’s “spee ch” was made in response to his supervisor’ s assig nment and as part of his job duties as an attorney conductin g l ega l re sear ch and providing leg al analy sis to his employ er. Garce tti , 547 U.S. at 421 (“The controlling fac tor [was] 6 that [t he employ ee]’s expressions wer e made pursuant to his duties as a cale ndar deputy .”). Guided by the Supreme Court’s analy sis in Garce tti , we co n cl u d e that the trial court err ed by deny ing appellants’ plea to the jurisdiction as to McMillen’s fre e speec h claim a nd sustain their second issue. 7

CONCLUSION For these rea sons, we reve rse the trial court’s order that denied appellants’ plea to the jurisdiction and dismiss McMillen’s claims for lack of subject matter jur isdiction.

For example, in a letter to HHSC’s Ex ecutive Commi ssioner that acc ompanied a copy of 6 the J une 2011 memorandum, McMille n expressly stated that he raised his conce rns about the prog ram at issue beca

use it was one of his “re sponsibili ties as an attorney who repr esents an org anization,” citing r

ule 1.12 of the Texas Disciplinary Rules of Professional Conduct. See Tex. Disciplinary

Rules Prof’l Conduct R. 1.12 (addre ssing r epre sentation of org anization as client). Be cause we have conclude d that the trial court did not have jurisd iction to consider 7 McMillen’s whistleblower and fre e speec h claims, we do not rea ch appellants’ third issue. See Tex. R. App. P. 47.1. 18__________________________________________ Melissa Goodwin, Jus tice Be fore Chief J ustice Rose, Jus tices Pury ear and Goodwin Reverse d and Dismissed Filed: January

8, 2015

19