CASE NO. 03-14-00594-CV

IN THE COURT OF APPEALS 

FOR THE THIRD DISTRICT OF TEXAS 

AUSTIN, TEXAS 

KEN PAXTON1, ATTORNEY GENERAL OF TEXAS, 

Appellant, 

v.

TEXAS DEPARTMENT OF STATE HEALTH SERVICES, 

Appellee. 

On Appeal from the 353rd District Court of Travis County, Texas 

The Honorable Lora Livingston, Presiding

REPLY BRIEF OF APPELLANT KEN PAXTON, 

ATTORNEY GENERAL OF TEXAS 

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

BRANTLEY STARR

Deputy Attorney General for Legal 

Counsel

DAVID A. TALBOT, JR.

Chief, Administrative Law Division

KIMBERLY L. FUCHS

Chief, Open Records Litigation

MATTHEW R. ENTSMINGER

State Bar No. 24059723

Assistant Attorney General

Open Records Litigation

Administrative Law Division

Office of the Attorney General of Texas

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 475-4151

Facsimile: (512) 320-0167

ATTORNEYS FOR APPELLANT KEN 

PAXTON, ATTORNEY GENERAL OF TEXAS

February 27, 2015

 

1 Pursuant to Texas Rule of Appellate Procedure 7.2, the Attorney General substitutes Attorney 

General Ken Paxton for former Attorney General Greg Abbott. 

ACCEPTED

03-14-00594-CV

4312768

THIRD COURT OF APPEALS

AUSTIN, TEXAS

2/27/2015 11:55:30 AM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 2/27/2015 11:55:30 AM JEFFREY D. KYLE Clerk
ii

TABLE OF CONTENTS

TABLE OF CONTENTS.......................................................................................... ii

INDEX OF AUTHORITIES.................................................................................... iii

REPLY.......................................................................................................................1

I. DSHS has failed to show any statutory investigative authority outside of 

subchapter C that was reasonably contemplated by the legislature when 

creating section 531.1021(g). .....................................................................1

II. Section 531.102 does not mandate the creation of a publicly-available 

“final report” on audits or investigations unrelated to fraud, waste, and 

abuse in the provision and delivery of all health and human services in 

the state.......................................................................................................4

III. The legislature has not taken any action to amend section 531.1021(g) 

to address the Attorney General’s interpretation........................................5

CONCLUSION AND PRAYER ...............................................................................7

CERTIFICATE OF COMPLIANCE.........................................................................8

CERTIFICATE OF SERVICE ..................................................................................9
iii

INDEX OF AUTHORITIES

CASE

Tex. Dep’t of Aging and Disability Servs. v. Greg Abbott, Attorney Gen. of Tex., 

No. D-1-GN-11-002989 (353rd Dist. Ct., Travis County, Tex. Jul. 18, 2013).........6

STATUTES

Tex. Gov't Code 

§ 531.102(a) ...........................................................................................................2, 4

§ 531.102(j)................................................................................................................4

§ 531.102(k)...............................................................................................................4

§ 531.008(c)(2)...........................................................................................................3

§ 531.103....................................................................................................................2

§ 531.1031..................................................................................................................2

§ 531.104....................................................................................................................2

§ 531.1021(g).........................................................................................................1, 5

RULE

1 Tex. Admin. Code § 371.11(a) ...............................................................................3

ATTORNEY GENERAL LETTER RULINGS2

OR2004-08876...........................................................................................................5

OR2012-10072...........................................................................................................6

 

2 Open records decisions and letter rulings of the Attorney General are available on the internet at: 

https://www.oag.state.tx.us/open/ogindex.shtml and Westlaw©.
iv

ATTORNEY GENERAL LETTER RULINGS (continued)

OR2012-19674...........................................................................................................6

OR2013-02357...........................................................................................................6

OR2013-02732...........................................................................................................6

OR2013-04545...........................................................................................................6

OR2013-05224...........................................................................................................6

OR2013-06264...........................................................................................................6

OR2013-08066...........................................................................................................6

OR2013-11552...........................................................................................................6

OR2013-12119...........................................................................................................6

OR2013-14973...........................................................................................................6

OR2014-06063...........................................................................................................6

OR2014-07711...........................................................................................................6

OR2014-13108...........................................................................................................6

OR2014-15004...........................................................................................................6
TO THE HONORABLE JUSTICES OF THE THIRD COURT OF APPEALS:

The Attorney General files this brief in reply to the brief submitted by the 

Department of State Health Services (DSHS).

REPLY

I. DSHS HAS FAILED TO SHOW ANY STATUTORY INVESTIGATIVE 

AUTHORITY OUTSIDE OF SUBCHAPTER C THAT WAS 

REASONABLY CONTEMPLATED BY THE LEGISLATURE WHEN

CREATING SECTION 531.1021(g).

DSHS emphasizes that section 531.1021(g) of the Government Code restricts 

confidentiality of information and materials subpoenaed or compiled by the Office 

of the Attorney General to such information gathered “in connection with a Medicaid 

fraud investigation,” while containing no similar restrictive phrasing in relation to 

OIG investigations. Appellee’s Br. at 8–9; see Tex. Gov’t Code § 531.1021(g). But 

this phrasing only further supports the Attorney General’s position that the 

legislature clearly contemplated only those investigations conducted under 

subchapter C (“Medicaid and Other Health and Human Services Fraud and 

Overcharges”) when crafting the limited confidentiality provision contained in 

section 531.1021(g). 

While the Texas Constitution mandates the Office of the Attorney General is 

responsible for representing the State in all cases in which the State may be a party, 

subchapter C concerns only those investigations conducted by the Attorney 
2

General’s Medicaid fraud enforcement divisions. See Tex. Gov’t Code §§ 531.103

(authorizing interagency coordination in cases of suspected fraud, waste, or abuse 

under state Medicaid program or other program administered by the commission or 

a health and human services agency); 531.1031 (defining “participating agency” in 

relevant part as “the Medicaid fraud enforcement divisions of the office of the 

attorney general”); 531.104 (mandating Health and Human Services Commission 

provide investigative support to Attorney General “in connection with cases under 

Subchapter B, Chapter 36, Human Resources Code,” relating to Medicaid Fraud 

Prevention). Given the Attorney General’s mandated involvement in any number of 

cases or investigations beyond those contemplated by subchapter C of chapter 531, 

it is apparent why the legislature explicitly limited the reach of section 531.1021(g) 

to only those materials subpoenaed or compiled by the Office of the Attorney 

General “in connection with a Medicaid fraud investigation.” 

To the extent the OIG might conduct investigations not contemplated by 

subchapter C, however, it can claim no similar, obvious investigative authority 

beyond that established by subchapter C and which the legislature might have taken 

into account in drafting the confidentiality provision in question. Rather, as 

explained in the Attorney General’s brief, the legislature has explicitly set out the 

duties of the OIG within subchapter C itself, and nowhere else. See Tex. Gov’t Code 

§ 531.102(a) (OIG responsible for “investigation of fraud, waste, and abuse in the 
3

provision and delivery of all health and human services in the state”). DSHS cites 

to a statute delineating the divisions of the Health and Human Services Commission 

(HHSC) in support of its claim that the OIG “has been charged with investigating 

more than just Medicaid fraud”: “The executive commissioner shall establish within 

the commission . . . the office of inspector general to perform fraud and abuse 

investigation and enforcement functions as provided by Subchapter C and other 

law.” Tex. Gov’t Code § 531.008(c)(2); see Appellee’s Br. at 10. But the Attorney 

General notes DSHS has not cited to any “other law”—specifically one recognizing 

the OIG’s investigative authority regarding internal personnel matters not related to 

fraud, waste, and abuse in the provision and delivery of all health and human services 

in the state—of which the legislature might have taken into account when drafting 

the statutory provision in question. Indeed, even the relevant provision of the Texas 

Administrative Code states “The [OIG] is responsible for the investigation of fraud 

and abuse in the provision of health and human services (HHS) in Medicaid and 

other HHS programs.” 1 Tex. Admin. Code § 371.11(a) (HHSC, Medicaid and 

Other Health and Human Services Fraud and Abuse Program Integrity). 

Consequently, DSHS has failed to demonstrate that it should be assumed the 

legislature contemplated other types of investigations OIG might undertake, 

unrelated to those specifically authorized under subchapter C, when it made 

confidential materials gathered during an OIG audit or investigation.
4

II. SECTION 531.102 DOES NOT MANDATE THE CREATION OF A 

PUBLICLY-AVAILABLE “FINAL REPORT” ON AUDITS OR 

INVESTIGATIONS UNRELATED TO FRAUD, WASTE, AND ABUSE 

IN THE PROVISION AND DELIVERY OF ALL HEALTH AND 

HUMAN SERVICES IN THE STATE.

DSHS asserts “[a]ny final report on an OIG audit or investigation is public, 

pursuant to Section 531.102(k).” Appellee’s Br. at 14; see Tex. Gov’t Code 

§ 531.102(k) (“A final report on an audit or investigation is subject to required 

disclosure under Chapter 552.”). But section 531.102 mandates OIG create a final 

report only in relation to an audit or investigation conducted under subchapter C: 

“The [OIG] shall prepare a final report on each audit or investigation conducted 

under this section.” Tex. Gov’t Code § 531.102(j) (emphasis added). As noted, the 

section in question relates to investigations of fraud, waste, and abuse in the 

provision and delivery of all health and human services in the state, but is silent as 

to investigations of employee misconduct otherwise unrelated to such fraud, waste, 

or abuse, or as to any other investigation conducted outside the subchapter’s 

authority. Tex. Gov’t Code § 531.102(a); see Appellant’s Br. at 7–9. Contrary to 

DSHS’s claim, this provision does not mandate the release of a final report regarding 

the types of employee misconduct investigations at issue. Rather, this section offers 

further support for the Attorney General’s contention that the legislature did not 
5

contemplate investigations conducted outside of subchapter C in creating section 

531.1021(g).3

III. THE LEGISLATURE HAS NOT TAKEN ANY ACTION TO AMEND 

SECTION 531.1021(g) TO ADDRESS THE ATTORNEY GENERAL’S 

INTERPRETATION.

DSHS argues at length regarding the legislature’s inaction following the 

previous determination issued by the Attorney General to HHSC in an informal open 

records letter ruling issued in 2004. Appellee’s Br. at 20–26; see Tex. Att’y Gen.

OR2004-08876, C.R. 62. While the Attorney General concedes this office has 

previously misapplied section 531.1021(g) to employee misconduct investigations 

not conducted under subchapter C, the ruling containing the previous determination 

is not such an example. Rather, as explicitly stated in that ruling, the previous 

determination was based on HHSC’s claim “that the OIG was created ‘to prevent, 

detect and investigate fraud, abuse and waste in state health and human service 

programs.’” C.R. 62. Accordingly, the text of the previous determination itself 

would not have put the public or the legislature on notice regarding the application 

of section 531.1021(g) to employee misconduct investigations not arising under 

subchapter C. 

 

3 The Attorney General notes the record does not reflect that DSHS has released any “final report” 

relating to the employee misconduct investigation at issue in this suit. 
6

However, the Attorney General did later issue a number of other informal 

letter rulings applying the statute to misconduct investigations, without intervention 

by the legislature. See Appellee’s Br. at 24. On the other hand, since 2012 the 

Attorney General has issued numerous letter rulings holding that section 

531.1021(g) does not apply to information compiled by the OIG when such 

information is “not related to Medicaid or other health and human services fraud, 

abuse, or overcharges.” See, e.g., Tex. Att’y Gen. OR2012-10072, OR2012-19674, 

OR2013-02357, OR2013-02732, OR2013-04545, OR2013-05224, OR2013-06264, 

OR2013-08066, OR2013-11552, OR2013-12119, OR2013-14973, OR2014-06063, 

OR2014-07711, OR2014-13108, OR2014-15004. But despite the fact the letter 

ruling at issue in the instant suit was issued in June of 2012, the 83rd Legislature 

made no attempt to address the Attorney General’s interpretation of section 

531.1021(g). Further, no bill has thus far been proposed in the current legislative 

session that would address the Attorney General’s application of the statute, despite 

previous and ongoing litigation over the matter.4

 

4 And beyond the instant suit, these rulings have generated other litigation. See Tex. Dep’t of Aging 

and Disability Servs. v. Greg Abbott, Attorney Gen. of Tex., No. D-1-GN-11-002989 (353rd Dist. 

Ct., Travis County, Tex. Jul. 18, 2013) (granting summary judgment in favor of the Attorney 

General); C.R. 123–25. The Department of Aging and Disability Services chose not to appeal that 

prior ruling and instead sought a different ruling by filing the instant suit. 
7

CONCLUSION AND PRAYER

For the reasons set forth in this reply and in the Attorney General’s brief, the 

Attorney General respectfully asks the Court to reverse the trial court’s grant of 

DSHS’s summary judgment motion and render judgment in favor of the Attorney 

General.

Respectfully Submitted,

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

BRANTLEY STARR

Deputy Attorney General for Legal Counsel

DAVID A. TALBOT, JR.

Chief, Administrative Law Division

KIMBERLY L. FUCHS

Chief, Open Records Litigation

/s/ Matthew R. Entsminger

MATTHEW R. ENTSMINGER

State Bar No. 24059723

Assistant Attorney General

Open Records Litigation

Administrative Law Division

Office of the Attorney General of Texas

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 475-4151

Facsimile: (512) 320-0167

matthew.entsminger@texasattorneygeneral.gov
8

ATTORNEYS FOR APPELLANT KEN PAXTON,

ATTORNEY GENERAL OF TEXAS

CERTIFICATE OF COMPLIANCE

I certify that the Reply Brief of Appellant Ken Paxton, Attorney General of 

Texas, submitted complies with Rule 9 of the Texas Rules of Appellate Procedure 

and the word count of this document is 1,485. The word processing software used to 

prepare this filing and calculate the word count of the document is Microsoft Word 

2013. 

Date: February 27, 2015

/s/ Matthew R. Entsminger

MATTHEW R. ENTSMINGER

ATTORNEY FOR APPELLANT
9

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Reply Brief of 

Appellant Ken Paxton, Attorney General of Texas, has been served on February 27, 

2015, on the following counsel-of-record via e-service:

Ann Hartley

State Bar No. 09157700 

Assistant Attorney General

Financial Litigation, Tax and Charitable Trusts Division

Office of the Attorney General of Texas

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 936-1313 

Facsimile: (512) 477-2348

ann.hartley@texasattorneygeneral.gov

ATTORNEY FOR APPELLEE

/s/ Matthew R. Entsminger

MATTHEW R. ENTSMINGER

ATTORNEY FOR APPELLANT