Court Opinion

ID: 895481
Source: CourtListenerOpinion
Date Created: 2013-06-06 22:10:39.994834+00
Date Added: 2024-06-11T09:05:45.916677
License: Public Domain

IN THE SUPREME COURT OF TEXAS
                                                    444444444444
                                                      NO . 10-0582
                                                    444444444444

   THE UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTER AT DALLAS,
                              PETITIONER,
                                                           v.

                             LARRY M. GENTILELLO, M.D., RESPONDENT

              4444444444444444444444444444444444444444444444444444
                                   ON PETITION FOR REVIEW FROM THE
                            COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
              4444444444444444444444444444444444444444444444444444

                                               Argued September 12, 2012

       JUSTICE WILLETT delivered the opinion of the Court.

       The Texas Whistleblower Act bars retaliation against a public employee who reports his

employer’s or co-worker’s “violation of law” to an “appropriate law enforcement

authority”—defined as someone the employee “in good faith believes” can “regulate under or

enforce” the law allegedly violated or “investigate or prosecute a violation of criminal law.”1 We

consider today whether an employee’s report to a supervisor is a report to an appropriate law-

enforcement authority under the Act where the employee knows his supervisor’s power extends only

to ensuring internal compliance with the law purportedly violated. That is, the supervisor, while

       1
           T EX .G O V ’T C O D E § 554.002.
overseeing internal adherence to the law, is empowered only to refer suspected violations elsewhere

and lacks free-standing regulatory, enforcement, or crime-fighting authority.

       We hold, consistent with our prior cases, that the Act’s constricted definition of a law-

enforcement authority requires that a plaintiff’s belief be objectively reasonable. On that score,

purely internal reports untethered to the Act’s undeniable focus on law enforcement—those who

either make the law or pursue those who break the law—fall short. Other states’ whistleblower laws

accommodate internal reports to supervisors; Texas law does not. Under our Act, the jurisdictional

evidence must show more than a supervisor charged with internal compliance or anti-retaliation

language in a policy manual urging employees to report violations internally. For a plaintiff to

satisfy the Act’s good-faith belief provision, the plaintiff must reasonably believe the reported-to

authority possesses what the statute requires: the power to (1) regulate under or enforce the laws

purportedly violated, or (2) investigate or prosecute suspected criminal wrongdoing.

       As no jurisdictionally sufficient evidence exists here of any objectively reasonable belief in

such power, we reverse the court of appeals’ judgment and dismiss the case for lack of jurisdiction.

                                          I. Background

       Dr. Larry Gentilello, a professor of surgery at The University of Texas Southwestern Medical

Center (UTSW), occupied the Chair of the Division of Burn, Trauma and Critical Care and the

Distinguished C. James Carrico, M.D. Chair in Trauma. According to Dr. Gentilello’s petition, he

raised concerns with his supervisor, Dr. Robert Rege, about lax supervision of trauma residents (i.e.,

doctors-in-training) at Parkland Hospital, a hospital served by UTSW. Specifically, Gentilello

complained that trauma residents were treating and operating on patients without the supervision of

                                                  2
an attending physician, “contrary to proper Medicare and Medicaid requirements and procedures.”

After being stripped of his faculty chair positions, Gentilello filed a whistleblower suit charging that

the demotion was in retaliation for reporting UTSW’s violations of unspecified federal patient-care

and resident-supervision rules.

         UTSW contends that Gentilello’s whistleblower suit is barred by governmental

immunity—that his suit lacks the Act’s required jurisdictional elements—and that the lower courts

erred in denying UTSW’s plea to the jurisdiction.2 We agree.

                                                   II. Discussion

         Section 554.002 of the Whistleblower Act provides:

         (a) A state or local governmental entity may not suspend or terminate the
         employment of, or take other adverse personnel action against, a public employee
         who in good faith reports a violation of law by the employing governmental entity
         or another public employee to an appropriate law enforcement authority.
         (b) In this section, a report is made to an appropriate law enforcement authority if the
         authority is part of a state or local governmental entity or of the federal government
         that the employee in good faith believes is authorized to:
                  (1) regulate under or enforce the law alleged to be violated in the report; or
                  (2) investigate or prosecute a violation of criminal law.3

         2
            This is our second decision in this long-running dispute. In 2009 we held it was a “jurisdictional question”
whether Gentilello’s “reporting of violations of Medicare and Medicaid regulations to a supervisor is a good-faith report
of a violation of law to an appropriate law-enforcement authority.” Univ. of Tex. Sw. Med. Ctr. at Dallas v. Gentilello,
300 S.W .3d 753, 754 (Tex. 2009) (per curiam) (citing State v. Lueck, 290 S.W .3d 876 (Tex. 2009) (holding that
whistleblower suits can be dismissed on the pleadings if the plaintiff fails to satisfy the elements of section 554.002)).
W e remanded to the court of appeals to determine whether Gentilello’s suit was barred by governmental immunity in
light of Lueck. Id. The court of appeals below held there was sufficient evidence that Gentilello had a good-faith belief
he had reported to an appropriate law-enforcement authority under the Act. 317 S.W .3d 865, 870–71. UTSW then filed
this interlocutory appeal.

         3
             T EX .G O V ’T C O D E § 554.002.

                                                            3
Since the Legislature defined when “a report is made to an appropriate law enforcement authority,”

we must use that statutory definition.4

       This case raises the following issue: Did Gentilello make a good-faith report to an

appropriate law-enforcement authority under the Act when he reported alleged violations of law to

a supervisory faculty member who oversees internal compliance with myriad Medicare/Medicaid

requirements at a state medical school?

              A. An Employee’s Good-Faith Belief that the Entity Is an Appropriate
                 Law-Enforcement Authority Must Be Objectively Reasonable.

       We explained in Texas Department of Transportation v. Needham that “good faith” in the

Whistleblower Act context has both objective and subjective elements. It turns on more than an

employee’s personal belief, however strongly felt or sincerely held. It means:

       (1) the employee believed the governmental entity was authorized to (a) regulate
       under or enforce the law alleged to be violated in the report, or (b) investigate or
       prosecute a violation of criminal law; and
       (2) the employee’s belief was reasonable in light of the employee’s training and
       experience.5

       In other words, the employee’s belief must be objectively reasonable. Even if Gentilello

“honestly believed” that Rege was an appropriate authority, that belief can only satisfy the good-faith

requirement “if a reasonably prudent employee in similar circumstances” would have thought so.6

       4
           Id. § 311.011(b).

       5
           82 S.W .3d 314, 321 (Tex. 2002) (emphasis added).

       6
           Id. at 320.

                                                        4
       We have had three occasions to remove the objective element and protect internal reports to

workplace supervisors who lacked the Act’s specified powers. All three times we have declined, in

2002,7 2009,8 and 2010.9

       Our 2002 decision in Needham was our first to interpret “appropriate law enforcement

authority.”10 There, a Texas Department of Transportation (TxDOT) employee reported a co-

worker’s alleged drunk driving to a supervisor.11 Stressing the statutory definition’s “limiting

nature,”12 we held there was no basis for a good-faith belief that the supervisor was an appropriate

authority under the Act because the employee alleged only that TxDOT could internally discipline

and externally report drunk driving infractions.13

       Next came Lueck in 2009, also involving TxDOT, where we considered whether an

employee’s email report to his supervisor sufficed to meet the Act’s jurisdictional requirements.14

We answered no, noting that the email itself belied the employee’s good-faith belief by recognizing

the supervisor would have to forward the report elsewhere for prosecution.15

       7
           Needham, 82 S.W .3d 314.

       8
           Lueck, 290 S.W .3d 876.

       9
           City of Elsa v. Gonzalez, 325 S.W .3d 622 (Tex. 2010) (per curiam).

       10
            82 S.W .3d at 318.

       11
            Id. at 316.

       12
            Id. at 319.

       13
            Id. at 320–21.

       14
            290 S.W .3d at 878–79.

       15
            Id. at 886.

                                                         5
       Most recently, in 2010, we decided City of Elsa, involving a city manager fired after reporting

alleged violations of law to the city council.16 In dismissing the suit, we explained that the

employee’s belief that “the city council had the authority to postpone the [allegedly unlawful]

meeting or otherwise prevent an alleged violation of the Open Meetings Act from occurring does not

satisfy either the objective or subjective components of a good-faith belief that the city council was

an appropriate law enforcement authority as defined in section 554.002(b).”17 The fact that the

council was “required to comply with the Open Meetings Act does not equate to its having authority

to ‘regulate under or enforce’ those provisions as to itself.”18 The plaintiff fell short because “the

Whistleblower Act’s limited definition of a law enforcement authority does not include an entity

whose power is not shown to extend beyond its ability to comply with a law by acting or refusing

to act or by preventing a violation of law by acting or refusing to act.”19

       These cases, taken together, decide today’s case. Gentilello fails the objective component

of the Act’s good-faith test. Given his training and expertise, he should have known that his

supervisor’s purely internal authority was not law enforcement but law compliance—in other words,

Rege was only capable of ensuring that UTSW followed federal directives. The bare power to urge

compliance or purge noncompliance does not transform Rege into an “appropriate law enforcement

authority” as defined in the Act. The term has a specific, legislatively prescribed meaning, and under

       16
            325 S.W .3d at 627.

       17
            Id. at 628.

       18
Idaho
19
            Id.

                                                  6
our recent precedents—Needham, Lueck, and City of Elsa—Gentilello simply could not have formed

an objectively reasonable belief that Rege possessed any of the special “law enforcement” powers

itemized in section 554.002(b).

             B. Ensuring Internal Compliance with the Law Is not Synonymous with
                            Regulating Under or Enforcing the Law.

       As we have held, an appropriate law-enforcement authority must be actually responsible for

regulating under or enforcing the law allegedly violated. It is not simply an entity responsible for

ensuring internal compliance with the law allegedly violated.

       In Needham, where the plaintiff reported to a TxDOT supervisor his co-worker’s suspected

drunk driving, we held TxDOT was not an appropriate law-enforcement authority under the Act:

“TxDOT has no authority to regulate under or enforce the Texas[] driving while intoxicated laws.

Nor does it have authority to investigate or prosecute these criminal laws.”20

       The court of appeals tried to distinguish the Medicare/Medicaid rules in this case from the

driving while intoxicated (DWI) laws in Needham.21 Noting that UTSW was required to follow

certain Medicare/Medicaid requirements to receive federal funding,22 the court of appeals held there

was a fact issue as to Gentilello’s good-faith belief that Rege was an appropriate law-enforcement

       20
            82 S.W .3d at 320 (internal citation omitted).

       21
            317 S.W .3d at 870.

       22
            Id. (citing 42 C.F.R. §§ 415.172, 482.11, 482.12(a), and 482.55, and 42 U.S.C. § 1320a-7b(a)).

                                                             7
authority because, “unlike the DWI statute at issue in Needham, the statutes at issue here specifically

charge [UTSW] and its physicians with implementing the laws at the hospital level.”23 We disagree.

         In City of Elsa, the plaintiff reported to the city council alleged violations of the Open

Meetings Act, which plainly imposes on cities a duty of compliance and implementation. We

deemed the plaintiff’s report jurisdictionally insufficient because the city council’s obligation to

follow the Act “does not equate to its having authority to ‘regulate under or enforce’ those provisions

as to itself.”24 Similarly, UTSW had a legal duty to follow various Medicare/Medicaid requirements,

and Rege oversaw that internal compliance, but his power reached no further. As the supervisory

Clinical Department Chair who made sure UTSW followed the law correctly, Rege was undoubtedly

a law-compliance authority, but he was not a law-enforcement authority as our cases define that

statutory term. As a legal matter, only the United States Secretary of Health and Human Services

(HHS Secretary) can “regulate under” or “enforce” Medicare/Medicaid rules. Gentilello asserted

no specific rules in his pleadings, but 42 U.S.C. § 1395hh(a) vests sole power in the HHS Secretary

to promulgate and enforce the Medicare/Medicaid rules.25

         Dr. Rege oversees compliance within UTSW, but complying does not equal compelling. Put

another way, UTSW is itself subject to regulation but does not subject others to regulation; being

regulated is not the same as being the regulator. Indeed, all governmental bodies must themselves

         23
Idaho
24
              325 S.W .3d at 628.

        25
         42 U.S.C. § 1395hh(a) (2011); see also id. § 1301(a)(6) (defining “Secretary” as the Secretary of Health and
Human Services).

                                                         8
adhere to various statutes and regulations, but such compliance does not equate to the authority to

“regulate under or enforce” those provisions. The Whistleblower Act speaks to an authority

statutorily empowered to regulate under or enforce the actual law allegedly violated—“the particular

law the public employee reported violated is critical to the determination”26—or to investigate or

prosecute a criminal violation. The upshot of our prior decisions is that for an entity to constitute

an appropriate law-enforcement authority under the Act, it must have authority to enforce,

investigate, or prosecute violations of law against third parties outside of the entity itself, or it must

have authority to promulgate regulations governing the conduct of such third parties. Authority of

the entity to enforce legal requirements or regulate conduct within the entity itself is insufficient to

confer law-enforcement authority status.        Indeed, holding otherwise would transform every

governmental entity that is subject to any regulation or that conducts internal investigations or

imposes internal discipline into law-enforcement authorities under the Act. Such a result would

collide head-on with the Act’s limited definition and our cases interpreting that definition.

        We do not hold that a Whistleblower Act report can never be made internally. A police

department employee could retain the protections of the Whistleblower Act if she reported that her

partner is dealing narcotics to her supervisor in the narcotics or internal affairs division. In such a

situation, the employee works for an entity with authority to investigate violations of drug laws

committed by the citizenry at large. UTSW concedes in its briefing that “some Whistleblower Act

reports may be made internally—for instance, a report of a violation of the Texas Penal Code to a

        26
             Needham, 82 S.W .3d at 320.

                                                    9
supervisor who is also a policeman and, as such, is authorized to investigate violations of criminal

law.” But here, as in Needham and Lueck, the supervisor lacked any such power to enforce the law

allegedly violated or to investigate or prosecute criminal violations against third parties generally.

         On this point our jurisprudence is clear: the Act protects those who report to authorities that

issue legal directives, not authorities that follow them. Federal27 and other state28 whistleblower laws

explicitly protect purely internal reports to supervisors; Texas law does not. Accordingly, a

department chair’s ability to oversee internal compliance only with Medicare/Medicaid

requirements—not enforce them, not regulate under them, not investigate or prosecute purported

criminal violations of them, not perform any of the functions listed in section 554.002(b)—dictates

the answer in this case. Reporting to Rege was not protected by the Act.

                          C. It Is Likewise Insufficient that an Employer Takes
                              Internal Investigative or Disciplinary Action.

         27
           See W histleblower Protection Enhancement Act of 2012, Pub. L. No. 112-199, § 1(C), 126 Stat. 1465, 1466
(to be codified at 5 U.S.C. § 2302(f)(1)) (“A disclosure shall not be excluded from . . . [the whistleblower protections
of 5 U.S.C. § 2302(b)(8)] because— (A) the disclosure was made to a supervisor.”) .

         28
              See, e.g., N.J. S TAT . A N N . § 34:19-3 (W est 2011) (“An employer shall not take any retaliatory action against
an employee because the employee . . . [d]iscloses, or threatens to disclose to a supervisor or to a public body an activity,
policy or practice of the employer . . . that the employee reasonably believes: (1) is in violation of a law, or a rule or
regulation promulgated pursuant to law . . . or (2) is fraudulent or criminal . . . .”); N.Y. L AB . L AW § 740(2) (McKinney
Supp. 2012) (“An employer shall not take any retaliatory personnel action against an employee because such
employee . . . discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the
employer that is in violation of law, rule or regulation which violation creates and presents a substantial and specific
danger to the public health or safety, or which constitutes health care fraud . . . .”); O H IO R EV . C O D E A NN . § 4113.52
(LexisNexis 2007) (“(A)(1)(a) If an employee becomes aware in the course of the employee’s employment of a violation
of any state or federal statute . . . the employee orally shall notify the employee’s supervisor or other responsible officer
of the employee’s employer of the violation and subsequently shall file with that supervisor or officer a written
report . . . . (B) Except as otherwise provided in division (C) of this section, no employer shall take any disciplinary or
retaliatory action against an employee for making any report authorized by division (A)(1) . . . . (C) An employee shall
make a reasonable and good faith effort to determine the accuracy of any information reported under division (A)(1) . . . .
If the employee who makes a report . . . fails to make such an effort, the employee may be subject to disciplinary action
by the employee’s employer, including suspension or removal . . . .”).

                                                              10
       We have made this point clearly, and repeatedly: an entity capable only of disciplining its

employees internally is not an “appropriate law enforcement authority” under the Act. As we

explained in Needham a decade ago, “the statutory definition’s limiting language—regulate under,

enforce, investigate, and prosecute—does not include an employer’s power to internally discipline

its own employees for an alleged violation.”29 It is not enough that an employer “has authority to

regulate and investigate its employees’ conduct only to carry out its internal disciplinary process

procedures.”30

       We reaffirmed this view recently in Lueck. Looking at the pleadings alone, we held that a

TxDOT whistleblower could not have believed in good faith that his supervisor was an appropriate

law-enforcement authority because the whistleblower indicated he knew the supervisor possessed

no stand-alone authority and would have to refer the report elsewhere.31 Explaining our opinion in

Needham, we added: “an employer’s power to conduct internal investigative or disciplinary

procedures does not satisfy [the] standard for appropriate law enforcement authority under the Act.”32

A supervisor looking into and addressing possible noncompliance in-house bears little resemblance

to a law-enforcement official formally investigating or prosecuting that noncompliance on behalf of

       29
            82 S.W .3d at 321.

       30
            Id. at 320.

       31
            Lueck, 290 S.W .3d at 885–86.

       32
            Id. at 886 (citing Needham, 82 S.W .3d at 320–21).

                                                         11
the public, or a regulatory authority charged with promulgating or enforcing regulations applicable

to third parties generally.

        Gentilello argues, contrary to our precedent, most recently City of Elsa,33 that Rege’s

authority to ensure UTSW’s own compliance at the hospital level, including meting out discipline,

made Rege an appropriate law-enforcement authority. Our cases hold the opposite, and we reaffirm

today what we have said repeatedly: lodging an internal complaint to an authority whom one

understands to be only charged with internal compliance, even including investigating and punishing

noncompliance, is jurisdictionally insufficient under the Whistleblower Act.34 The Act’s language

is restrictive, and what matters is that the reported-to authority is reasonably believed to be

empowered either to regulate under or enforce the law allegedly violated, or to investigate or

prosecute criminal offenses.

        In this case, Gentilello and his colleagues acknowledged that, while Rege oversaw

compliance within UTSW, Rege would have to report any violations to external law-enforcement

authorities. Gentilello conceded in his hearing testimony that Rege’s authority was purely inward-

looking, overseeing internal adherence and disciplining those who went astray, while referring

suspected illegality “to who[m]ever is in charge of enforcing the law”—official authorities like the

Center for Medicare and Medicaid Services that are actually empowered to do what the Act

contemplates. Gentilello and Rege likewise testified that Rege had no authority to write rules and

regulations under the Medicare/Medicaid statutes.

        33
             325 S.W .3d at 628.

        34
             Id.; Lueck, 290 S.W .3d at 885–86; Needham, 82 S.W .3d at 319–21.

                                                         12
       UTSW’s Clinical Department Chair is not a police officer or prosecutor. And conducting

private oversight and discipline is not official action taken to combat violations of public law. The

Medicare/Medicaid laws do not endow medical-school faculty supervisors or hospital department

chairs with any special regulatory, enforcement, investigative or prosecutorial authority. It was

reasonable for Gentilello to raise concerns about improper billing or patient-care practices with Rege,

but it is objectively unreasonable for Gentilello, given his experience, expertise and training, to

equate his supervisor with an “appropriate law enforcement authority.” Rege was charged with

complying and implementing, not with regulating or enforcing, much less with investigating and

prosecuting criminal activity. As we stressed in Needham, broadening the Act to include an

employer’s internal disciplinary process “would mean all public employers with a disciplinary policy

for handling employees’ alleged illegal conduct” are captured by the Act, not just those with actual

regulatory, enforcement, or criminal investigatory or prosecutorial authority.35

                   D. An Entity’s Stock Anti-Retaliation Policies are Insufficient
                         to Expand Coverage of the Whistleblower Act.

       According to the court of appeals, Gentilello’s good-faith belief that Rege was an appropriate

law-enforcement authority was rooted in UTSW’s billing compliance program,36 which lays out

UTSW’s internal guidelines regarding Medicare/Medicaid compliance and states:

       •          “The Clinical Department Chair [i.e., Rege] shall have the
                  responsibility for ensuring the goals of [Medicare/Medicaid] billing
                  compliance are met”; and

       35
            82 S.W .3d at 320.

       36
            317 S.W .3d at 870–71.

                                               13
       •       “Employees who report, in good faith, possible compliance problems
               shall be protected from retaliation or harassment, as established by
               law.”

       Gentilello contends this language suffices to defeat UTSW’s sovereign immunity. We

disagree that this language vests Rege with any law-enforcement powers or satisfies our previous

good-faith belief decisions. Holding otherwise would enable easy circumvention of our on-point

precedent.

       On its face, this document simply reflects UTSW’s commitment to internal compliance; it

cannot be interpreted to relax the Whistleblower Act’s requirements. It is UTSW’s declaration that

it will abide by all directives from the federal government concerning Medicare/Medicaid laws,

nothing more. It does not empower Rege to regulate under or enforce Medicare/Medicaid laws, or

to investigate and prosecute criminal violations.

       Gentilello concedes that Rege had no authority to jail wayward employees, but instead urges

that Rege’s general supervision of internal compliance and UTSW’s anti-retaliation pledge defeats

UTSW’s immunity. However, as explained above, the Act and our cases plainly require an

objectively reasonable belief that Rege was an appropriate law-enforcement authority. It is not

enough that Rege exhorted internal UTSW compliance with federal health-care provisions. Nor is

it enough that UTSW recited anti-retaliation principles in an internal policy manual. Neither

supports a good-faith belief that Rege exercised the law-enforcement powers specified in section

554.002(b). In sum, a whistleblower plaintiff who reports only to an internal supervisor who lacks

section 554.002(b) powers cannot survive a jurisdictional challenge under the Act’s good-faith belief

provision merely by pointing to anti-retaliation language in a workplace policy manual.

                                                 14
                                          III. Conclusion

       Gentilello’s Whistleblower Act claim cannot be squared with our precedent construing

section 554.002(b)’s limited definition of appropriate law-enforcement authority. The Act, by its

text and structure, restricts “law enforcement authority” to its commonly understood meaning. That

is, it protects employees who report to authorities that actually promulgate regulations or enforce the

laws, or to authorities that pursue criminal violations. The specific powers listed in section

554.002(b) are outward-looking. They do not encompass internal supervisors charged with in-house

compliance and who must refer suspected illegality to external entities. Our cases are consistent on

this point, and we reaffirm them today. Such internal complaints do not satisfy the requirement that

the “report [be] made to an appropriate law enforcement authority” under section 554.002 of the

Whistleblower Act.

       It may well be reasonable for a government employee to report suspected violations of law

to a supervisor, but that does not mean every supervisor meets the Whistleblower Act’s definition

of an “appropriate law enforcement authority.” This is a legislatively-mandated legal classification,

one tightly drawn, and we cannot judicially loosen it. Other states protect purely internal

whistleblowing, but under our Legislature’s narrower view, a whistleblower cannot reasonably

believe his supervisor is an appropriate law-enforcement authority if the supervisor’s power extends

no further than ensuring the governmental body itself complies with the law. Merely overseeing

adherence, including urging employees to report violations internally, is insufficient under the Texas

Whistleblower Act.

                                                  15
       Accordingly, as UTSW’s immunity remains intact, we reverse the judgment of the court of

appeals and dismiss the case for lack of jurisdiction.

                                                         _______________________________________
                                                         Don R. Willett
                                                         Justice

OPINION DELIVERED: February 22, 2013

                                                 16