Court Opinion

ID: 3157903
Source: CourtListenerOpinion
Date Created: 2015-11-25 15:10:38.360732+00
Date Added: 2024-06-11T12:00:09.215373
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-14-00509-CV

                          The University of Texas at Austin, Appellant

                                                  v.

                                    Dijaira B. Smith, Appellee

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
    NO. D-1-GN-13-004318, HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

                             MEMORANDUM OPINION

               The University of Texas at Austin appeals the denial of the plea to the jurisdiction

it filed in Dijaira B. Smith’s suit brought pursuant to the Texas Whistleblower Act. See Tex. Gov’t

Code §§ 554.001-.009 (the Act). The University contends that the trial court erred in concluding that

Smith made a good faith report of a violation of law to an appropriate law enforcement authority and,

as a consequence, determining that it had subject-matter jurisdiction over Smith’s claims. Because we

conclude that Smith failed to make a report of a violation of law to an “appropriate law enforcement

authority” as required to waive the University’s governmental immunity, we reverse the order

denying the plea to the jurisdiction and dismiss the suit for lack of subject-matter jurisdiction.

                                         BACKGROUND

               Smith was formerly employed by the University as Director of Finance for the

University Interscholastic League (UIL). In 2012, the University’s Office of Internal Audits (Internal
Audits) began an investigation into allegations made against the UIL. Smith was asked to meet with

auditors from Internal Audits. Smith told the auditors that: (1) the UIL’s Executive Director had,

in an effort to bolster a UIL vendor’s application for a home loan, committed bank fraud by falsely

representing to a mortgage lender that the wife of a UIL vendor would be working as a contract

employee for the UIL; (2) the UIL had made unauthorized transfers of funds to the University’s

Division of Diversity and Community Engagement in violation of Texas Government Code section

771.004; (3) a UIL deputy director sexually harassed a UIL employee; (4) the same UIL deputy

director used a vehicle identified as belonging to the Bridge City Independent School District while

employed by the UIL; (5) the same deputy director sought to have Smith alter a government

document in connection with an open records request; (6) the UIL employed actionable hiring and

employment practices; and (7) the UIL failed to comply with laws governing its procurement of

goods and services. Smith later met with University attorneys from the Office of the Vice President

for Legal Affairs (Legal Affairs) and confirmed her earlier statements about the use of a Bridge City

ISD vehicle and the transfer of funds between the UIL and the Division of Diversity and Community

Engagement. According to Smith, after providing this information and cooperating with the

auditors, she was subjected to a series of adverse employment actions culminating in the termination

of her employment.

                Thereafter, Smith filed suit alleging that the adverse employment actions, including

the termination of her employment, were in violation of the Act. Smith claimed that the adverse

employment actions were the direct result of her providing information to auditors from Internal

Audits and to attorneys from Legal Affairs. In response, the University filed a plea to the jurisdiction

                                                   2
in which it asserted that the court lacked subject-matter jurisdiction over Smith’s suit because she

had failed to comply with the requirements for bringing a claim under the Act. Specifically, the

University contended that Smith did not report a violation of law by UIL or its employees to an

appropriate law enforcement authority. See id. § 554.002(b) (defining when report is made to

“appropriate law enforcement authority” under Act). After a hearing, the trial court denied the

University’s plea to the jurisdiction. The University then perfected this interlocutory appeal. See

Tex. Civ. Prac. & Rem. Code § 51.014(a)(8) (allowing party to pursue interlocutory appeal of

trial court’s ruling denying plea to jurisdiction filed by governmental unit).

              STANDARD OF REVIEW AND STATUTORY FRAMEWORK

               A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of

subject-matter jurisdiction. Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Subject-matter

jurisdiction presents a question of law that appellate courts review de novo. City of Houston v. Rhule,

417 S.W.3d 440, 442 (Tex. 2013). The plaintiff has the burden of alleging facts that affirmatively

demonstrate the trial court’s jurisdiction. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d
217, 226 (Tex. 2004). When subject-matter jurisdiction is premised on a cause of action under

the Act, the plaintiff must allege facts which, if true, would establish a violation of the Act. See

State v. Lueck, 290 S.W.3d 876, 880-81 (Tex. 2009). We begin with the allegations in Smith’s live

pleadings, which we construe liberally in favor of jurisdiction and, unless challenged with evidence,

take as true. See Miranda, 133 S.W.3d at 226-27. We also consider any evidence 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 facts

                                                  3
implicate the merits, the defendant is “put to a burden very similar to that of a movant for summary

judgment.” See University of Tex. v. Poindexter, 306 S.W.3d 798, 806-07 (Tex. App.—Austin 2009,

no pet.). Consequently, only conclusive contrary evidence suffices to negate the existence of any of

the jurisdictional facts Smith has pleaded. If the record raises a fact question that requires addressing

the merits of the case in order to resolve jurisdiction, then the case may proceed. Miranda, 133 S.W.3d

at 227-28. However, if the relevant evidence is undisputed or fails to raise a fact question, the court

rules on jurisdiction as a matter of law. Id.

                Section 554.0035 of the Act waives sovereign immunity when a public employee

alleges a violation of the Act. See Tex. Gov’t Code § 554.0035. A violation of the Act occurs “when

a governmental entity retaliates against a public employee for making a good-faith report of a

violation of law to an appropriate law enforcement authority.” Lueck, 290 S.W.3d at 878 (citing

Tex. Gov’t Code § 554.002(a)). Thus, to qualify for the Act’s waiver of immunity, Smith must have

pleaded facts which, if true, establish a violation of section 554.002. To do so, Smith must have

alleged the following elements: (1) she was a public employee; (2) she made a good faith report of

a violation of law by her employing governmental entity or another public employer; (3) she made

the report to an appropriate law enforcement authority; and (4) she suffered retaliation as a result of

making the report. See Tex. Gov’t Code § 554.002(a).

                                            DISCUSSION

                The University’s plea to the jurisdiction did not contest that Smith was a public

employee, that she made a good faith report of a violation of law by her employing governmental

entity, or that she suffered retaliation as a result of making the report. The gravamen of its plea to

                                                   4
the jurisdiction is its assertion that Smith did not meet her burden as to the third element of her

Whistleblower cause of action, i.e., that she made her report to an “appropriate law enforcement

authority,” as that term is defined in the Act.

                The Act provides that a report is made to an “appropriate law enforcement

authority . . . if the authority is part of a state or local government entity or 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.”

Id. § 554.002(b). “[A]n 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.” University of Tex. Sw. Med. Ctr. v.

Gentilello, 398 S.W.3d 680, 685 (Tex. 2013). The Act does not protect reports made to supervisors

with power only to oversee internal compliance within an entity. See Texas Dep’t of Human Servs.

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

are obligated to forward complaints to another department that does have outward-looking authority

to regulate under or enforce the law alleged to be violated or to investigate or prosecute criminal

violations against third parties. Id.

                To satisfy the requirement that a report be made to an “appropriate law enforcement

authority,” a plaintiff seeking protection under the Act must prove either that the report was made

to an appropriate law enforcement authority or that the employee had a good-faith belief that it was.

Id. at 614. “An employee’s belief is in good faith if: (1) the employee believed the governmental

entity qualified, and (2) the employee’s belief was reasonable in light of the employee’s training and

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

“second element is an objective one,” and the employee only receives protection under the Act “if

a reasonably prudent employee in similar circumstances would have believed the governmental

entity to which he reported a violation of law was an appropriate law-enforcement authority.” Id.;

see also Texas Comm’n on Envtl. Quality v. Resendez, 450 S.W.3d 520, 522 (Tex. 2014) ( explaining

that claimant must satisfy both subjective and objective requirements); Gentilello, 398 S.W.3d at

689 (stating that Act “restricts ‘law-enforcement authority’ to its commonly understood meaning”).

The good-faith inquiry “turns on more than an employee’s personal belief, however strongly felt

or sincerely held.” Gentilello, 398 S.W.3d at 683 (citing Needham, 82 S.W.3d at 321 (emphasis

in original)).

Did Smith Report to an Appropriate Law Enforcement Authority?

                 In her live pleadings, Smith alleged that she made reports of the alleged violations

of law to Internal Audits and Legal Affairs, but she does not allege specific facts that meet her

burden of demonstrating that she had a good faith belief that either Internal Audits or Legal Affairs

were “appropriate law enforcement authorities.” See City of Elsa, 325 SW.3d at 625 (conclusory

pleadings do not provide sufficient jurisdictional facts to determine if trial court had jurisdiction).

We look, then, to any evidence that would support this required jurisdictional fact. See id. (considering

whether there was evidence that would establish existence of required jurisdictional facts). Smith’s

response to the University’s plea to the jurisdiction referred the trial court to her deposition

testimony. In that testimony, Smith acknowledged that she knew that the function of Internal Audits

was limited to internal compliance issues. Smith testified to the following:

                                                   6
        Q:      What was [Internal Affairs’] function at U.T.—Austin?

        A:      It’s to ensure that U.T. departments were complying with The University of
                Texas at Austin, U.T. System, and the law, any other law applicable, to
                ensure that they were in compliance with those laws—and to take actions if
                the law—law regulations were not in compliance.

        Q:      What type of action do you believe [Internal Audits] could take?

        A:      I believe that they could terminate employment. It’s one of them. I believe
                that if the violation was applicable, they would—move forward to other
                enforcement agencies, and I believe that they had the authority to enforce.

Smith further testified that she believed that Internal Audits could ensure only that University

employees, and “not outsiders,” were in compliance with applicable rules, regulations, and laws.

Smith also stated that she believed Internal Audits “made the law for U.T., and if the law goes

beyond the U.T. boundaries, they would take actions” by which she meant that they would report

violations of the law to “other government agents, the law enforcement agents.”

                In response to interrogatories propounded by the University regarding her report of

bank fraud to Internal Audits, Smith stated that she believed that Internal Audits “could investigate

violations of the [] law, with corresponding duties to forward the fruits of such investigation

to proper prosecutorial authorities.” In her deposition testimony, Smith confirmed her belief that

Internal Audits was limited to investigating issues related to the University and that it did not have

the authority to interfere with the activities of other State agencies. She testified that, although she

did not know whether Internal Audits had the authority to prosecute anyone for bank fraud, she

believed that if it discovered such conduct it would “move forward” and report it to other authorities.

With respect to the transfers of money between agencies she alleged to be in violation of the

                                                   7
Government Code, Smith’s interrogatory responses stated that she believed that Internal Audits and

Legal Affairs were authorized to “regulate under and enforce against violations of Government Code

Section 771.004 by U.T. employees,” investigate any such violations and “pass the fruits of such

investigation to appropriate prosecutorial authorities.” Smith’s deposition testimony was consistent

with her interrogatory response. Smith also testified that the basis for her belief that Legal Affairs

was a law enforcement authority was simply that they were the University’s lawyers and because

Internal Audits asked Legal Affairs to participate in the investigation.

                 Even if Smith’s testimony were sufficient to meet the subjective component of her

required good faith belief that either Internal Audits or Legal Affairs was an “appropriate law

enforcement authority,” we must also consider whether such a belief is reasonable given Smith’s

training and experience. See, e.g., Gentilello, 398 S.W.3d at 683 (even if employee “honestly

believed” she reported to appropriate authority, belief can only satisfy good faith requirement “if

a reasonably prudent employee in similar circumstances” would have thought so). In Gentilello,

the Texas Supreme Court explained what constitutes an appropriate law enforcement authority

under the Act:

       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 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.

                                                  8
Id. at 686; see also Okoli, 440 S.W.3d at 616 (reaffirming that internal report of wrongdoing does not

trigger Act’s protection unless it is made directly to authority with outward-looking law enforcement

power). In Gentilello the court emphasized that the Act’s restrictive definition of “appropriate law

enforcement authority” is “tightly drawn” and centers on law enforcement, 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). Correspondingly, “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.” See Gentilello, 398 S.W.3d at 689 (emphasis

in original).

                The record fails to demonstrate that either Internal Audits or Legal Affairs possessed

the requisite outward-looking authority to constitute an “appropriate law enforcement authority”

under the Act, and Smith acknowledged as much in her deposition. Instead, she testified that she

believed that Internal Audits and Legal Affairs could forward her report to the authorities that could

prosecute or enforce the alleged violations. But even when an agency’s policy is to forward reports

to the agency’s enforcement arm, “reports up a chain of command” are not sufficient under the Act.

See Resendez, 450 S.W.3d at 522 (citing Okoli, 440 S.W.3d at 614 (collecting cases)). “When an

employee reports wrongdoing internally with the knowledge that the report will have to be forwarded

elsewhere . . ., then the employee is not reporting ‘to an appropriate law enforcement authority.’”

Okoli, 440 S.W.3d at 615 (emphasis in original). “Although such a policy permits employees to

reasonably believe reports will be sent to an appropriate law-enforcement authority, it provides no

reason to believe the reported-to supervisors are appropriate authorities.” Office of the Att’y Gen.

                                                  9
v. Weatherspoon, ___ S.W.3d ___, No. 14-0582, 2015 WL 5458683, at *2 (Tex. Sept. 18, 2015)

(emphasis in original). We do not believe that a reasonable employee in circumstances similar to

Smith’s would have believed that Internal Audits or Legal Affairs was an appropriate law

enforcement authority. See Gentilello, 398 S.W.3d at 682 (noting Act’s requirement that report

be made to one with “free-standing regulatory, enforcement, or crime-fighting authority”).

               On appeal, Smith relies principally on her argument that because Internal Audits and

Legal Affairs are part of the University of Texas System, and because the University of Texas

System also has as one of its components the University of Texas Police Department, Internal

Audits and Legal Affairs are “part of a state or local governmental entity” authorized to investigate

or prosecute a violation of criminal law. See Tex. Gov’t Code § 554.002(b)(2) (“appropriate law

enforcement authority” includes authority that is part of state or local governmental entity that

employee in good faith believes is authorized to investigate or prosecute violation of criminal

law). The supreme court has recently rejected a similar argument made by the employee in Office

of the Attorney General v. Weatherspoon. 2015 WL 5458683, at *3. In Weatherspoon, Ginger

Weatherspoon, who worked as an assistant attorney general in the Child Support Division of the

Office of the Attorney General, claimed to have had her employment terminated as a result of her

reporting alleged violations of criminal law by two senior attorneys to her managing attorney, to the

Child Support Director and the Deputy Director of Child Support, and to an attorney in the Open

Records Department. See id. at *1. Weatherspoon argued that because the Office of the Attorney

General has an Ethics Advisor, a Criminal Investigation Division, and statutory authority to

prosecute certain crimes, the Office of the Attorney General had the requisite outward-looking

                                                 10
authority such that her reports were made to an “appropriate law enforcement authority.” Id. at *3.

The supreme court held that this argument failed because “the authority of some OAG divisions

to investigate or prosecute crime does not transform the entire OAG into an appropriate law-

enforcement authority.” Id. The court stated that: “An entire agency does not become an appropriate

law-enforcement authority merely because some divisions have such power.” Id. Guided by this

supreme court precedent, we conclude that the existence of the University of Texas Police

Department within the University of Texas System does not make Internal Audits or Legal Affairs

“appropriate law enforcement authorities” under the Act.

                                         CONCLUSION

               Because Smith cannot establish that her actions satisfy the Act’s requirement that

she have made a report to an “appropriate law enforcement authority,” as that term is defined in

the Act, the University remains immune from this suit. Accordingly, we reverse the trial court’s

order denying the University’s plea to the jurisdiction, grant the plea, and dismiss Smith’s suit for

lack of subject-matter jurisdiction.

                                              _____________________________________________

                                              Scott K. Field, Justice

Before Justices Puryear, Pemberton, and Field

Reversed and Dismissed

Filed: November 25, 2015

                                                 11