Opinion issued July 3, 2014
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-13-00684-CV
———————————
THE UNIVERSITY OF HOUSTON, Appellant
V.
JOHN CASEY, Appellee
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Case No. 2012-38441
OPINION
This is an accelerated appeal from the trial court’s denial of the University of
Houston’s plea to the jurisdiction. The University argues that the trial court erred
in denying the plea because appellee John Casey did not satisfy the jurisdictional
prerequisites to suit under the Texas Whistleblower Act, TEX. GOV’T CODE ANN.
§ 554.002 (West 2012). We conclude that Casey failed to raise a material fact
issue regarding whether he had an objectively reasonable belief that his reports of
the alleged violations of law were made to an “appropriate law enforcement
authority.” Accordingly, we hold that the University’s sovereign immunity is not
waived and that the trial court erred in denying the University’s plea. We dismiss
the case for lack of subject-matter jurisdiction.
Background
Casey is a tenured Professor of Geology at the University and, in 1999,
began serving as the Chairman of the Department of Earth and Atmospheric
Sciences in the College of Natural Sciences and Mathematics. On August 17,
2011, Mark Smith, Dean of the College, removed Casey as Chairman because,
according to the University, Casey had an autocratic and abusive leadership style
and was unwilling to work with Dean Smith. But Dean Smith reappointed Casey
as Chairman through May 2012 to ease the transition to new leadership.
In October 2011, Janok Bhattacharya, another professor in the department,
told Casey that he had the opportunity to visit Venezuela as a paid consultant for a
Venezuelan oil company. Casey directed Bhattacharya to the University’s Manual
of Administrative Policies and Procedures (“MAPP”) and suggested that
Bhattacharya request an opinion from Human Resources and the Provost office
because Casey was concerned that the trip might violate University policy.
2
Bhattacharya received approval from Dean Smith and the Department’s Associate
Chair and traveled to Venezuela for 11 days.
Casey believed that Bhattacharya’s consulting trip violated MAPP and state
law. After Bhattacharya returned from Venezuela, Casey contacted Jane Olinger,
who was the Assistant Vice President for Faculty Affairs, Dona Cornell, who was
the Vice President of Legal Affairs of the University of Houston System and
General Counsel of the University, and Don Guyton, who was the Chief Audit
Executive for the University System. Casey inquired whether Bhattacharya’s trip
violated the University’s policy on paid consulting or state law. Guyton responded
that a “faculty member . . . who consults more than one day per week would have
to use ‘leave without pay’ or make up time in order to meet requirements of the
state law requiring all full-time benefits eligible employees to work 40 hours per
week.” Casey did not make any additional reports or contact anyone outside the
University.
On February 27, 2012, nearly three months after Casey contacted University
officials about Bhattacharya’s trip, Dean Smith removed Casey as Chairman of the
Department. On July 3, 2012, Casey sued the University, alleging that he was
removed, in violation of the Texas Whistleblower Act, from his position of
Department Chair in retaliation for reporting Bhattacharya’s consulting activities.
3
On June 21, 2013, the University filed a plea to the jurisdiction, contending
that its immunity was not waived and that the trial court lacked jurisdiction over
Casey’s whistleblower claim because Casey failed to report his concerns about
Bhattacharya to an appropriate law enforcement authority, as required by the Act.
In his response and supplemental response to the University’s plea, Casey argued
that Guyton and Cornell were appropriate law enforcement authorities. In support
of his argument, Casey attached the following evidence: (1) his affidavit, (2) three
University memoranda regarding “reporting of potential non-compliance,”
reporting “abuse, fraud, discrimination or retaliation,” and
“Reporting/Investigating Fraudulent Acts,” and (3) Guyton’s trial testimony and
deposition from another case, University of Houston v. Barth, 403 S.W.3d 851
(Tex. 2013). On July 15, 2013, the trial court held a hearing and denied the
University’s plea.
Discussion
In a single issue, the University contends that the trial court erred in denying
its plea to the jurisdiction because Casey failed to raise a material fact issue
regarding whether he had a good-faith belief that he made his report to an
appropriate law enforcement authority.
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A. Standard of Review
A plea to the jurisdiction challenges the trial court’s subject-matter
jurisdiction to hear a case. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554
(Tex. 2000); Kamel v. Univ. of Tex. Health Sci. Ctr., 333 S.W.3d 676, 681 (Tex.
App.—Houston [1st Dist.] 2010, pet. denied). The existence of subject-matter
jurisdiction is a question of law that we review de novo. State Dep’t of Highways
& Pub. Transp. v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002); Kamel, 333 S.W.3d
at 681.
When, as here, a plea to the jurisdiction “challenges the existence of
jurisdictional facts, we consider relevant evidence submitted by the parties when
necessary to resolve the jurisdictional issues raised, even where those facts may
implicate the merits of the cause of action.” City of Waco v. Kirwan, 298 S.W.3d
618, 622 (Tex. 2009) (internal quotation omitted). The plea to the jurisdiction
standard mirrors that of a traditional motion for summary judgment. Ross v.
Linebarger, Goggan, Blair & Sampson, L.L.P., 333 S.W.3d 736, 744 (Tex. App.—
Houston [1st Dist.] 2010, no pet.). When reviewing the evidence, we must take as
true all evidence in favor of the nonmovant and “indulge every reasonable
inference and resolve any doubts in the nonmovant’s favor.” Kirwan, 298 S.W.3d
at 622 (quoting Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d. 217, 228
(Tex. 2004)). If the evidence creates a fact question regarding jurisdiction, the trial
5
court cannot grant the plea to the jurisdiction, and the fact issue will be resolved by
the fact finder; however, if the relevant evidence is undisputed or fails to raise a
fact question on the jurisdictional issue, the trial court rules on the plea as a matter
of law. Miranda, 133 S.W.3d at 227–28; Kamel, 333 S.W.3d at 681.
B. Applicable Law
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 a 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.
TEX. GOV’T CODE ANN. § 554.002.
Pursuant to section 554.0035, “[a] public employee who alleges a violation
of this chapter may sue the employing state or local governmental entity for the
relief provided by this chapter.” Id. § 554.0035 (West 2012). Additionally, the
statute provides “[s]overeign immunity is waived and abolished to the extent of
liability for the relief allowed under this chapter for a violation of this chapter.” Id.
“A report of a violation of law under the Whistleblower Act must be in
‘good faith.’” City of Elsa v. Gonzalez, 325 S.W.3d 622, 626 (Tex. 2010). “Good
6
faith” in the Whistleblower Act context has both objective and subjective elements.
Univ. of Tex. Sw. Med. Ctr. at Dallas v. Gentilello, 398 S.W.3d 680, 683 (Tex.
2013). The employee “must have believed he was reporting conduct that
constituted a violation of law and his belief must have been reasonable based on
his training and experience.” Univ. of Houston v. Barth, 403 S.W.3d 851, 856
(Tex. 2013) (citing City of Elsa, 325 S.W.3d at 626); see TEX. GOV’T CODE ANN.
§ 554.002(a).
In the context of section 554.002(b), “good faith” means (1) the employee
believed the governmental entity was authorized to regulate under or enforce the
law alleged to be violated in the report, or 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.” Gentilello, 398 S.W.3d at 683. “[A]n
appropriate law-enforcement authority must be actually responsible for regulating
under or enforcing the law allegedly violated” and must have law enforcement
authority over “third parties” outside of the entity. Id. at 685–86. “It is not simply
an entity responsible for ensuring internal compliance with the law allegedly
violated.” Id. at 685. “Other states’ whistleblower laws accommodate internal
reports to supervisors; Texas law does not.” Id. at 682.
Under Texas law, “a whistleblower cannot reasonably believe his supervisor
is an appropriate law-enforcement authority if the supervisor’s power extends no
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further than ensuring the governmental body itself complies with the law.” Id. at
689. (Emphasis omitted). Thus, “an employer’s power to conduct internal
investigative or disciplinary procedures does not satisfy [the] standard for
appropriate law enforcement authority under the Act.” State v. Lueck, 290 S.W.3d
876, 886 (Tex. 2009) (citing Tex. Dep’t of Transp. v. Needham, 82 S.W.3d 314,
320–21 Tex. 2002)). “[L]odging 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.” Gentilello, 398 S.W.3d at 687.
Rather, “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.” Id. at 686;
see Ysleta Indep. Sch. Dist. v. Franco, 417 S.W.3d 443, 445 (Tex. 2013) (“[A]
report to someone charged only with internal compliance is jurisdictionally
insufficient under the Whistleblower Act.”); Canutillo Indep. Sch. Dist. v. Farran,
409 S.W.3d 653, 655 (Tex. 2013) (“‘Authority of the entity to enforce legal
requirements or regulate conduct within the entity itself is insufficient to confer
law-enforcement authority status’ under the Whistleblower Act.”) (quoting
Gentilello, 398 S.W.3d at 686). A supervisor is not an appropriate law-
8
enforcement authority where the supervisor lacks authority “to enforce the law
allegedly violated . . . against third parties generally.” Gentilello, 398 S.W.3d at
686. “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.” Id. at 686.
C. Analysis
The University contends that Casey’s reports to the University did not
constitute good-faith reports to appropriate law-enforcement authorities because no
evidence suggests that Casey reasonably believed that Guyton, Cornell, or Olinger
had authority to (1) regulate under or enforce the law purportedly violated or
(2) investigate or prosecute suspected criminal wrongdoing. Casey contends that
the trial court correctly denied the University’s plea because he “reported fraud and
theft to Guyton and Cornell, authorities designated by the University to investigate
criminal activity and to regulate under or enforce the law alleged to be violated in
the report.”
The Texas Supreme Court recently underscored its earlier holdings that
reports to employees having authority to enforce internal compliance and lacking
authority over third parties cannot satisfy the Act’s jurisdictional requirements.
9
See Gentilello, 398 S.W.3d at 688. In that case, Gentilello, who was a doctor,
reported an alleged violation of federal law to another doctor who was the Clinical
Department Chair responsible for ensuring that the hospital in which they both
worked complied with Medicare and Medicaid law. Id. at 682. But the evidence
showed that the department chair’s power extended only “to urge compliance or
purge noncompliance.” In other words, his authority was “purely internal” and did
not relate to third parties. Id. at 684. The Gentilello Court held that “[a]uthority of
the entity to enforce legal requirements or regulate conduct within the entity itself
is insufficient to confer law-enforcement status.” Id. at 686. Making internal
reports to employees responsible for internal compliance does not satisfy the
Whistleblower Act’s jurisdictional requirement that the “report [be] made to an
appropriate law enforcement authority.” Id. at 688.
Having reviewed all of the evidence, we conclude that under Gentilello,
Casey failed to raise a material fact issue regarding whether he had a reasonable
belief, based on his training and experience, that Guyton or Cornell was an
appropriate law enforcement authority under the Texas Whistleblower Act. 1
1. The University’s Evidence
In support of its plea, the University offered the affidavits of Guyton,
Cornell, and Olinger to demonstrate that they have no law enforcement authority as
1
In his petition, Casey alleged that he also made reports to Olinger. But Casey
adduced no evidence regarding Olinger in response to the University’s plea.
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to any third parties outside the University. Guyton averred that he is “the Chief
Audit Executive of the Internal Auditing Department of the University of Houston
System,” and is “responsible for managing the activities of the Internal Auditing
Department.” Cornell averred that she is “responsible for all legal matters
affecting the System and each of its campuses,” including transactional matters,
compliance and ethics, athletics and student issues, and many other legal matters
affecting the University. Olinger averred that she is an “Assistant Vice President
for Faculty Affairs” and “facilitate[s] the administrative processing of faculty
appointments . . . [and] review[s] and analyze[s] relevant academic policies and
procedures, as needed.”
In their respective affidavits, Guyton, Cornell, and Olinger each averred: “I
have no authority to investigate or prosecute alleged violations of criminal law, nor
do I have the authority to regulate under or enforce any laws . . . I have no
authority to enforce, regulate, investigate, or prosecute violations of law against
any third parties outside of UH, and I have no authority to promulgate regulations
governing the conduct of such third parties.”
2. Casey’s Evidence
In his response to the University’s plea, Casey proffered his affidavit, three
University memoranda that he had received before reporting Bhattacharya’s
11
allegedly improper consulting trip, and Guyton’s testimony from Barth. We
consider these in turn.
Casey’s affidavit constitutes evidence that he subjectively believed that
Guyton and Cornell were appropriate law enforcement authorities under the Act.
But “good faith” in the Whistleblower Act context has both subjective and
objective components. Gentilello, 398 S.W.3d at 683. To meet the objective
component, Casey bore the burden to adduce evidence raising a material fact issue
regarding whether his belief was reasonable in light of his training and experience.
See id. (honest belief that person was appropriate law enforcement authority can
only satisfy good-faith requirement “if a reasonably prudent employee in similar
circumstances” would have thought so); Franco, 417 S.W.3d at 445–46 (plaintiff
failed to adduce evidence that raised a fact issue about whether his belief was
objectively reasonable); see also Ortiz v. Plano Indep. Sch. Dist., No. 02-13-
00160-CV, 2014 WL 24227, at *3 (Tex. App.—Fort Worth Jan. 2, 2014, pet.
denied) (applying Barth and Gentilello and holding trial court properly granted
plea because Ortiz failed to raise a fact issue regarding whether board to whom she
reported had appropriate law enforcement authority).
Casey offers the three memoranda and Guyton’s testimony from Barth as
evidence that he raised a fact issue as to the objective element of the inquiry. We
conclude that this evidence is insufficient to defeat the plea, because none of it
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raises a material fact issue regarding whether Casey’s belief that Cornell and
Guyton had law enforcement authority as to third parties was reasonable based on
his training and experience.
Casey averred that he has no legal training and that his “subjective good
faith believe is based on objective information and documents that [he] received as
a UH employee”: (1) a University memorandum entitled “Institutional Compliance
Program,” (2) a one-page electronic message from the Chancellor, Renu Khator,
regarding “Zero Tolerance for Improper Conduct,” and (3) the University’s System
Administrative Memorandum, entitled “Reporting/Investigating Fraudulent Acts.”
These three memoranda focus on internal compliance and direct employees to
report illegal activity, including fraud, internally, to University officials. Notably,
the memorandum entitled “Reporting/Investigating Fraudulent Acts,” states that
the University will forward information of suspected fraud to the “appropriate
authorities for criminal prosecution” and that “[l]aw enforcement will investigate
and refer to their jurisdiction of a magistrate/district attorney.” 2 Nothing in these
memoranda suggests that University officials have authority to enforce or
promulgate laws against third parties outside the University; rather, the memoranda
2
Casey also argues that Guyton is “part of the Texas State Auditor’s Office, which
is authorized to investigate suspected criminal activity.” But Casey adduces no
evidence to support his claim that Guyton is “part of” the SAO. In fact, Guyton’s
deposition testimony from Barth and the “Reporting/Investigating Fraudulent
Acts” memorandum state that if Guyton believes there is a loss to the University,
he will notify the SAO, which itself would decide whether to investigate.
13
merely state that University officials are responsible for and have authority to urge
internal compliance and purge noncompliance and may communicate alleged
violations to law enforcement authorities and potentially facilitate their
investigation. Accordingly, the memoranda do not raise a material fact issue as to
whether Guyton or Cornell has law enforcement authority against third parties.
See Gentilello, 389 S.W.3d at 687 (“[A]n entity capable only of disciplining its
employees internally is not an ‘appropriate law enforcement authority’ under the
Act.”); Canutillo ISD, 409 S.W.3d at 655 (policy authorizing internal auditor to
assist in investigation of suspected fraudulent activities did not transform auditor
into appropriate law enforcement authority). 3
Guyton’s deposition and trial testimony from Barth are likewise insufficient.
Casey argues that Guyton’s deposition testimony from Barth shows Guyton’s
department “is required to investigate suspected fraudulent activity, such as the
kind Dr. Casey reported.” In Barth, the Texas Supreme Court dismissed a
University of Houston professor’s whistleblower claim where he made reports of
alleged violations of University policy and state law to four administrators,
3
Casey also argues that “Cornell is authorized to enforce or regulate the law
through her ability to file a civil action against third parties to recover any losses
incurred by UH as a result of criminal conduct, such as the kind Dr. Casey
reported.” But Casey does not explain, let alone adduce evidence to support, how
a policy discussing Cornell’s authority to bring or participate in civil litigation on
behalf of the University confers upon her law enforcement authority as against
third parties.
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including Guyton and the General Counsel. 4 The Court held that these
administrators were not “appropriate law enforcement authority” because none
“could have investigated or prosecuted criminal law violations against third parties
outside of the University” and none “could have enforced state law or regulations
regarding government contracts against any third party outside of the University.”
Barth, 403 S.W.3d at 857–58.
As a preliminary matter, Casey does not contend that he read Guyton’s
testimony from Barth before reporting the allegedly fraudulent conduct or that it
otherwise served as the basis for his belief that Guyton was an appropriate law
enforcement authority. Even if he had, Guyton’s testimony in Barth does not help
Casey. It merely underscores the point that agencies outside the University and
law enforcement authority are “the ones who actually investigate the criminal
activity” and that University officials may, but do not necessarily, facilitate their
investigation. Notably, the Barth Court held that this was insufficient to establish
jurisdiction:
[T]he fact that Guyton can “inquire” into allegations of malfeasance
does not mean that he can “regulate or enforce” the law, as required
by subsection 554.002(b)(1) of the Whistleblower Act. Further, Barth
provided no evidence that Guyton could have enforced state law or
regulations regarding government contracts against any third party
outside of the University.
Barth, 403 S.W.3d at 858.
4
Cornell was not the University’s General Counsel at the time.
15
Casey argues that Barth is distinguishable because the Supreme Court held
that the plaintiff’s “belief must have been reasonable based on his training and
experience.” See Barth, 403 S.W.3d at 856 (citing City of Elsa, 325 S.W.3d at
626). Casey contends he differs from Barth because, unlike Barth, he is not a
licensed attorney, has no legal training, and did not serve on the faculty senate.
But the Supreme Court has held that plaintiffs who, like Casey, lacked legal
training, education, or experience also failed to raise a fact issue about whether
their belief that the internal employee had law enforcement authority was
reasonable. See Canutillo ISD, 409 S.W.3d at 655 (plaintiff was school district’s
executive director of facilities and transportation); Tex. A&M Univ.-Kingsville v.
Moreno, 399 S.W.3d 128, 130 (Tex. 2013) (plaintiff was assistant vice president
and comptroller of university); Gentilello, 398 S.W.3d at 684 (plaintiff was
professor of surgery at university medical center); City of Elsa, 325 S.W.3d at 628
(plaintiff was city manager); Lueck, 290 S.W.3d at 885–86 (plaintiff was assistant
director of Texas Department of Transportation’s traffic analysis section);
Needham, 82 S.W.3d at 321 (plaintiff was crew chief in Texas Department of
Transportation’s Geodetic Control Section).
Similarly, Casey contends that this case is distinguishable from Gentilello
because, in Gentilello, the plaintiff reported the allegedly illegal conduct to a
supervisor, whereas Casey made reports about his supervisor to Guyton and
16
Cornell. But whether an employee reports allegedly fraudulent conduct to his
supervisor is not the relevant inquiry. Rather, we must determine whether a
whistleblower holds a reasonable belief that the person to whom he reports has law
enforcement authority against third parties. Gentilello, 398 S.W.3d at 689. We
conclude that it is inconsequential that Casey did not make the reports to his
supervisor. See Barth, 403 S.W.3d at 853, 857–58 (applying Gentilello where
employee reported supervisor to Guyton, general counsel, and other university
administrators); Moreno, 399 S.W.3d at 129–30 (applying Gentilello where
university comptroller reported to university president responsible for internal
compliance that employee’s supervisor engaged in unlawful conduct).
In sum, we conclude that Casey failed to raise a material fact issue regarding
whether he had a reasonable belief that Guyton or Cornell had law enforcement
authority against third parties. 5 See Barth, 403 S.W.3d at 858 (plaintiff failed to
meet objective component of good-faith test because adduced no evidence that his
belief that person to whom he reported had appropriate law enforcement authority
was reasonable); Gentilello, 389 S.W.3d at 686 (holding no jurisdiction where
5
Casey also contends that seven sections of the Texas Education Code confer upon
the University authority to regulate fraud and investigate or prosecute violations of
criminal law against third parties. Notably, Casey does not argue that he formed a
reasonable belief that Guyton or Cornell had such authority by reviewing the
Texas Education Code before reporting to them. In any event, these statutes do
not confer upon the University law enforcement authority as defined by the
Whistleblower Act. See TEX. EDUC. CODE ANN. §§ 51.007, 51.108, 51.202,
51.244, 51.932(b), 51.935, 51.969 (West 2012).
17
person to whom employee reported “lacked any such power to enforce the law
allegedly violated or to investigate or prosecute criminal violations against third
parties generally.”).
Conclusion
We reverse the trial court’s order denying the University’s plea to the
jurisdiction, and render judgment granting the University’s plea to the jurisdiction
and dismissing the case for lack of subject matter jurisdiction with prejudice.
Rebeca Huddle
Justice
Panel consists of Justices Keyes, Sharp, and Huddle.
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