in Re Xerox Corporation and Xerox State Healthcare, LLC F/K/A ACS State Healthcare, LLC

ACCEPTED
03-15-00401-CV
7791561
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/12/2015 9:15:54 AM
JEFFREY D. KYLE
IN THE COURT OF APPEALS FOR THE CLERK

THIRD JUDICIAL DISTRICT OF TEXAS
FILED IN
3rd COURT OF APPEALS
DR. BEHZAD NAZARI, D.D.S. D/B/A AUSTIN, TEXAS
ANTOINE DENTAL CENTER ET. AL., 11/12/2015 9:15:54 AM
JEFFREY D. KYLE
Defendants-Appellants, Clerk

v.
STATE OF TEXAS,
Plaintiff-Appellee, Cause No. 03-15-00252-CV

v.
XEROX CORPORATION AND XEROX
STATE HEALTHCARE, LLC, F/K/A ACS
STATE HEALTHCARE, LLC,
Third-Party Defendants-Appellees.

IN RE XEROX CORPORATION AND
XEROX STATE HEALTHCARE, LLC Cause No. 03-15-00401-CV
F/K/A ACS STATE HEALTHCARE, LLC,
Relators.

Joint Motion to Modify Order Regarding Oral Argument
This joint motion requests modification of the Court’s October 28, 2015
order to clarify time for oral argument. The parties have agreed on an alloca-
tion that embraces both causes.

The Nazari appeal
Cause No. 03-15-00252-CV (the Nazari appeal) is an appeal in a civil
case. In the underlying action (district court case no. D-1-GN-14-005380),

plaintiff the State of Texas sues defendants Dr. Behzad Nazari et al. (“the

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dentist defendants”) alleging certain violations of the Texas Medicaid Fraud
Prevention Act. The dentist defendants filed (1) counterclaims against the

State and (2) third-party claims against Xerox (a former state contractor).
The district court granted the State’s plea to the jurisdiction asserting sov-
ereign immunity to the counterclaims against the State. The district court also

granted the State’s motion to dismiss the dentist defendants’ third-party
claims against Xerox, wherein the State asserted that the Texas Medicaid
Fraud Prevention Act does not authorize a defendant to bring third party

claims and that, in any event, the claims against Xerox are barred by sovereign
immunity. 1
On May 1, 2015, the dentist defendants appealed. The State of Texas and
Xerox are appellees. On appeal, the dentist defendants raise two arguments:
(1) that the trial court erred in dismissing their counterclaims against the State
because the State has waived sovereign immunity by bringing an affirmative
claim for relief, the counterclaims are compulsory, and counterclaims are per-
missible in this type of suit; and (2) that the district court erred in dismissing
their third-party claims against Xerox because third-party claim are likewise

permissible.
Xerox’s appellate brief argues that (1) the Texas Rules of Civil Procedure
and Chapter 33 of the Texas Civil Practice & Remedies Code apply to the
State’s claim, and (2) that any holding that the State has waived sovereign

1
The State adopted by reference the arguments it raised in briefing to the trial court in its
separate suit against Xerox, which resulted in an order that is the subject of Xerox’s man-
damus proceeding.

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immunity by bringing an affirmative claim for relief should be limited to the
State, because Xerox has not brought any claims in this suit.

The State (1) argues that sovereign immunity bars the counterclaims, and
(2) argues that this Court lacks jurisdiction over the interlocutory appeal from
the order dismissing the dentist defendants’ third-party claims against Xerox

and, in any event, those claims were properly stricken.
The In re Xerox Corporation mandamus petition
Cause No. 03-15-00401-CV (In re Xerox Corporation) is a mandamus

proceeding. The petition seeks mandamus review of two orders issued by the
district court in a separate civil case (district court case no. D-1-GV-14-
000581). In that underlying action, plaintiff the State of Texas sues its former
contractor Xerox alleging certain violations of the Texas Medicaid Fraud Pre-
vention Act. Xerox filed third-party claims against the dentists and dental
practices who are defendants in the State v. Nazari action. Xerox also moved
for leave to designate responsible third parties under chapter 33 of the Civil
Practice and Remedies Code. The district court struck the third-party claims
and denied the chapter 33 motion.

On July 1, 2015, Xerox filed an original mandamus proceeding in this
Court seeking review of those orders. In that proceeding, Xerox is the relator
and the State is the real party in interest. Xerox argues that the district court
erred because Chapter 33 applies to the State’s claim under the Texas Medi-
caid Fraud Prevention Act and that it lacks an adequate remedy by appeal. The
State disagrees.

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 The Court’s Order Regarding Oral Argument
Xerox filed in the Nazari appeal an unopposed motion to consolidate the

above-described causes for purposes of oral argument only. The motion stated
the State’s position “that the In re Xerox Corporation petition should be de-
nied without oral argument,” while also expressing Xerox’s and the Nazari

parties’ position that “hearing argument on both matters would make sense,
given the overlap on the underlying legal issues.” Oct. 13, 2015 Mot. ¶ 2. The
motion requested that, if oral argument is held in the mandamus proceeding,

the Court “set both causes for submission for oral argument on the same day.”
Id. ¶ 4.
On October 28, 2015, this Court granted Xerox’s motion. Referencing
both appellate causes described above, the order states:

Appellees Xerox Corporation and Xerox State Healthcare, LLC’s
Unopposed Motion to Consolidated Causes for Submission on Oral
Argument was granted by this Court on the date noted above. Accord-
ingly, you are hereby notified that the above causes have been consol-
idated for purposes of oral argument and have this day been set for
submission and oral argument on December 16, 2015 at 1:30 PM, be-
fore Justices Puryear, Goodwin, and Bourland. Argument is limited to
20 minutes for appellants and for appellees.
Oct. 28, 2015 Order at 2 (underlining and bolding removed).
Request for Modification and Proposed Allocation of Time

Xerox and the Nazari parties agree that this order grants oral argument in
both causes. The Court’s order states that “the above causes have been con-
solidated for purposes of oral argument and have this day been set for submis-
sion and oral argument.” The State agrees that the Court’s docket reflects that

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ruling, although the State perceives ambiguity and would welcome clarifica-
tion given that the Court’s order purports only to grant an unopposed motion

that did not express the State’s agreement to setting the mandamus petition
for oral argument and given that the order does not mention a “relator” or “real
party in interest” in assigning argument time.

Assuming the Court has set both causes for oral argument, the parties con-
cur in requesting clarification of the Court’s intended allocation of time. The
parties have conferred about an order of argument and time allocation for this

scenario and jointly propose the following ordering and time allocation:
No. 03-15-00401-CV, In re Xerox Corporation:
Xerox: 15 minutes
State of Texas: 20 minutes
Xerox rebuttal: 5 minutes

No. 03-15-00252-CV, State v. Nazari:
Nazari: 12 minutes
Xerox: 6 minutes
State of Texas: 17 minutes
Nazari rebuttal: 5 minutes

This allocation of time ensures that the Court will have full argument time for
both proceedings, assuming both are set for argument.

Xerox and Nazari parties’ statement of justification
If the Court’s order allocated only 40 minutes for both proceedings, the
Court should grant the standard amount of oral argument time for each cause.

This request is justified by the following reasons.
First, Xerox’s original proceeding involves an issue common to both
cases and thus will assist the Court with understanding the entire landscape of

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this complex litigation. Specifically, the proceeding raises the issue of
whether the State’s claim (its sole claim in both proceedings) is a tort claim

subject to Chapter 33.
In the State’s suit against Xerox, this claim has stakes of more than $1
billion. In the State’s suit against the Nazari Appellants, this claim has stakes

of more than $400 million. Given the significance of this issue for both cases,
and given the unusually high stakes in each lawsuit, Xerox and the Nazari
parties respectfully submit that the standard amount of oral argument time is

necessary to fully explore the issue. Further, it makes sense to hear this argu-
ment first, as it will lay the groundwork common to both proceedings.
Second, the Nazari interlocutory appeal involves multiple complex is-
sues. The threshold issue for the Court is whether the State has waived sov-
ereign immunity by bringing a claim for affirmative relief against the Nazari
parties. That issue alone is worthy of the full amount of argument time. The
appeal also involves questions of whether third-party claims can be brought
in a suit where the State has asserted a claim under the Texas Medicaid Fraud
Prevention Act.

Third, these two cases demonstrate the tripartite relationship of the par-
ties. Holding both arguments within the time constraints for one oral argu-
ment would very likely deprive the Court of full answers from each of the
three perspectives. Xerox and the Nazari parties agree that it would best assist
the Court in understanding the issues if the oral arguments are held consecu-
tively and each given the standard amount of time.

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 State of Texas’s statement of justification
The State of Texas does not agree with all aspects of Xerox and the

Nazari parties’ argument and characterizations in their statement of justifica-
tion above, and the State does not join in that statement. See supra pp. 5-6.
The State also finds it unclear, for the reasons noted above, whether the

Court’s order actually reflects a decision to set both causes for argument.
Nonetheless, if the Court has or does now determine that oral argument would
be appropriate on the mandamus petition, the State agrees that the above-de-

scribed allocation of time best allows the parties to present their arguments
and will eliminate confusion arising from the October 28 order, regarding
questions such as the amount of time assigned to Xerox as an appellee in one
cause and as the relator in the other cause.
Conclusion
For the reasons explained above, the parties jointly request modification
of the Court’s October 28, 2015 order regarding oral argument.

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 Respectfully submitted.

Counsel for the State of Texas:

CHARLES E. ROY SCOTT A. KELLER
First Assistant Attorney General Solicitor General

/s/ Raymond C. Winter /s/ J. Campbell Barker
RAYMOND C. WINTER J. CAMPBELL BARKER
Chief, Civil Medicaid Fraud Deputy Solicitor General
State Bar No. 2179195 State Bar No. 24049125
cam.barker@texasattorneygeneral.gov
REYNOLDS B. BRISSENDEN
Assistant Attorney General PHILIP A. LIONBERGER
State Bar No. 24056969 Assistant Solicitor General
State Bar No. 12394380

Office of the Attorney General
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1700
Fax: (512) 474-2697

Counsel for Xerox:

ERIC J.R. NICHOLS /s/ Constance H. Pfeiffer
State Bar No. 14994900 CONSTANCE H. PFEIFFER
enichols@beckredden.com State Bar. No. 24046627
GRETCHEN SWEEN cpfeiffer@beckredden.com
State Bar No. 20041996 BECK REDDEN LLP
gsween@beckredden.com 1221 McKinney St., Ste. 4500
CHRISTOPHER R. COWAN Houston, Texas 77010
State Bar. No. 24084975 (713) 951-3700
ccowan@beckredden.com (713) 951-3720 (Fax)
BECK REDDEN LLP
515 Congress Ave., Ste. 1900
Austin, Texas 78701
(512) 708-1000
(512) 708-1002 (Fax)

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ROBERT C. WALTERS C. ANDREW WEBER
State Bar No. 20820300 State Bar No. 00797641
rwalters@gibsondunn.com andrew.weber@kellyhart.com
GIBSON, DUNN & CRUTCHER LLP KELLY HART & HALLMAN LLP
2100 McKinney Ave., Ste. 1100 301 Congress, Ste. 2000
Dallas, Texas 75201 Austin, Texas 78701
(214) 698-3100 (512) 495-6451
(214) 571-2900 (Fax) (512) 495-6930 (Fax)

Counsel for Dr. Behzad Nazari,
D.D.S., et al:

E. HART GREEN /s/ Jason Ray
State Bar. No. 08349290 JASON RAY
hartgr@wgttlaw.com State Bar. No. 24000511
WELLER, GREEN, TOUPS & jray@r-alaw.com
TERRELL, L.L.P. RIGGS & RAY, PC
P.O. Box 350 506 W. 14th Street, Suite A
Beaumont, Texas 77704-0350 Austin, TX 78701
Tel.: (409) 838-0101 Tel.: (512) 457-9812
Fax: (409) 832-8577 Fax: (512) 457-9066

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 Certificate of Conference
The parties jointly request modification of the October 28, 2015 order.

/s/ J. Campbell Barker
J. CAMPBELL BARKER

Certificate of Service
I certify the service of this document on November 11, 2015 by electronic
case filing or e-mail upon the following:

Counsel for Xerox:

Eric J.R. Nichols Constance H. Pfeiffer
Gretchen Sween Beck Redden LLP
Christopher R. Cowan 1221 McKinney St., Ste. 4500
Beck Redden LLP Houston, Texas 77010
515 Congress Ave., Ste. 1900
Austin, Texas 78701

Robert C. Walters C. Andrew Weber
Gibson, Dunn & Crutcher LLP Kelly Hart & Hallman LLP
2100 McKinney Ave., Ste. 1100 301 Congress, Ste. 2000
Dallas, Texas 75201 Austin, Texas 78701

Counsel for Dr. Behzad Nazari,
D.D.S., et al:

E. Hart Green Jason Ray
State Bar. No. 08349290 Riggs & Ray, PC
hartgr@wgttlaw.com 506 W. 14th Street, Suite A
Weller, Green, Toups & Terrell, Austin, TX 78701
L.L.P.
P.O. Box 350
Beaumont, Texas 77704-0350

/s/ J. Campbell Barker
J. CAMPBELL BARKER

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