Electronic Data Systems Corporation v. Mississippi Division of Medicaid

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2001-CA-01941-SCT

ELECTRONIC DATA SYSTEMS CORPORATION

v.

MISSISSIPPI DIVISION OF MEDICAID, RICA LEWIS-
PAYTON, IN HER OFFICIAL CAPACITY AS
EXECUTIVE DIRECTOR OF THE DIVISION OF
MEDICAID, AND CONSULTEC, LLC

DATE OF JUDGMENT: 12/06/2001
TRIAL JUDGE: HON. DENISE OWENS
COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT: STEVE J. ALLEN
EDMUND L. BRUNINI, JR.
ATTORNEYS FOR APPELLEES: JOHN L. MAXEY, II
DONNA ROSS PHILIP
OFFICE OF THE ATTORNEY GENERAL
BY: HAROLD PIZZETTA, III
GWENDOLYN G. COMBS
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: AFFIRMED - 09/11/2003
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

EN BANC.

CARLSON, JUSTICE, FOR THE COURT:

¶1. Aggrieved by the chancellor’s entry of a final judgment affirming the Division of Medicaid’s award

of its fiscal agent contract to Consultec, LLC, Electronic Data Systems Corporation has appealed, asserting

several errors supposedly committed by the chancellor. Upon a careful review of the record and
consideration of the applicable law, we find no reversible error and thus affirm the final judgment of the

Chancery Court of the First Judicial District of Hinds County.

FACTS AND PROCEEDINGS IN THE ADMINISTRATIVE
AGENCY AND THE CHANCERY COURT

¶2. Electronic Data Systems Corporation (EDS) had served as the fiscal agent for the Mississippi

Division of Medicaid (DOM) since 1994. DOM is but one of many state administrative agencies required

to procure personal and professional services, such as fiscal agent services, pursuant to the State of

Mississippi Personal Service Contract Procurement Regulations (PSCPR), which provides that the

contracting for such services may be accomplished by (1) “Competitive Sealed Bids,” (2) “Competitive

Sealed Proposals,”(3) “Small Purchases,” (4) “Sole-Source Procurement,” or (5) “Emergency

Procurement.”1

¶3. EDS was initially awarded the DOM fiscal agent contract in 1994 using the sole-source

procurement method.2 The primary task of the DOM fiscal agent is to maintain and operate DOM’s

Medicaid Management Information System (MMIS), which consists of computer hardware and software

used to process the numerous “Medicaid claims from providers of medical care and services for the

medical care and services furnished to recipients under the medical assistance program.”

¶4. Helen Wetherbee (Wetherbee) was the DOM Executive Director until August 13, 1999. While

Wetherbee was Executive Director of DOM, she was responsible for submitting to the Health Care

Financing Administration (HCFA), the federal source of financial assistance, DOM's Advanced Planning

1
The Personal Service Contract Procurement Regulations (PSCPR) define these five terms and
likewise contain provisions governing which of the five methods should be utilized.
2
The PSCPR defines sole-source procurement as follows: “A contract may be awarded for
contracts without competition when the head of a purchasing agency, or a designee determines in writing
that there is only one source for the required service.”

2
Document (APD) for certain vendor services. An APD is a concise written "plan of action" submitted by

a state division of Medicaid seeking federal funding from HCFA to determine need, feasibility and cost

factors for the acquisition of automatic data processing equipment or services. The APD submitted by

Wetherbee was dated May 4, 1999, and sought permission from HCFA "to request proposals for Fiscal

Agent services for the period January 1, 2001, through June 30, 2005." HCFA approved the DOM's APD

on May 18, 1999. Upon receiving HCFA approval of its previously submitted APD, DOM prepared and

issued a Request for Proposal (RFP) on July 1, 1999, inviting vendor proposals for the contract to serve

as DOM's fiscal agent.3 Three parties submitted proposals in response to the RFP, EDS (the incumbent),

Unisys, and Consultec, LLC (Consultec).4 However, none of these parties met the minimum technical

scores for the RFP, and thus the procurement was cancelled by the Governor. DOM provided notice to

HCFA of the cancellation of the 1999 fiscal agent procurement. EDS’s contract was to expire by its terms

on December 31, 2000; therefore, because no new contract was awarded from the 1999 RFP, DOM

extended EDS's contract through December 31, 2001.

¶5. After leaving DOM, Wetherbee went to work in the private sector before accepting a position as

Consultec's Account Manager in early 2001; however, employment with Consultec was contingent upon

Consultec being awarded the DOM contract. As a potential account manager, Wetherbee was required

to participate during portions of Consultec's preparation and presentation of materials in the oral interview

process in the bid for DOM's fiscal agent contract.

3
According to the PSCPR, when the head of a purchasing agency, or that person’s designee,
makes a determination “that the use of competitive sealed bidding is either not practicable or not
advantageous to the State, a contract may be entered into by competitive sealed proposals,” which process
involves the issuance of a Request for Proposals (RFP).
4
Consultec’s successor company is ACS State Health Care.

3
¶6. Under a new agency administration with Rica Lewis-Payton (Lewis-Payton) serving as executive

director, DOM, as required by federal regulations, submitted to HCFA the 2000 RFP for review and

approval. By letter dated August 25, 2000, HCFA approved the 2000 RFP and thus, a new RFP was

once again issued on September 8, 2000, seeking vendor proposals for the DOM fiscal agent contract to

render services commencing on January 1, 2002. However, the new RFP was issued under the same APD

which had been utilized in issuing the 1999 RFP. DOM did not submit another APD or an APD update

to HCFA because, according to DOM officials, the federal funding limits had already been established.

This time only EDS and Consultec submitted bids.

¶7. On March 9, 2001, DOM stated its intent to award the fiscal agent contract to Consultec, which

would take over the fiscal agent services on January 1, 2002, while EDS would continue to serve out its

contract extension. Lewis-Payton informed the Personal Services Contract Review Board (PSCRB or

the “Board”) that there was little difference between the proposals submitted by EDS and Consultec.

However, Lewis-Payton stated Consultec submitted a bid $20 million lower than that submitted by EDS.

Consultec stated this bid was a "rock bottom" price with the expectation that it would receive additional

revenue from future enhancements of the contract.

¶8. As required by statute, DOM sought the approval of the PSCRB. Pursuant to Miss. Code Ann.

§ 25-9-120(3)(b), the PSCRB has the authority and responsibility to "[a]pprove all personal and

professional services contracts involving the expenditures of funds in excess of One Hundred Thousand

Dollars ($100,000.00)."5 The PSCRB also provides the standards for the "issuance of requests for

proposals, the evaluation of proposals received, consideration of costs and quality of services proposed,

5
According to the PSCPR, procurements of $100,000 or less would be classified as “small
purchases,” thus negating the need for PSCRB approval.

4
contract negotiations, the administrative monitoring of contract performance by the agency and successful

steps in terminating a contract." Id. § 25-9-120(3)(e). The PSCRB is also statutorily obligated to

"[d]evelop standards with respect to contractual services personnel which require invitations for public bid,

requests for proposals, record keeping and financial responsibility of contractors. . . ." Id. § 25-9-

120(3)(c). The PSCRB may, in its discretion, reserve the right to reject any or all bids. Id.

¶9. On March 15, 2001, the Board considered DOM's award of the fiscal agent contract to Consultec.

Included as part of the minutes of the Board's meeting was a letter from EDS’s counsel outlining EDS’s

concerns regarding Wetherbee's involvement and certain ethical violations EDS believed to have occurred

which would render an award of the contract to Consultec void.6 The gist of EDS’s concerns was whether

certain ethical standards had been violated due to Wetherbee having participated in the issuance of the first

RFP while at DOM, only to have her future employer, Consultec, be the ultimate successful bidder for the

DOM fiscal agent contract awarded pursuant to a separate RFP which was issued after Wetherbee had

left DOM, but under the same APD which had received HCFA approval while Wetherbee was still at

DOM. The Board determined this letter represented the only objection received regarding DOM's fiscal

agent contract. The Board then inquired as to whether the Ethics Commission had been consulted

regarding the issue raised in the letter. Gwen Combs, counsel for DOM, advised the Board that she had

consulted with certain individuals at the Mississippi Ethics Commission. Counsel for EDS requested that

6
At the subsequent chancery court hearing, EDS, through counsel, on more than one occasion,
attempted to make it abundantly clear what claims it was asserting against Wetherbee. In opening
statements before the chancellor, EDS’s attorney stated that the issue was whether “Wetherbee’s
participation as account manager in the Consultec bid....constitute[d] a statutory violation” and a violation
of “certain regulations in the procurement process.” Later on in his opening statements, EDS’s counsel
stated that EDS was “asking [the chancellor] to review very closely the issue of whether or not Consultec
should be entitled to benefit from the violation of [Miss. Code Ann. § 25-4-105]; and...whether or not
[Consultec] can violate as a responsive bidder...if in fact [Consultec] violated the procurement regulations.”

5
the Board postpone taking any action regarding the fiscal agent contract until such time as all the parties

were able to address each issue of concern with the award of the contract. However, the Board

determined that DOM had complied with all rules and regulations required by the PSCRB; therefore, in

the Board’s opinion, no issues presented before the Board justified postponing taking action regarding the

contract. At the conclusion of that portion of the meeting pertaining to this contract, the PSCRB approved

DOM's award of its fiscal agent contract to Consultec.

¶10. On May 1, 2001, EDS filed a complaint in the Hinds County Chancery Court disputing DOM's

decision to award its fiscal agent contract to Consultec. EDS filed its original complaint against DOM and

Consultec alleging that by Consultec’s hiring Helen Wetherbee as account manager, Consultec violated

state laws as well as DOM's RFP and the PSCPR. EDS argued that as a result of this alleged improper

hiring of Wetherbee, Consultec had an illegal competitive advantage with respect to other potential bidders

for the fiscal agent services contract.7 On June 4, 2001, DOM and Consultec filed separate answers

denying these allegations.

¶11. EDS amended its complaint several times. EDS's first amended complaint included an additional

claim that Consultec provided a deceptively low bid and planned to "backload" the contract with

exorbitantly priced future enhancements. EDS's second amended complaint expanded its theory of liability

to include alleged tortious actions by Consultec involving "breach of duty" to EDS under the Ethics in

Government Law, state procurement regulations, breach of duty of good faith, tortious interference with

7
Prior to calling Helen Wetherbee as an adverse witness in its case-in-chief, EDS, through counsel,
informed the chancellor that EDS would stipulate “that Helen Wetherbee other than accepting the
employment both contingently and ultimately was wrong, and participating in the orals in the manner she
did was wrong.” Other than the alleged statutory and regulatory violations, EDS stipulated that Wetherbee
“didn’t do anything improper by helping Consultec” because EDS did not claim to have any evidence “that
Consultec [ever] asked [Wetherbee] for inside information.”

6
contract and prospective business relations and negligent or intentional misrepresentations. The third

amended complaint added Lewis-Payton, in her official capacity as DOM Executive Director, as a party

defendant. EDS also included a charge of breach of implied contract against DOM in awarding the

contract to Consultec, which EDS claimed created a situation wherein Consultec became a non-responsive

bidder.

¶12. On July 13, 2001, Consultec moved for the issuance of a protective order precluding the disclosure

of trade secrets and other confidential information which was not publicly available to EDS, its major

competitor. After issuing its original order which concluded that the confidential information would be

provided, but only to EDS attorneys, the chancellor issued a modified protective order finding Consultec's

pricing models to be sufficiently sensitive to the competitive business in which both Consultec and EDS

engaged such that it was necessary to protect them from disclosure.

¶13. On October 10, 2001, EDS filed a Petition for Cancellation of Fiscal Agent Contract before the

PSCRB. EDS made a presentation before the Board on October 11, 2001. DOM and Consultec moved

to stay the action in chancery court in light of EDS's attempt to obtain relief from the PSCRB, and EDS,

therefore, withdrew its petition before the PSCRB.

¶14. By joint stipulation filed October 23, 2001, the scope of litigation in chancery court was narrowed

as EDS and Consultec dismissed all claims and counterclaims for damages without prejudice against each

other, but EDS preserved its claim for injunctive relief. Basically, EDS requested the chancery court to

afford injunctive relief by prohibiting Consultec from assuming its role as fiscal agent under the newly

awarded contract, and to likewise find that Wetherbee had committed various ethical violations by being

involved as an employee of Consultec concerning the successful bid for DOM fiscal agent after having been

involved with the initial 1999 RFP process in her then official capacity as DOM Executive Director.

7
¶15. A chancery court hearing was commenced on October 31, 2001, on the motions for summary

judgment filed by EDS, DOM and Consultec, as well as EDS's motion for injunctive relief and the motions

to dismiss filed by DOM and Consultec. From the opening statements of all parties, there was an issue as

to whether the chancellor should conduct the hearing as an administrative appeal pursuant to the applicable

statutes; however, over the course of the two day hearing, the chancellor did receive extensive sworn

testimony from various witnesses. In opening statements, counsel for EDS proceeded to address all issues

raised in its original complaint and amended complaints.

¶16. During the questioning of Rica Lewis-Payton, DOM Executive Director, she testified that once she

was informed of Helen Wetherbee's proposed participation as account manager for Consultec, she

discussed the matter with DOM's attorney, Gwen Combs, who in turn discussed the matter with the Ethics

Commission personnel. Combs stated the Ethics Commission could not provide a written opinion on

prospective employment, but advised that based on the facts presented, there were no ethical violations.

¶17. On December 6, 2001, the chancellor issued an order and final judgment determining that the

matters before the court were essentially appellate in nature; therefore, the case would be treated as an

administrative appeal. After conducting an independent review of the record, the chancellor concluded

that DOM’s decision to award the fiscal agent contract to Consultec was based upon substantial evidence.

The chancellor found the use of the same APD was not fatal error which would require finding the contract

to be void. The chancellor also found the 1999 and 2000 RFPs to be separate and distinct.

¶18. The chancellor next determined EDS failed to meet its burden of proof as to its claim of a due

process violation in that EDS failed to establish a property interest and EDS failed to show that property

interest was deprived under color of state law. The chancellor also found DOM, the office of the

Governor, the State of Mississippi and Rica Lewis-Payton, in her official capacity, to be immune from suit

8
because they were not "persons" subject to suit under 42 U.S.C. § 1983. The chancellor found that

because there was no continuing violation of a federal law, EDS was not entitled to injunctive relief.

¶19. The chancellor also determined DOM made an informed decision, supported by substantial

evidence, based on its best interpretation of the statutes. The chancellor found no evidence that DOM acted

arbitrarily or capriciously in awarding the fiscal agent contract to Consultec.

¶20. The final issue before the chancellor was whether an injunction pending an appeal should be issued.

The chancellor first determined EDS failed to establish that a substantial likelihood existed that EDS would

prevail on the merits. The chancellor then determined EDS's argument that an injunction was necessary to

prevent irreparable injury8 lacked merit in light of the fact that EDS claimed to be entitled to monetary

damages. The chancellor found that the balance of harms factor weighed in favor of DOM because the

additional harm to the State if the contract was not implemented on time had to be considered as well as

the unemployment of workers for both EDS and Consultec. Finally, the chancellor determined EDS failed

to prove that the issuance of a preliminary injunction or injunction pending appeal would be consistent with

the public interest. Based on all relevant factors, the chancellor denied EDS's motion for a preliminary

injunction or injunction pending appeal.

¶21. On December 17, 2001, EDS timely perfected an appeal to this Court from the chancellor’s

adverse ruling. On December 18, 2001, EDS moved this Court for an injunction pending appeal pursuant

to M.R.A.P. 8(c) to prevent Consultec's takeover of DOM's fiscal agent contract which was scheduled

for January 1, 2002. On December 20, 2001, this Court, sitting in an emergency en banc session, entered

8
"Irreparable damages" in the context of an injunction are defined as "damages for which no certain
pecuniary standard exists for measurement." Black's Law Dictionary 391 (6th ed. 1990).

9
an order denying EDS's motion for an injunction pending appeal. Therefore, on January 1, 2002, Consultec

assumed the duties and responsibilities as DOM's fiscal agent.

¶22. In today’s appeal, EDS raises the following six issues before this Court:

1. Whether the chancery court misapplied the standard of review in determining whether
Divisionof Medicaid Executive Director Helen Wetherbee's involvement in DOM's 1999-
2001 fiscal agent source solicitation and selection function ("Selection Process")
disqualified Consultec, LLC and required DOM to award the fiscal agent contract to
Electronic Data Systems Corporation.
2. Whether, as a matter of law, Wetherbee acted in Consultec's behalf in connection with
or in relation to a decision she made, or a particular matter or proceeding in which she
participated personally and substantially, as DOM's Executive Director.
3. Whether Consultec was a non-responsive offeror.
4. Whether EDS is entitled to the fiscal agent contract and/or damages as a result of
DOM's having awarded the fiscal contract to a non-responsive offeror.
5. Whether the chancery court erred in dismissing EDS's 42 U.S.C. § 1983 claims.
6. Whether the chancery court erred in refusing to permit EDS discovery regarding the
costs and profit margins of Consultec.

¶23. DOM adds one additional issue in its Statement of Issues for this Court to consider:

7. Whether EDS failed to exhaust its remedies by timely prosecuting its appeal from the
adverse decision of the Personal Service Contract Review Board.

¶24. For sake of clarity, the issues identified by EDS and the DOM have been restated for

purposes of this opinion:

I. WHETHER THE CHANCERY COURT APPLIED AN IMPROPER
STANDARD OF APPELLATE REVIEW IN THIS CASE.

II. WHETHER THE CHANCERY COURT ERRED IN UPHOLDING
THE DEPARTMENT OF MEDICAID'S DECISION TO AWARD ITS
FISCAL AGENT CONTRACT TO CONSULTEC.

III. WHETHER THE CHANCERY COURT ERRED IN REFUSING TO
PERMIT EDS DISCOVERY REGARDING THE COSTS AND
PROFIT MARGINS OF CONSULTEC.

IV. WHETHER EDS FAILED TO EXHAUST ITS REMEDIES BY
TIMELY PROSECUTING ITS APPEAL FROM THE ADVERSE

10
 DECISION OF THE PERSONAL SERVICE CONTRACT REVIEW
BOARD.

DISCUSSION

I. WHETHER THE CHANCERY COURT APPLIED AN IMPROPER
STANDARD OF APPELLATE REVIEW IN THIS CASE.

¶25. EDS argues the chancery court applied an improper standard of review in this case. EDS asserts

there was a legal question based on undisputed facts concerning Helen Wetherbee's involvement on both

sides of the fiscal agent source solicitation and selection function. EDS now argues this Court must conduct

a de novo review of whether DOM properly awarded its fiscal agent contract to Consultec, giving no

deference to DOM, the Board or the chancery court. DOM argues the chancery court applied the correct

standard of review to this appeal from an administrative agency.

¶26. After conducting an independent review of the record, the chancellor determined the matters before

the court were appellate in nature, and the cause of action would, therefore, be treated as an administrative

appeal. In her Order and Final Judgment of the Court, the chancellor stated, inter alia:

This Court having heard testimony on these matters finds that the matters before this Court
are essentially appellate in nature and therefore will be treated as an administrative appeal.

****************
By joint stipulation filed October 23, 2001, the scope of the litigation was narrowed
considerably. Consultec and EDS dismissed all claims without prejudice as against each
other. The allegations once again constitute what essentially purports to be an appeal from
the DOM’s administrative agency decision awarding the contract to Consultec.

¶27. As always, one of our first concerns in considering any case before us is the appropriate standard

of review. Here, we are confronted with a case wherein the learned chancellor received extensive sworn

testimony over the course of a full two-day hearing and the record reveals the trial judge and the attorneys

pushed long and hard to conclude the hearing within that two-day period. Indeed, the record before us

reveals a somewhat hybrid proceeding wherein the chancellor clearly considered the administrative record

11
and likewise received testimony and additional exhibits at the two-day hearing. At the commencement of

the hearing, one of the attorneys for EDS stated in his opening statements to the trial court:

We are here now this morning to deal with EDS’s motion for preliminary
injunction/summary judgment, and say from the outset, Judge, that the way we view this
situation, the nature of the relief that we are requesting today and the nature of the
arguments that will be presented to you will suggest the possibility of this being more in the
nature of permanent relief than preliminary relief.

However, at the conclusion of the attorneys’ opening statements to the court, yet another

attorney for EDS stated:

Yes. Your Honor, as a preliminary matter, [DOM attorney] and I have reached a
stipulation that – and I think Consultec will probably agree with this too, that if the Court
considers this an administrative appeal, then the record that was proffered by [DOM
attorney] last week is the record upon which it will be considered. Now by so doing, we
don’t want – EDS does not waive its argument that that’s not how this should be treated,
but we have no objection to the admissibility of all that evidence no matter how the Court
treats it.

¶28. EDS, through its chancery court pleadings, initially sought injunctive and declaratory relief, but, as

already noted, numerous causes of action and claims for relief were subsequently added through the filing

of amended complaints. On October 31, 2001, the learned chancellor was confronted with a not-

uncommon occurrence for our trial judges, especially in emergency situations involving complex litigation

with numerous issues – a good faith pre-hearing effort by the court and counsel to narrow the issues into

a manageable format so that the court could fairly but efficiently deal with the relevant issues in the time

allotted based on the hectic schedules of the court and counsel. We deduce from the record before us that

at least one of the main reasons for the chancellor’s receiving testimony was to develop the record on

EDS’s request for injunctive relief as well as the parties’ motions and cross-motions for summary judgment.

However, we again note that EDS had no objection to the administrative record being received into

evidence at the chancery court hearing “if the [chancellor] considers this an administrative appeal,”although

12
EDS did not waive its right to object to the chancellor’s affording deferential appellate review by way of

a decision based on the administrative record. We do note the record reveals that toward the end of the

two-day chancery court hearing, DOM’s attorney stated:

Maybe I’m confused, but I thought we were here, while we have heard testimony on any
number of issues, with regard to focusing on whether there is an ethics in government
violation, and I fail to see how, while we’ve gotten off into future enhancements, how that
is in any way relevant to the question that I understood we were here to address today,
and that is, first, the question of whether there’s an ethics in government violation for the
purposes of preliminary injunctive relief and, secondly, whether if in fact those violations
did not exist, whether the Court is going to take this under advisement pursuant to review
of an agency action based on a differential standard.

EDS’s response to this objection was that DOM and Consultec had through the testimony of their

witnesses necessitated EDS’s cross-examination of a Consultec witness on certain issues. DOM’s attorney

disagreed with EDS’s explanation of the need to conduct cross-examination on certain issues, but in the

end, the chancellor permitted EDS’s cross-examination of a Consultec witness.

¶29. We conclude from the entire record before us that while the chancellor allowed a record to be

developed at the two-day hearing by way of the introduction of sworn testimony and exhibits since the

hearing involved not only the appellate review of an administrative agency, but also numerous other issues,

such as EDS’s request for injunctive relief, the chancellor did not err in ultimately concluding that the

matters before her were “essentially appellate in nature and therefore [would] be treated as an

administrative appeal.”

¶30. The standard of review on a decision of an administrative agency by an appellate court is found in

Tillmon v. Miss. State Dep't of Health, 749 So.2d 1017 (Miss. 1999):

This court generally accords great deference to the agency's interpretation of its own rules
and statutes which govern its operation. Mississippi State Tax Comm'n v. Mask,
667 So.2d 1313, 1314 (Miss. 1995). An appeal from an administrative agency is a limited
one. Mainstream Sav. & Loan Ass'n v. Washington Fed. Sav. & Loan Ass'n,

13
 325 So.2d 902, 903 (Miss. 1976). In reviewing decisions of administrative agencies, this
court will entertain the appeal only to determine: whether or not the order of the
administrative agency (1) was unsupported by substantial evidence, (2) was arbitrary and
capricious, (3) was beyond the power of administrative agency to make, or (4) violated
some statutory or constitutional right of the complaining party. Id. at 903; See also,
Mississippi Comm'n on Envtl. Quality v. Chickasaw County Bd. of
Supervisors, 621 So.2d 1211, 1215 (Miss. 1993).

Tillmon, 749 So. 2d at 1020-21. Review by the appellate court is limited to the record and to the

agency's findings. Miss. Comm'n on Envtl. Quality v. Chickasaw County Bd. of Sup'rs, 621

So.2d 1211, 1216 (Miss. 1993). See Miss. Employment Sec. Comm'n v. PDN, Inc., 586 So.2d

838, 840 (Miss. 1991); Barnett v. Miss Employment Sec. Comm'n, 583 So.2d 193, 195 (Miss.

1991); Ray v. Bivens, 562 So.2d 119, 121 (Miss. 1990). The appellate court may not reweigh the facts,

nor may it substitute its judgment for that of the agency. Chickasaw County Bd. of Sup'rs, 621 So.2d

at 1216. See Miss. Pub. Serv. Comm'n v. Merchants Truck Line, Inc., 598 So.2d 778, 782

(Miss. 1992); Miss. Pub. Serv. Comm'n v. Columbus & Greenville Ry., 573 So.2d 1343, 1346

(Miss. 1990); The lower tribunal is the trier of fact as well as the judge of the witnesses' credibility. Nelson

v. Miss. State Bd. of Veterinary Med., 662 So.2d 1058, 1062-63 (Miss. 1995).

This Court has held that "a holding which is supported by substantial evidence cannot be
arbitrary and capricious." McDerment [v. Mississippi Real Estate Comm'n], 748
So.2d at 119. Substantial evidence is defined as "evidence which is substantial, that is
affording a substantial basis of fact from which the fact in issue can be reasonably inferred."
Delta CMI v. Speck, 586 So.2d 768, 773 (Miss. 1991) (quoting State Oil & Gas
Bd. v. Mississippi Min. & Roy. Own. Ass'n, 258 So.2d 767 (Miss. 1971)).
Decisions which one could consider to be "fairly debatable" are not arbitrary or capricious.
City of Biloxi v. Hilbert, 597 So.2d 1276, 1281 (Miss. 1992).

Miss. Bureau of Narcotics v. Stacy, 817 So.2d 523, 526-27 (Miss. 2002).

¶31. Because the chancery court appropriately found from the record before it that the case was an

administrative appeal, the chancellor applied the correct standard of review in affirming the award of the

14
contract to Consultec, finding that DOM did not make its decision against the substantial weight of the

evidence. However, this Court must now determine whether the chancellor properly affirmed the award

of the contract to Consultec.

II. WHETHER THE CHANCERY COURT ERRED IN UPHOLDING
THE DIVISION OF MEDICAID'S DECISION TO AWARD ITS
FISCAL AGENT CONTRACT TO CONSULTEC.

A. Substantial Evidence

¶32. EDS argues Wetherbee acted as DOM's executive director and on Consultec's behalf within the

same particular matter in accordance with 18 U.S.C. § 207(a)(1)9 and 5 C.F.R. § 2637.201.10 EDS also

9
§ 207. Restrictions on former officers, employees, and elected officials of the executive and
legislative branches
(a) Restrictions on all officers and employees of the executive branch and
certain other agencies.--
(1) Permanent restrictions on representation on particular matters.--Any
person who is an officer or employee (including any special Government employee) of the
executive branch of the United States (including any independent agency of the United
States), or of the District of Columbia, and who, after the termination of his or her service
or employment with the United States or the District of Columbia, knowingly makes, with
the intent to influence, any communication to or appearance before any officer or employee
of any department, agency, court, or court-martial of the United States or the District of
Columbia, on behalf of any other person (except the United States or the District of
Columbia) in connection with a particular matter.
10
(a) Basic prohibition of 18 U.S.C. 207(a). No former Government employee,
after terminating Government employment, shall knowingly act as agent or attorney for, or
otherwise represent any other person in any formal or informal appearance before, or with
the intent to influence, make any oral or written communication on behalf of any other
person (1) to the United States, (2) in connection with any particular Government matter
involving a specific party, (3) in which matter such employee participated personally and
substantially as a Government employee. (b) Representation: Acting as agent or attorney,
or other representative in an appearance, or communicating with intent to influence--
(3) Appearances; communications made with intent to influence. An appearance occurs
when an individual is physically present before the United States in either a formal or
informal setting or conveys material to the United States in connection with a formal
proceeding or application.
(c) "Particular matter involving a specific party or parties"--

15
contends the 1999 and 2000 RFPs operated as a single decision to acquire services of a contractor. EDS

further argues that DOM did not prepare an APD or an APD update for HCFA approval because there

was no new or substantially changed project. EDS asserts because of these facts, Consultec was a non-

responsive offeror causing the contract to be void.

¶33. DOM argues this Court may not disturb the decision of the chancery court if it is valid and fairly

debatable. DOM also contends substantial evidence supports the chancellor's determination that the 1999

and 2000 procurements were distinct and separate.

¶34. The chancery court concluded that DOM's award of the fiscal agent contract to Consultec was

supported by substantial evidence. The chancery court also determined the PSCRB thoroughly considered

the ethical issues raised by EDS. In finding those issues were fairly debatable, the chancery court found

the decision to award the contract to Consultec was not arbitrary or capricious.

¶35. The chancery court found the use of the same APD was not a fatal error which would require the

contract to be cancelled. Even though Wetherbee participated in the preparation of the 1999 APD and

the subsequent issuance of the 1999 RFP, the chancellor could find no evidence that she either participated

in the 2000 RFP or attempted to influence DOM employees regarding the 2000 RFP. The chancery court,

therefore, determined the 1999 and 2000 RFPs to be separate and distinct.

¶36. This Court accords great deference to an administrative agency's construction of its own rules and

regulations and the statutes under which it operates. Melody Manor Convalescent Ctr. v. Miss.

(4) The same particular matter must be involved. The requirement of a "particular matter
involving a specific party" applies both at the time that the Government employee acts in
an official capacity and at the time in question after Government service. The same
particular matter may continue in another form or in part. In determining whether two
particular matters are the same, the agency should consider the extent to which the matters
involve the same basic facts, related issues, the same or related parties, time elapsed, the
same confidential information, and the continuing existence of an important Federal interest.

16
State Dep't of Health, 546 So.2d 972, 974 (Miss. 1989); Grant Ctr. Hosp. v. Health Groups of

Jackson Miss., Inc., 528 So.2d 804, 808 (Miss. 1988); State Tax Comm'n v. Edmondson, 196

So.2d 873 (Miss. 1967); Winston County v. Woodruff, 187 So.2d 299 (Miss. 1966). See also

Briscoe v. Buzbee, 163 Miss. 574, 143 So. 407 (1932). The burden of proof rests with the party

challenging the actions of an administrative agency. Melody Manor Convalescent Ctr., 546 So.2d at

974.

We have also held that we will not substitute our judgment for the judgment of an
administrative agency when the action of the agency is not arbitrary or unreasonable, and
when it is supported by substantial evidence. The only grounds for overturning
administrative agency action by the appellate process is that the state agency has acted
capriciously, unreasonably, arbitrarily; has abused its discretion or has violated a vested
constitutional right of a party. See State Board of Psychological Examiners v.
Coxe, 355 So.2d 669 (Miss. 1978); Mainstream Savings and Loan Association
v. Washington Federal Savings and Loan Association, 325 So.2d 902 (Miss.
1976); First National Bank of Vicksburg v. Martin, 238 So.2d 856 (Miss. 1970);
Eidt v. City of Natchez, 421 So.2d 1225 (Miss. 1982); City of Meridian v. Hill,
447 So.2d 641 (Miss. 1984).

Melody Manor Convalescent Ctr., 546 So.2d at 974. In Dep't of Health v. S.W. Miss. Reg'l

Med. Ctr., 580 So.2d 1238 (Miss. 1991), this Court stated:

An act is arbitrary when it is done without adequately determining principle; not done
according to reason or judgment, but depending upon the will alone,--absolute in power,
tyrannical, despotic, non-rational,--implying either a lack of understanding of or a disregard
for the fundamental nature of things.... An act is capricious when it is done without reason,
in a whimsical manner, implying either a lack of understanding of or a disregard for the
surrounding facts and settled controlling principles.

Id. at 1240 (quoting In re Housing Auth. of City of Salisbury, 235 N.C. 463, 468, 70 S.E.2d 500,

503 (1952)). See also Melody Manor Convalescent Ctr., 546 So.2d at 974; Miss. State Tax

Comm'n v. Dyer Inv. Co., 507 So.2d 1287, 1289 (Miss. 1987); State Bd. of Psychological

Examiners v. Coxe, 355 So.2d 669, 671 (Miss. 1978).

17
¶37. Miss. Code Ann. § 25-4-105 states in pertinent part:

(2) No public servant shall be interested, directly or indirectly, during the term for which
he shall have been chosen, or within one (1) year after the expiration of such term, in any
contract with the state, or any district, county, city or town thereof, authorized by any law
passed or order made by any board of which he may be or may have been a member.
(3) No public servant shall:
(e) Perform any service for any compensation for any person or business after termination
of his office or employment in relation to any case, decision, proceeding or application with
respect to which he was directly concerned or in which he personally participated during
the period of his service or employment.

¶38. In Huey Stockstill, Inc. v. Hales, 730 So. 2d 539 (Miss. 1998), an unsuccessful bidder

appealed the decision of a County Board of Supervisors. The circuit court determined the Board of

Supervisors took all steps necessary to avoid a possible conflict of interest by seeking the advice of the

Ethics Commission. Id. at 545. The circuit court concluded there was substantial evidence in the record

to support the actions of the Board, thus its actions were not arbitrary or capricious. Id. This Court,

finding that the actions of the Board were not arbitrary or capricious, affirmed the judgment of the circuit

court. Id. at 545-46.

¶39. Accordingly, we are of the firm opinion that the ethical issues raised regarding the award of the

fiscal agent contract to Consultec were thoroughly reviewed by both the chancellor and the PSCRB.

Those issues were certainly fairly debatable; therefore, DOM's decision to award the contract to Consultec

was supported by substantial evidence and was not arbitrary or capricious.

B. Violation of Constitutional Right

¶40. EDS argues the chancellor erred in dismissing its substantive due process claims pursuant to 42

U.S.C. § 1983.11 Because EDS sought an injunction to prevent ongoing violations of federal law and

11
42 U.S.C. § 1983 states in pertinent part:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of

18
because DOM and Lewis-Payton allegedly failed to follow state and federal law, EDS claims DOM and

Lewis-Payton are not immune from suit. EDS argues this federal violation stems from the reasonable

expectation that DOM would conduct source selection processes fairly and in accordance with state and

federal law. EDS contends these violations of essential standards of ethical conduct were under color of

state law. Therefore, EDS argues it is entitled to § 1983 injunctive relief pursuant to federally created

statutory rights.

¶41. DOM argues EDS's substantive due process claim must fail because EDS has no identifiable

property interest. DOM likewise asserts that EDS's argument regarding procedural regulations creating a

property interest is without merit because property interests are a creature of the state. DOM also argues

that DOM and Lewis-Payton are immune from suit in this case because neither DOM nor Lewis-Payton

is considered a "person" under 42 U.S.C. § 1983. DOM likewise asserts that because EDS seeks no

prospective injunctive relief based on a violation of federal law, EDS's substantive due process argument

is without merit.

¶42. The chancellor held EDS's constitutional claim failed because Consultec was not operating under

color of state law; it was simply exercising its right as a private business. The chancellor also held EDS

failed in proving that it had a property right in the future contract awarded to Consultec. The chancellor

determined DOM, the office of the Governor, the State of Mississippi, and Lewis-Payton, in her official

any State or Territory or the District of Columbia, subjects, or causes to be subjected, any
citizen of the United States or other person within the jurisdiction thereof to the deprivation
of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable
to the party injured in an action at law, suit in equity, or other proper proceeding for
redress, except that in any action brought against a judicial officer for an act or omission
taken in such officer's judicial capacity, injunctive relief shall not be granted unless a
declaratory decree was violated or declaratory relief was unavailable. . . .

19
capacity, were immune from the suit because suits against state agencies and their officers are suits against

the state which are barred by the Eleventh Amendment to the U.S. Constitution. The chancellor also found

that DOM, the office of the Governor, the State of Mississippi and Lewis-Payton, in her official capacity,

were not "persons" for the purposes of 42 U.S.C. § 1983. The chancellor found that because DOM was

not engaged in any continuing violation of federal law, EDS was not entitled to prospective injunctive relief

pursuant to Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908).

¶43. In Will v. Mich. Dep't of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed. 2d 45

(1989), the United States Supreme Court held that "neither a State nor its officials acting in their official

capacities are 'persons' under § 1983." See also Lofton v. United States, 785 So. 2d 287, 290 (Miss.

2001); Wright v. White, 693 So. 2d 898, 904-05 (Miss. 1997); Lawson v. State, 784 So. 2d 983,

984 (Miss. Ct. App. 2001). However, if a state official was sued in his or her official capacity for

declaratory or injunctive relief, that official would be considered a person under § 1983 because "official-

capacity actions for prospective relief are not treated as actions against the State." Will, 491 U.S. at 71

n.10 (citations omitted).

¶44. The United States Supreme Court has established two requirements for a section 1983 cause of

action for a due process violation. First, there must be a recognized liberty or property interest within the

purview of the Fourteenth Amendment. Bd. of Regents v. Roth, 408 U.S. 564, 571, 92 S.Ct. 2701,

2706. 33 L.Ed.2d 548 (1972). Second, a violation of the underlying constitutional right under color of

state law must be proven. Daniels v. Williams, 474 U.S. 327, 330, 106 S.Ct. 662, 664 88 L.Ed.2d

662 (1986). See also Wood v. Ostrander, 879 F.2d 583, 587 (9th Cir. 1989).

¶45. In Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976), a former police

officer brought action against the city, city manager and chief of police contending that his due process

20
rights were violated when he was discharged from his job. The officer, who "held his position at the will and

pleasure of the city," argued that his permanent classification gave him a "sufficient expectancy of continued

employment to constitute a protected property interest." Id. at 344-45. The Supreme Court found that the

officer was not deprived of a property interest protected by the Fourteenth Amendment upon his discharge.

Id. at 347.

In the absence of any claim that the public employer was motivated by a desire to curtail
or to penalize the exercise of an employee's constitutionally protected rights, we must
presume that official action was regular and, if erroneous, can best be corrected in other
ways. The Due Process Clause of the Fourteenth Amendment is not a guarantee against
incorrect or ill-advised personnel decisions.

Id. at 350.

¶46. In Bd. of Regents v. Roth, the Supreme Court held that an untenured state teacher did not have

a protected interest or the right to a hearing prior to the non-renewal of his contract. The Supreme Court

stated:

To have a property interest in a benefit, a person clearly must have more than an abstract
need or desire for it. He must have more than a unilateral expectation of it. He must,
instead, have a legitimate claim of entitlement to it.

408 U.S. at 577. Similarly, EDS has no protected interest in the renewal or award of DOM's fiscal agent

contract. Because EDS has failed to fulfill the first requirement of proving a section 1983 cause of action,

this Court need not address the alleged violation of such a property right.

¶47. We find that the chancellor correctly determined EDS failed to sufficiently prove it had a property

interest in DOM's awarding of the fiscal agent contract. The unilateral expectation of the contract is not

sufficient to fulfill the section 1983 requirement. Therefore, we further find that there was no constitutional

violation in DOM's award of the fiscal agent contract to Consultec.

C. Preliminary Injunction

21
¶48. EDS claims this issue of preliminary injunctive relief is moot. EDS contends the only remaining

question regarding an injunction is whether the chancellor should grant a permanent injunction to rescind

DOM's contract with Consultec. DOM argues that because this decision was one well within the

chancellor's discretion, the chancellor correctly denied EDS's motion for preliminary injunctive relief. DOM

also argues EDS should have sought a motion to stay instead of filing for preliminary injunctive relief.

¶49. In reviewing the issue of the preliminary injunction, the chancellor correctly applied the four-prong

test: (1) whether there exists a substantial likelihood that plaintiff will prevail on the merits; (2) the injunction

is necessary to prevent irreparable injury; (3) threatened injury to the plaintiffs outweighs the harm an

injunction might do to the defendants; and (4) entry of a preliminary injunction is consistent with the public

interest. City of Durant v. Humphreys County Mem'l Hosp./Extended Care Facility, 587

So.2d 244, 250 (Miss. 1991). After weighing each factor, the chancellor denied EDS's motion.

¶50. While we find from the record that the chancellor appropriately reviewed this issue before this case

was appealed and did not abuse her discretion in denying EDS’s motion for preliminary injunctive relief,

we also agree that EDS is correct in its assertion that the issue of a preliminary injunction is moot.

III. WHETHER THE CHANCERY COURT ERRED IN REFUSING TO
PERMIT EDS DISCOVERY REGARDING THE COSTS AND
PROFIT MARGINS OF CONSULTEC.

¶51. On July 13, 2001, Consultec filed a motion for a protective order to prevent the disclosure of

certain documents submitted by Consultec in response to a request for a proposal issued by DOM for its

fiscal agent contract. On July 25, 2001, EDS filed a motion to compel after Consultec refused to respond

to certain questions propounded to Consultec during discovery. In its requests for production, EDS

requested documents pertaining to Consultec's strategy for the preparation and calculation of the pricing

component, formulation of its technical component, and presentation of its bid; selection of Consultec's key

22
staff members; and all aspects of Consultec's implementation of the Health Insurance Portability and

Accountability Act (HIPAA) portion of the State Medicaid Administration Contract. EDS also requested

each of Consultec's bid proposals submitted in response to DOM's 1999 and 2000 RFPs. Consultec

opposed production of all of these documents citing certain trade secrets and confidential information.

Consultec moved the chancery court to enter a protective order to prevent Consultec from being required

to disclose any confidential information to EDS.

¶52. Although much of the information requested was proprietary and confidential in nature, the

chancellor granted EDS's motion to compel in part subject to limitations and restrictions outlined in the

protective order which was issued on August 16, 2001. The chancellor found the HIPAA issue to be

outside the scope of the pleadings. The chancellor also found the question regarding EDS employees who

had contacted Consultec about future employment to be irrelevant and outside the scope of discovery.

Following Miss. R. Civ. P. 26(d)(7) which provides that trade secrets may be disclosed in a designated

way, the chancellor granted Consultec's motion for a protective order to the extent that confidential

information was only to be released to "EDS attorneys and not officers, directors or agents of EDS, only

to the extent necessary to litigate this matter...."

¶53. On September 4, 2001, Consultec filed a motion to modify and clarify the chancellor's previous

protective order. Consultec first sought clarification of the chancellor's intentions regarding disclosure of

confidential documents and testimony to in-house EDS attorneys. Consultec moved that the disclosed

confidential documents be restricted to outside counsel and consultants retained by outside counsel in

regards to this litigation. Consultec also asked that the chancellor revisit the issue of the discoverability of

Consultec's pricing models used in the calculation of its pricing components for the 1999 and 2000 bids.

23
Consultec argued disclosure of this information to EDS would be detrimental to Consultec as EDS is

Consultec's primary competitor.

¶54. On September 14, 2001, the chancellor issued an order granting Consultec's motion. The

chancellor made clear that any person, in-house counsel or not, who was an officer, director or agent of

EDS, would be precluded from access to any information obtained during the course of this litigation which

was classified as confidential. The chancellor also determined Consultec provided sufficient evidence to

justify preventing disclosure of the pricing models at issue. The chancellor stated:

This court therefore finds that EDS has failed to establish a basis with which this court
should require Consultec to divulge its pricing plans. To require the release of confidential
information solely on the basis of alleged fraudulent activity without anything [sic] specific
facts to support the charges is inappropriate. To do so would establish that entities who
merely make allegations of fraudulent conduct against a company without any specific facts
to support such an allegation would be able to obtain the confidential proprietary
information from the accused party.

¶55. EDS now argues the chancellor improperly refused EDS any discovery regarding Consultec's bids

on the fiscal agent contract. EDS contends that in its second amended complaint, it asserted that Consultec

fraudulently underbid the contract and, therefore, tortiously interfered with EDS's contractual and

prospective business relations with DOM. EDS also argues that the information sought would prove a fact

of consequence to the pleaded claims; therefore, the information is relevant. EDS does not disagree that

the information sought is confidential; however, EDS contends confidentiality does not render documents

immune from discovery.

24
¶56. DOM argues EDS neither pled fraud with particularity as is required by Miss. R. Civ. P. 9(b),12

nor did EDS offer any proof which could be said to meet the clear and convincing standard of proof to

establish fraud.13 Therefore, according to DOM, EDS is not justified in its “invasive discovery request.”

DOM argues Consultec has already produced thousands of pages of confidential documents pursuant to

the chancellor's protective order. The only documents which have been withheld are Consultec's pricing

models which contain the most confidential information used by Consultec in preparing its bids. DOM

argues there was substantial evidence to support the chancellor's decision to exclude the pricing models

from discovery.

¶57. In regard to matters relating to discovery, the chancellor has considerable discretion. This Court

will not disturb discovery orders unless there has been an abuse of discretion. See Ill. Cent. R.R. v.

Winters, 815 So.2d 1168, 1172 (Miss. 2002); Dawkins v. Redd Pest Control, Inc., 607 So.2d

1232, 1235 (Miss. 1992).

The trial court's grant or denial of a motion to compel is subject to an abuse of discretion
standard of review on appeal. Taylor Machine Works, Inc. v. Great American
Surplus Lines Ins. Co., 635 So.2d 1357, 1363 (Miss.1994). "Where, however,
limitations on discovery are improvidently ordered or allowed and important information
is denied a litigant reversal will obtain." Dawkins v. Redd Pest Control Co., Inc., 607
So.2d 1232, 1235 (Miss. 1992). In Dawkins, guidelines were enumerated for
determining whether there was an abuse of discretion:
[A] trial court's discretion in the discovery area is generally guided by the
principles that (a) the court follow the general policy that discovery be
encouraged, (b) limitations on discovery should be respected but not

12
(b) Fraud, Mistake, Condition of the Mind. In all averments of
fraud or mistake the circumstances constituting fraud or mistake shall be
stated with particularity. Malice, intent, knowledge, and other conditions
of mind of a person may be averred generally.
13
See Martin v. Winfield, 455 So.2d 762, 764 (Miss. 1984) (citing Cotton v. McConnell, 435
So.2d 683, 685-89 (Miss. 1983); Franklin v. Lovitt Equipment Co., 420 So.2d 1370, 1373 (Miss.
1982)) ("Proving fraud is difficult, as it ought to be. Clear and convincing evidence is required.").

25
 extended, (c) while the exercise of discretion depends on the parties'
factual showings disputed facts should be construed in favor [of]
discovery, and (d) while the importance of the information must be
weighed against the hardships and cost of production and its availability
through other means, it is preferable for the court to impose partial
limitations on discovery rather than an outright denial. Any record which
indicates a failure to give adequate consideration to these concepts is
subject to the attack of abuse of discretion, regardless of the fact that the
order shows no such abuse on its face.
Id. at 1236 (quoting 23 Am.Jur.2d, Depositions and Discovery § 5 (1983)).

Fred's Stores of Miss., Inc. v. M & H Drugs, Inc., 725 So.2d 902, 919 (Miss. 1998).

¶58. Miss. R. Civ. P. 26 states in pertinent part:

b) Scope of Discovery. Unless otherwise limited by order of the court in accordance
with these rules, the scope of discovery is as follows:
(1) In General. Parties may obtain discovery regarding any matter, not privileged, which
is relevant to the issues raised by the claims or defenses of any party. The discovery may
include the existence, description, nature, custody, condition and location of any books,
documents, or other tangible things; and the identity and location of persons (i) having
knowledge of any discoverable matter or (ii) who may be called as witnesses at the trial.
It is not ground for objection that the information sought will be inadmissible at the trial if
the information sought appears reasonably calculated to lead to the discovery of admissible
evidence.
(d) Protective Orders. Upon motion by a party or by the person from whom
discovery is sought, and for good cause shown, the court in which the action is pending,
or in the case of a deposition the court that issued a subpoena therefor, may make any
order which justice requires to protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense, including one or more of the following:
(7) that a trade secret or other confidential research, development, or commercial
information not be disclosed or be disclosed only in a designated way....

(emphasis added). A trade secret is defined by Miss. Code Ann. § 75-26-3(d) (Rev. 2000) as:

information, including a formula, pattern, compilation, program, device, method, technique
or process, that:
(i) Derives independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and
(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy.

26
¶59. The chancellor in her protective order found that although most documents requested by EDS were

confidential and proprietary in nature, nonetheless, EDS's attorneys would have access to all requested

documents except Consultec's pricing models. Consultec had stated that the documents produced were

the bases for its bid, and aside from the pricing models being extremely confidential, especially to EDS,

Consultec’s biggest competitor, the pricing models were cumulative to the other documents produced.

¶60. Because EDS failed to base its allegations of fraud on any specific facts, we find that the chancellor

did not abuse her discretion in refusing to allow EDS access to the highly confidential pricing models of

Consultec.

IV. WHETHER EDS FAILED TO EXHAUST ITS REMEDIES BY
TIMELY PROSECUTING ITS APPEAL FROM THE ADVERSE
DECISION OF THE PERSONAL SERVICE CONTRACT REVIEW
BOARD.

¶61. On October 10, 2001, during the pendency of the chancery court litigation, EDS asked the Board

to cancel DOM's contract with Consultec. EDS abandoned this administrative review on October 23,

2001. On October 26, 2001, DOM filed a motion to dismiss the action for lack of subject matter

jurisdiction. On October 30, 2001, the chancellor denied DOM's motion to dismiss.

¶62. DOM claims EDS brought suit against DOM instead of perfecting an administrative appeal from

an adverse decision of the Board. DOM further argues that because EDS failed to exhaust all of its

administrative remedies, the chancery court lacked subject matter jurisdiction to review these matters.

¶63. EDS argues it filed a petition before the Board to review issues DOM failed to raise at the March

2001 meeting. EDS claims the petition was filed before the chancery court hearing so that the Board could

have a second opportunity to correct its earlier mistake. EDS withdrew the petition because it feared DOM

and Consultec would use the pending petition before the Board as a tactic to further avoid judicial scrutiny.

27
¶64. This Court has held that when there is not a "statutory plan for appeal from a state board or

agency's decision and the aggrieved party does not have an adequate remedy at law, jurisdiction to review

of [sic] the board or agency's decision lies with the chancery court." Pub. Employees' Ret. Sys. v.

Langham, 812 So.2d 969, 972 (Miss. 2002) (citing Prisock v. Perkins, 735 So.2d 440, 443 (Miss.

1999); Charter Med. Corp. v. Miss. Health Planning & Dev. Agency, 362 So.2d 180, 181 (Miss.

1978)).

In Charter Medical Corp. v. Mississippi Health Planning & Dev. Agency, 362
So.2d 180, 181 (Miss. 1978), we stated that where there is no statutory scheme for
appeal from a decision of a state board or agency and the injured party does not have a
full, plain, complete and adequate remedy at law, the chancery court has jurisdiction for
judicial review of the board or agency decision. Here there is no statutory scheme for
appealing the school board's decision awarding a hunting and fishing lease, and Prisock
lacks a complete and adequate remedy at law. Therefore, the chancery court would have
jurisdiction of an original action for injunction to judicially review the school board's
decision.

Prisock, 735 So.2d at 443.

¶65. Section 6-201 of the Personal Service Contract Review Board Regulations states, "[a]ny person

receiving an adverse decision, the state, or both may appeal from a decision of the Personal Service

Contract Review Board to the designated court or courts of the state."

¶66. This matter was properly brought first before the PSCRB. After receiving an adverse ruling, EDS

filed an appeal with the Chancery Court of Hinds County. Finding the chancery court had jurisdiction over

this matter, we find this issue to be without merit.

CONCLUSION

¶67. Applying the correct standard of review on a decision from an administrative agency, the chancellor

properly found that DOM's award of its fiscal agent contract to Consultec was supported by substantial

evidence and was not arbitrary or capricious. Because EDS did not have a property interest in the contract,

28
there was no constitutional violation. The chancellor was also correct in refusing to permit EDS, Consultec's

primary competitor, discovery regarding the pricing models of Consultec.

¶68. Accordingly, the final judgment of the Chancery Court of the First Judicial District of Hinds County

is affirmed.

¶69. AFFIRMED.

SMITH, P.J., EASLEY AND GRAVES, JJ., CONCUR. McRAE, P.J., CONCURS
IN RESULT ONLY. PITTMAN, C.J., WALLER, COBB AND DIAZ, JJ., NOT
PARTICIPATING.

29