Texas Health and Human Services Commission v. Dimitria Pope and Shannon Pickett, 674 S.W.3d 273

Background:

Dimitria Pope (Director) and Shannon Pickett (Associate Director) worked in HHSC’s Medical Transportation Program (MTP), which pays contractors (e.g., LeFleur) to provide Medicaid nonemergency transportation and seeks federal reimbursement.
Federal and state rules require minors under 15 to be accompanied to qualify for reimbursement; Pope and Pickett reported instances where LeFleur and others allegedly transported unaccompanied minors to OIG, HHSC leadership, the OAG, and the FBI.
A 2014 federal audit recommended HHSC repay millions for noncompliant claims; Pope and Pickett helped draft the State Medicaid Director’s letter responding to the audit and Pickett sent critical edits.
OIG investigated and HHSC senior managers negotiated directly with LeFleur; Pope and Pickett were told to “stand down” and were fired in 2017 shortly after Pickett’s last email about the draft letter.
Pope and Pickett sued under the Texas Whistleblower Act claiming they were terminated for good-faith reports of HHSC violations; trial court denied HHSC’s plea to the jurisdiction, the court of appeals affirmed, and the Texas Supreme Court granted review.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether reports about LeFleur (an independent contractor) constitute reports of a violation of law by the employing governmental entity (HHSC)	Pope/Pickett: Reports about LeFleur necessarily implied HHSC was violating law (because HHSC sought federal reimbursement)	HHSC: Whistleblower Act protects only express reports identifying the employing entity or another public employee; independent contractors are excluded	Court: Must be an express report identifying HHSC or a public employee; implied reports about a contractor do not suffice
Whether Pope’s Feb 2014 email alleging some HHSC call-center employees "allowing" unauthorized adults to accompany minors supported causation	Pope/Pickett: The email was an express report of HHSC employee misconduct	HHSC: Even if it was a report, the 3.5-year gap makes it too remote to show causation	Court: The email, while possibly an express report, is too temporally remote to support causation for the 2017 terminations
Whether Pickett’s edits to the Medicaid Director’s draft letter constituted a report of a violation of law by HHSC	Pickett: Her edits called out inaccuracies and unsupported statements, which amounted to reporting violations	HHSC: Edits did not dispute the letter’s recommendation that claims be allowable; OIG did not view them as reporting violations	Court: Pickett’s comments did not report a violation of law—they did not contradict the letter’s legal conclusion or furnish actionable information
Whether reports about HHSC’s (or OIG’s) failure to enforce experience rebates were reports of violations of law	Pope/Pickett: They reported that HHSC failed to collect experience rebates and thus violated law	HHSC: Enforcement discretion resides with OIG/agency; no statute or rule required a particular enforcement method or timeline; rebates were owed by contractor LeFleur	Court: Complaints reflected disagreement with discretionary enforcement, not violations of law; reports did not target the responsible enforcement entity or show objectively reasonable belief of illegality

Key Cases Cited

City of Fort Worth v. Pridgen, 653 S.W.3d 176 (Tex. 2022) (report must convey information identifying or corroborating illegal conduct to be protected)
Tex. Comm’n on Env’t Quality v. Resendez, 450 S.W.3d 520 (Tex. 2014) (reports must be direct to an appropriate law enforcement authority)
State v. Lueck, 290 S.W.3d 876 (Tex. 2009) (Whistleblower Act waiver of immunity requires jurisdictional facts showing an actual violation)
Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755 (Tex. 2018) (plea-to-jurisdiction review may require consideration of evidence beyond the pleadings)
Univ. of Tex. Sw. Med. Ctr. v. Gentilello, 398 S.W.3d 680 (Tex. 2013) (Whistleblower Act protects reports to authorities that issue legal directives, not internal reports)
Wichita County v. Hart, 917 S.W.2d 779 (Tex. 1996) (good-faith standard for whistleblower reports includes subjective and objective prongs)
State v. Malone Serv. Co., 829 S.W.2d 763 (Tex. 1992) (regulatory enforcement requires agency discretion)