Troy W. Simmons, D.D.S., P.C. and Troy W. Simmons, D.D.S. v. Chris Traylor, Executive Commissioner of the Texas Health and Human Services Commission, in His Official Capacity
12-16-00108-CV
| Tex. Crim. App. | Oct 31, 2016Background
- In 2012 the Texas Health and Human Services Commission’s Office of Inspector General (OIG) placed a payment hold on Medicaid reimbursements to Troy W. Simmons, D.D.S., after finding a credible allegation of fraud.
- Simmons contested the payment hold; OIG later issued a Notice of Potential Overpayment and then a Final Notice of Overpayment asserting a $2,609,436 overpayment.
- Simmons sought various hearings; OIG argued Simmons failed to timely appeal the Final Notice and moved to dismiss the payment-hold proceeding as moot. An ALJ denied that motion but later canceled the scheduled hearing and remanded the matter to the Commission.
- OIG applied the held funds to offset the asserted overpayment and informed Simmons the payment hold was lifted; Simmons then sued the Executive Commissioner (in his official capacity) seeking declaratory relief and return of the funds.
- The Commissioner filed a plea to the jurisdiction asserting sovereign immunity; the trial court granted it and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sovereign immunity was waived by an ultra vires claim | Simmons: retaining sequestered funds was ultra vires/ministerial — Commissioner acted outside statutory authority and must return funds | Commissioner: OIG followed statutory/regulatory procedures; funds properly retained and applied to final overpayment; no ultra vires act | Court: Held no ultra vires claim — Commissioner acted within authority; sovereign immunity bars suit |
| Whether Simmons exhausted administrative remedies / timely appealed final overpayment | Simmons: his earlier contested‑case request was sufficient to contest final sanctions | Commissioner: Simmons failed to file the written appeal required after the Final Notice and did not meet regulatory content/timing requirements | Court: Held Simmons did not satisfy required appeal procedures; final notice became final and OIG could retain funds |
| Whether declaratory relief under DJA waives immunity | Simmons: requested declaration that liability was extinguished and funds returned | Commissioner: DJA does not waive sovereign immunity; plaintiff must plead ultra vires or constitutional claim | Court: Held DJA does not waive immunity; plaintiff failed to plead a valid constitutional or ultra vires claim |
| Whether procedural constitutional claims (due process/equal protection) invoked jurisdiction | Simmons: alleged due process and equal protection violations | Commissioner: Simmons did not plead differing treatment or a protected property/liberty interest | Court: Held claims insufficiently pleaded; no property interest in Medicaid reimbursements and no equal protection showing |
Key Cases Cited
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (sovereign immunity and plea to the jurisdiction standards)
- Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) (Declaratory Judgment Act does not waive sovereign immunity)
- Tex. Dep’t of Crim. Justice v. Miller, 51 S.W.3d 583 (Tex. 2001) (review of jurisdictional evidence on plea to the jurisdiction)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires exception to sovereign immunity requires showing officers acted without legal authority)
- Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618 (Tex. 2011) (DJA does not confer jurisdiction over claims barred by sovereign immunity)
- Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154 (Tex. 2016) (state actors are protected when acting consistently with law)
- Combs v. City of Webster, 311 S.W.3d 85 (Tex. App.—Austin 2009) (agency interpretations of its rules given deference)
- Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality, 307 S.W.3d 505 (Tex. App.—Austin 2010) (requirements for invoking judicial review against agencies)
- Personal Care Products, Inc. v. Hawkins, 635 F.3d 155 (5th Cir. 2011) (no property right in Medicaid reimbursements during fraud investigation)