State of Texas’ Bid to Cut Out Whistleblowers from $236M Xerox Medicaid Settlement Rejected.

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Date: Wednesday November 29, 2023 05:22:32 pm
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    AUSTIN – An appeals court has affirmed the trial court’s decision to deny a motion from the State of Texas challenging the trial court’s jurisdiction in a case to determine the share of proceeds from the State’s settlement with the Xerox Corporation.

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    According to court documents, Christine Ellis, D.D.S., and Joshua LaFountain had initiated qui tam actions against Xerox to motion the trial court to determine their share of proceeds from the State of Texas’s settlement with Xerox Corporation. The State argued that sovereign immunity and the Texas Medicaid Fraud Prevention Act’s (TMFPA) first-to-file provision strip the trial court of jurisdiction over the joint motion. The TMFPA empowers the attorney general to investigate and enforce its provisions, deputizing private citizens to act on behalf of the government. Restrictions, including the first-to-file and public-disclosure provisions, govern private parties’ qui tam actions.

    The trial court denied the State’s plea, rejecting sovereign immunity as the appropriate mechanism for resolving such disputes and emphasizing that these issues are expected and predicted by the TMFPA. The court reviewed the standards for challenging jurisdiction and determined that the State failed to conclusively establish a jurisdictional bar, even if considering the first-to-file provision as jurisdictional.

    The appeals court affirmed the trial court’s denial of the State’s plea to jurisdiction, asserting that the State’s arguments regarding sovereign immunity and the first-to-file provision are insufficient to negate subject matter jurisdiction and maintaining that subject matter jurisdiction exists.

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