Dr. Behzad Nazari, D.D.S., et al. v. The State of Texas; Xerox Corporation; and Xerox State Healthcare, LLC f/k/a ACS State Healthcare, LLC

Summary

The case concerns whether sovereign immunity bars dental providers’ counterclaims against the State of Texas in a Medicaid Fraud Prevention Act enforcement action. The supplied text is a concurrence in part and dissent in part by Justice Lehrmann, joined by Justice Johnson, arguing that the State’s claims for monetary relief waived immunity for germane, connected, and properly defensive offsetting counterclaims.

Holdings

1. In Justice Lehrmann's dissenting view, the State's claims under the Medicaid Fraud Prevention Act constituted affirmative claims for monetary relief, so the State waived or otherwise left the relevant sphere of sovereign immunity for germane, connected, and properly defensive counterclaims that could offset the State's recovery.
2. In the dissent's view, there was no principled law-enforcement exception to Reata merely because the State sought civil penalties or acted under its sovereign enforcement authority.
3. In the dissent's view, the Providers adequately pleaded counterclaims that were connected to, relevant to, and defensive of the State's Medicaid fraud claims.

Questions Presented

1. Whether sovereign immunity barred the Providers' counterclaims against the State when the State filed affirmative claims for monetary relief under the Texas Medicaid Fraud Prevention Act.
2. Whether the Providers' counterclaims were germane to, connected with, and properly defensive to the State's claims so that they could operate as offsets under Reata Construction Corp. v. City of Dallas.
3. Whether the Providers had pleaded facts affirmatively demonstrating jurisdiction over their counterclaims.

Disposition

affirmed