U.S. ex rel. King v. Univ. of Tex. Health Sci. Ctr. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. King v. Univ. of Tex. Health Sci. Ctr., No. 12-20795 (5th Cir. Nov. 4, 2013)

The U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s dismissal of an employee’s False Claims Act (“FCA”) claims due to lack of jurisdiction and for failure to state a claim. The employee claimed that her supervisor had falsified research data results and had failed to obtain written informed consent from human research subjects. The employee alleged that the hospital failed to fully investigate and fraudulently covered up research.

The circuit court held that the university hospital was an “arm of the state” and not a “person” who could be liable under the FCA. The court noted that the hospital’s main source of funding was direct state appropriations, that the hospital was established by state law, and that previous cases as a state agency entitled it to immunity. The university hospital system as a whole is a statewide system that is concerned with education and research in the entire state of Texas. Further, the hospital does not have true autonomy because its board of regents, who are appointed by the governor and approved by the senate, must approve all contracts the hospital enters into. The court determined that this was sufficient to prove that the hospital was an arm of the state that enjoyed immunity, and dismissed the FCA claim for failure to state a claim.

The circuit court also affirmed the dismissal of the employee’s retaliation claim. As an arm of the state, the hospital was entitled to sovereign immunity that barred monetary relief under the FCA anti-retaliation provision.