Electronic Data Sys. Corp. v. Miss. Div. of Medicaid, et al.
| Docket Number: | 2001-CA-01941-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 09-11-2003 Opinion Author: Carlson, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Standard of review - Substantial evidence - Violation of constitutional right - 42 U.S.C. § 1983 - Discovery - Exhaustion of remedies Judge(s) Concurring: Smith, P.J., Easley and Graves, JJ. Non Participating Judge(s): Pittman, C.J., Waller, Cobb and Diaz, JJ. Concurs in Result Only: McRae, P.J. Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 12-06-2001 Appealed from: Hinds County Chancery Court Judge: Denise Owens Disposition: Affirmed the Division of Medicaid’s award of its fiscal agent contract to Consultec, LLC. Case Number: 2001-803(0/3) |
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| Party Name: | Attorney Name: | |||
| Appellant: | Electronic Data Systems Corporation |
STEVE J. ALLEN
EDMUND L. BRUNINI, JR. |
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| Appellee: | Mississippi Division of Medicaid, Rica Lewis-Payton, in Her Official Capacity as Executive Director of the Division of Medicaid, and Consultec, LLC | JOHN L. MAXEY, II DONNA ROSS PHILIP OFFICE OF THE ATTORNEY GENERAL BY: HAROLD PIZZETTA, III GWENDOLYN G. COMBS |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Standard of review - Substantial evidence - Violation of constitutional right - 42 U.S.C. § 1983 - Discovery - Exhaustion of remedies |
| Summary of the Facts: | Electronic Data Systems Corporation had served as the fiscal agent for the Mississippi Division of Medicaid since 1994. The primary task of the fiscal agent is to maintain and operate the Division’s Medicaid Management Information System, which consists of computer hardware and software used to process the numerous medicaid claims. EDS’s contract was to expire by its terms on December 31, 2000, but the Division extended EDS's contract through December 31, 2001. Helen Wetherbee was the Division’s Executive Director until August 13, 1999, and accepted a position as Consultec's Account Manager in early 2001. Under a new agency administration, a new RFP was issued on September 8, 2000, seeking vendor proposals for the DOM fiscal agent contract to render services commencing on January 1, 2002. EDS and Consultec submitted bids. DOM stated its intent to award the fiscal agent contract to Consultec and sought approval from the Personal Services Contract Review Board. In a letter to the Board, EDS’s counsel outlined concerns regarding Wetherbee's involvement and certain ethical violations EDS believed to have occurred which would render an award of the contract to Consultec void. The Board determined that the Division had complied with all rules and regulations required, and approved the Division’s award of its fiscal agent contract to Consultec. EDS filed a complaint in chancery court against the Division, Consultec, and the Division’s Executive Director. EDS also filed a Petition for Cancellation of Fiscal Agent Contract. By joint stipulation, the scope of litigation in chancery court was narrowed as EDS and Consultec dismissed all claims and counterclaims for damages without prejudice against each other, but EDS preserved its claim for injunctive relief. The chancellor denied EDS's motion for a preliminary injunction or injunction pending appeal, and EDS appeals. |
| Summary of Opinion Analysis: | Issue 1: Standard of review EDS argues that the chancery court applied an improper standard of appellate review. The chancellor determined that the matters were appellate in nature, and the cause of action would be treated as an administrative appeal. The record shows a somewhat hybrid proceeding in which the chancellor clearly considered the administrative record and also received testimony and additional exhibits at the two-day hearing. The chancellor did not err in ultimately concluding that the matters were essentially appellate in nature. In reviewing decisions of administrative agencies, the role of the appellate court is to determine whether the order of the administrative agency was unsupported by substantial evidence, was arbitrary and capricious, was beyond the power of administrative agency to make, or violated some statutory or constitutional right of the complaining party. Here, the chancellor applied the correct standard of review in finding that the Division did not make its decision against the substantial weight of the evidence. Issue 2: Awarding of contract EDS argues that Wetherbee acted as the Division's executive director and on Consultec's behalf within the same particular matter and that Consultec was a nonresponsive offeror causing the contract to be void. Even though Wetherbee participated in the preparation of the 1999 APD and the subsequent issuance of the 1999 RFP, the chancellor could find no evidence that she either participated in the 2000 RFP or attempted to influence Division employees regarding the 2000 RFP. The ethical issues raised regarding the award of the fiscal agent contract to Consultec were thoroughly reviewed by both the chancellor and the Board. Because those issues were fairly debatable, the Division’s decision to award the contract to Consultec was supported by substantial evidence. Issue 3: Violation of constitutional right EDS argues that the chancellor erred in dismissing its substantive due process claims pursuant to 42 U.S.C. § 1983. Neither a State nor its officials acting in their official capacities are persons under section 1983 unless the state official was sued in his or her official capacity for declaratory or injunctive relief. The two requirements for a section 1983 cause of action for a due process violation are that there must be a recognized liberty or property interest within the purview of the Fourteenth Amendment and a violation of the underlying constitutional right under color of state law must be proven. To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. EDS has no protected interest in the renewal or award of DOM's fiscal agent contract. Issue 4: Discovery EDS argues that the chancellor improperly refused EDS any discovery regarding Consultec's bids on the fiscal agent contract, because it asserted in its complaint that Consultec fraudulently underbid the contract. Because EDS failed to base its allegations of fraud on any specific facts, the chancellor did not abuse her discretion in refusing to allow EDS access to the highly confidential pricing models of Consultec. Issue 5: Exhaustion of remedies The Division argues that because EDS failed to exhaust all of its administrative remedies, the chancery court lacked subject matter jurisdiction to review these matters, i.e., EDS brought suit against the Division instead of perfecting an administrative appeal from an adverse decision of the Board. When there is not a statutory plan for appeal from a state board or agency's decision and the aggrieved party does not have an adequate remedy at law, jurisdiction for review of the board or agency's decision lies with the chancery court. Section 6-201 of the Personal Service Contract Review Board Regulations provides that any person receiving an adverse decision, the state, or both may appeal from a decision of the Personal Service Contract Review Board to the designated court of the state. |
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