                      UNITED STATES COURT OF APPEALS
                           For the Fifth Circuit



                                No. 01-50338



                               STATE OF TEXAS,

                                                      Plaintiff-Appellee,


                                   VERSUS


      UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES,

                                                      Defendant-Appellant.




               Appeal from the United States District Court
                     For the Western District of Texas
                               (A-99-CV-56-SS)
                                June 7, 2002


Before HIGGINBOTHAM, DeMOSS, and BENAVIDES, Circuit Judges.

PER CURIAM:*

      This is an action for judicial review of a decision rendered

by the United States Department of Health and Human Services (HHS)

through   the    agency's    Departmental   Appeals   Board   (DAB).     The

decision at issue involves the government's administration and

review    of     States'    accounting   for   administrative    costs   in


  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
cooperative,      federally       funded,    State       administered        programs.

Specifically, the DAB held that Texas' increase in the enrollment

of approximately 55,000 higher education employees who previously

were    insured   under      plans   maintained       by     state     colleges     and

universities      caused     an   improper     dilution       of     prior      federal

contributions     to   the    State's   Uniform      Group     Insurance        Program

(UGIP).    The DAB directed the State to return the amount diverted,

which was stipulated by the parties to be $3,037,200.

       On judicial review of the DAB decision, the district court

granted summary judgment in favor of the State. The district court

rejected   the    DAB's    holding    that    the    addition        of   the    higher

education employees was dilutive and caused the improper shifting

of federal funds.          According to the district court, the DAB's

decision was “purely theoretical” and “unsupported by any evidence

on the record.”         Thereafter, HHS's motion for reconsideration

and/or amendment of the judgment was denied.

       Having carefully reviewed the entire record of this case, and

having fully considered the parties' respective briefing on the

issue in this appeal, we conclude that the DAB's decision was

neither    arbitrary,      capricious,       nor    an     abuse     of   discretion.

Therefore, we REVERSE the district court's judgment in this case

and grant summary judgment in favor of HHS.




                                         2
