                         Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE                                            NEWS RELEASE #021


FROM: CLERK OF SUPREME COURT OF LOUISIANA



The Opinions handed down on the 8th day of May, 2019, are as follows:



BY WEIMER, J.:


2018-CC-1768      THE STATE OF LOUISIANA, EX REL. JAMES D. "BUDDY" CALDWELL,
                  ATTORNEY GENERAL v. MOLINA HEALTHCARE, INC; MOLINA INFORMATION
                  SYSTEMS, L.L.C. D/B/A MOLINA MEDICAID SOLUTIONS; PARAMAX SYSTEMS
                  CORPORATION; AND UNISYS CORPORATION (Parish of E. Baton Rouge)

                  The writ application was granted in this matter to review the
                  correctness of the appellate court’s ruling, sustaining an
                  exception of no right of action for the Attorney General’s
                  lawsuit against the defendants, which are corporate entities
                  allegedly serving as the state’s fiscal intermediary for the
                  Medicaid program. By statute, the Louisiana Department of Health
                  has the capacity to sue and be sued for programs that it
                  administers, such as Medicaid.   However, because the Louisiana
                  Department of Health has delegated–and the defendants allegedly
                  contractually accepted–some of the administrative functions of
                  the state’s Medicaid program, we find that the Attorney General
                  has the capacity, and hence a right of action, to prosecute this
                  lawsuit. VACATED; REMANDED.

                  JOHNSON, C.J., additionally concurs and assigns reasons.

                  GUIDRY, J., additionally   concurs   for   the   reasons   assigned   by
                  Chief Justice Johnson.

                  GENOVESE, J., additionally concurs for the reasons assigned by
                  Chief Justice Johnson.
05/08/19

                   SUPREME COURT OF LOUISIANA


                                 No. 2018-CC-1768

        THE STATE OF LOUISIANA, EX REL. JAMES D. “BUDDY”
                CALDWELL, ATTORNEY GENERAL

                             VERSUS
                    MOLINA HEALTHCARE, INC.;
             MOLINA INFORMATION SYSTEMS, L.L.C. D/B/A
           MOLINA MEDICAID SOLUTIONS; PARAMAX SYSTEMS
              CORPORATION; AND UNISYS CORPORATION


             ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST
                     CIRCUIT, PARISH OF EAST BATON ROUGE



WEIMER, Justice.

      The writ application was granted in this matter to review the correctness of the

appellate court’s ruling, sustaining an exception of no right of action for the Attorney

General’s lawsuit against the defendants, which are corporate entities allegedly

serving as the state’s fiscal intermediary for the Medicaid program. By statute, the

Louisiana Department of Health has the capacity to sue and be sued for programs that

it administers, such as Medicaid. However, because the Louisiana Department of

Health has delegated–and the defendants allegedly contractually accepted–some of

the administrative functions of the state’s Medicaid program, we find that the

Attorney General has the capacity, and hence a right of action, to prosecute this

lawsuit.
                                      BACKGROUND

       The state, represented by its Attorney General, filed this lawsuit on June 26,

2014, against defendants, Molina Healthcare, Inc., Molina Information Systems,

L.L.C. d/b/a Molina Medicaid Solutions, and Unisys Corporation. As described in

the state’s petition, “[o]ver the last thirty (“30”) years, the Defendants have been the

fiscal agent responsible for processing Louisiana’s Medical pharmacy provider

reimbursement claims.” Pursuant to a contract to which the state itself is allegedly

a party, “the Defendants assumed operational liability” of a “customizable”

computerized system known as the Louisiana Medicare Management Information

System (“LMMIS”). As part of defendants’ duties, they are “responsible for the

operation and maintenance of LMMIS, as well as creating and implementing design

changes to the LMMIS that comply with State and federal mandates.”

       As further described in the state’s petition, since January 1984, Unisys has

engaged in the business of operating, maintaining, implementing, and managing

LMMIS. In May 2010, the Molina defendants acquired Unisys’ Health Information

Management Division, and the Unisys defendant became a subcontractor of the

Molina defendants. Unisys continues to work with the Molina defendants to operate

LMMIS. For simplicity’s sake, given the defendants’ alleged corporate affiliation

and noting the state’s representation in brief that “Molina has been dismissed from

the suit,” this opinion will refer to the defendants collectively as “Unisys.”1

       The crux of the state’s allegations in this lawsuit is that Unisys caused the

Louisiana Department of Health (“LDH”) to overpay Medicaid pharmacy providers

through Unisys’ improper operation and management of LMMIS. Under theories of


1
  There is only one petition in the record and, although the court was informed that the Molina
defendants were dismissed, the court is constrained to recount the allegations as presented in the
petition.

                                                2
fraud, breach of contract, negligence, and negligent misrepresentation, the state

contends that it is entitled to recover from Unisys the amounts LDH overpaid to the

pharmacy providers as far back as 1989.2 The state’s petition also proposes statutory

theories of recovery under Louisiana’s Unfair Trade Practices Act (“LUTPA,” La.

R.S. 51:1401, et seq.) and Louisiana’s Medical Assistance Programs Integrity Law

(“MAPIL,” La. R.S. 46:437.1, et seq.); however, these statutory theories of recovery

were earlier dismissed on Unisys’ exceptions of no cause of action. See State ex rel.

Caldwell v. Molina Healthcare, Inc., 15-0492 (La.App. 1 Cir. 1/22/16)

(unpublished writ action; 2016 WL 10771114).

       As the state further describes its remaining contract-based claims, Unisys has

served as “the fiscal agent responsible for processing Louisiana Medicaid’s pharmacy

provider reimbursement claims.” LMMIS has been “the core tool” used by Unisys

while serving as the state’s Medicaid “fiscal agent.” Louisiana’s Medicaid program

maintains a drug formulary as part of the “State Plan,” and LMMIS should select

reimbursement prices from the lowest price point in the state’s formulary. These

reimbursement prices are then paid by the state to medical providers, including

pharmacies. However, according to the state, Unisys “fail[ed] to process the State’s

reimbursements according to the reimbursement formula set forth in the State Plan.

Instead, the Defendants adjudicated claims based on a formula that failed to adhere

to both State and federal policies concerning reimbursement.” As a result, the state

has overpaid “excessive amounts” on reimbursement for drugs dispensed by

pharmacies.



2
  LDH was previously known as the Louisiana Department of Health and Hospitals (“DHH”).
Because the name change occurred during the period of time covered by the state’s lawsuit, for
convenience, this opinion uses the current name, although the previous name will sometimes be used
when discussing pleadings or court decisions.

                                                3
       According to the state, the state was unaware until recently of the excessive

reimbursements. In contrast, the state alleges “nearly two-hundred thirty … highly

trained professionals, including programmer analysts and engineers” are employed

by Unisys, which is “responsible for implementing” a system that conforms with the

Louisiana Medicaid program.

       In the same pleading whereby Unisys obtained dismissal of the state’s statutory

claims brought under LUTPA and MAPIL, Unisys also sought dismissal of the state’s

contract-based claims.3         Nevertheless, the state’s contract-based claims were

untouched, and remained viable, under the appellate court’s ruling dismissing the

statutory claims. See Molina Healthcare, Inc., supra.

       Unisys revisited its exception of no right of action, however, after the appellate

court found the state had no right of action regarding Medicaid drug payments in

State v. Abbott Laboratories., Inc., 15-1626 (La.App. 1 Cir. 10/21/16), 208 So.3d

384, 390, writs denied, 17-0149, 17-0125 (La. 3/13/17), 216 So.3d 802, 808,

overruled in part on other grounds by State, by and through Caldwell v. Astra

Zeneca AB, 16-1073 (La.App. 1 Cir. 4/11/18), 249 So.3d 38. The district court

denied Unisys’ exception of no right of action, explaining:

              After carefully reviewing and considering the memoranda
       together with the law in this case, and specifically State v. Abbott
       Laboratories, Inc., 2015-1626 (La.App. 1 Cir. 10/21/16), 208 So.3d
       384, writ denied, 2017-0125, 2017-[01]49 (La. 3/13/17), 2017 WL
       1075533, 2017 WL 1076464, the Court finds that the State of Louisiana
       is a party to the contract and indeed the enforcing body which gives the


3
  Among other exceptions not relevant to this discussion, Unisys brought the dilatory exception of
lack of procedural capacity and the peremptory exception of no right of action. The exception of
lack of procedural capacity was premised on Unisys’ contention that “[a]s the signatory on the
contracts on which the State bases this action, [DDH], not the State of Louisiana or its Attorney
General, is the sole party with authority to bring this action.” Similarly, the exception of no right
of action was premised on the contention that DHH “alone has privity to sue under the contracts and
is the real party in interest,” such that “neither the State nor the Attonrey General has any standing
or right of action to bring []DHH’s claims.”

                                                  4
      State a real and actual interest in this litigation. In other words, the State
      of Louisiana has standing. …

      Unisys sought supervisory review from the same appellate court that decided

Abbott Laboratories, Inc. Largely in reliance on Abbott Laboratories, Inc., and

because LDH had a statutory right to sue and be sued, the appellate court agreed with

Unisys that the state had no right of action:

             WRIT GRANTED. Under our de novo review, we find that the
      [district] court erred in denying the exception raising the objection of no
      right of action as to the State of Louisiana’s claims of breach of contract,
      fraud, negligence, and negligent misrepresentation. State v. Abbott
      Laboratories, Inc., 2015-1626 (La.App. 1st Cir. 10/21/16), 208 So.3d
      384, reh’g denied, (Dec. 22, 2016), writs denied, 2017-0149 (La.
      3/13/17), 216 So.3d 802 & 2017-0125 (La. 3/13/17), 216 So.3d 808.
      The State of Louisiana, itself, is not a party to any of the contracts at
      issue and has no claim for the breach thereof. Dennis v. Copelin,
      94-2002 (La.App. 4th Cir. 2/1/96), 669 So.2d 556, 561, writ denied,
      96-1012 (La. 6/21/96), 675 So.2d 1079. The right belongs to the party
      to the contracts at issue, [LDH], which is a body corporate with the
      power to sue and be sued. La. R.S. 36:251(A); also see Abbott
      Laboratories, Inc., 208 So.3d 384. The State of Louisiana has no
      interest in judicially enforcing the rights asserted in the petition.
      Jenkins v. City of Baton Rouge, 2014-1235 (La.App. 1st Cir. 3/9/15),
      166 So.3d 1032, 1035. Accordingly, the [district] court’s judgment
      denying the defendant’s exception of no right of action is reversed, the
      exception of no right of action is sustained, and the matter is dismissed,
      with prejudice.

State ex rel. Caldwell v. Molina Healthcare, Inc., 17-0778 (La.App. 1 Cir.

8/14/18), (unpublished writ action; 2018 WL 3913330).

      The state filed a writ of certiorari with this court, which was granted. State ex

rel. Caldwell v. Molina Healthcare, Inc., 18-1768 (La. 1/18/19), ____So.3d____.

                              LAW and DISCUSSION

      Generally, a legal action can be brought only by a person having a real and

actual interest in doing so. See La. C.C.P. art. 681. “When the facts alleged in the

petition provide a remedy under the law to someone, but the plaintiff who seeks the

relief is not the person in whose favor the law extends the remedy, the proper

                                            5
objection is no right of action, or want of interest in the plaintiff to institute the suit.”

Howard v. Administrators of Tulane Educ. Fund, 07-2224, p. 16 (La. 7/1/08), 986

So.2d 47, 59 (citing 1 FRANK L. MARAIST & HARRY T. LEMMON, LOUISIANA CIVIL

LAW TREATISE: CIVIL PROCEDURE § 6.7, 121 (1999)). Such an objection is

presented as a peremptory exception of no right of action raised by the defendant or

noticed by the court on its own motion, in either the trial or appellate court. See La.

C.C.P. arts. 927 and 2163. “The function of the peremptory exception is to have the

plaintiff’s action declared legally nonexistent, or barred by effect of law, and hence

this exception tends to dismiss or defeat the action.” La. C.C.P. art. 923.

       “The burden of showing that the plaintiff has stated no cause of action is upon

the exceptor.” City of New Orleans v. Bd. of Directors of Louisiana State

Museum, 98-1170, p. 9 (La. 3/2/99), 739 So.2d 748, 755. “On the trial of the

peremptory exception [of no right of action] pleaded at or prior to the trial of the case,

evidence may be introduced to support or controvert any of the objections pleaded,

when the grounds thereof do not appear from the petition.” La. C.C.P. art. 931. In

instances when “evidence [has been] introduced at the hearing” on a peremptory

exception, “the trial court's findings of fact ... are subject to the manifest error-clearly

wrong standard of review.” London Towne Condominium Homeowner’s Ass’n

v. London Towne Co., 06-401, p. 4 (La. 10/17/06), 939 So.2d 1227, 1231.

       In other respects, “[t]he determination of whether a plaintiff has a legal right

to bring an action raises a question of law, which requires de novo review.” Rebel

Distributors Corp., Inc. v. LUBA Workers’ Comp., 13-0749, p. 10 (La. 10/15/13),

144 So.3d 825, 833 (citing, inter alia, Holly & Smith Architects, Inc. v. St. Helena

Congregate Facility, Inc., 06-0582, p. 9 (La. 11/29/06), 943 So.2d 1037, 1045. “An

appellate court considering an exception of no right of action should focus on

                                             6
whether the particular plaintiff has a right to bring the suit and is a member of the

class of persons that has a legal interest in the subject matter of the litigation,

assuming the petition states a valid cause of action for some person.” Rebel

Distributors, 13-0749 at 10, 144 So.3d at 833.            If doubt exists about the

appropriateness of an objection of no right of action, it is to be resolved in favor of

the plaintiff. Rebel Distributors, 13-0749 at 10, 144 So.3d at 833.

      In the instant case, as noted earlier, only non-statutory claims, stemming from

Unisys’ contract to allegedly serve as the fiscal intermediary for Louisiana’s

Medicaid program, remain viable against Unisys. Unisys’ exception to those

contract-based claims is primarily based on La. R.S. 36:251(A), which, in pertinent

part, provides: “[LDH] is created and shall be a body corporate with the power to sue

and be sued.” According to Unisys, the power of LDH to sue and be sued is

consistent with powers ascribed to LDH’s secretary.              See, e.g., La. R.S.

36:254(D)(1)(a)(i) (LDH’s “secretary shall direct and be responsible for the Medical

Assistance Program.”); id. (D)(2)(ii)(d) (generally empowering LDH’s secretary to

“[f]ile suit on behalf of the Medical Assistance Program”).

      Unisys renewed its exception of no right of action in light of Abbott

Laboratories, Inc., in which the court cited inter alia La. R.S. 36:251 and ruled: “In

the absence of constitutional or statutory provisions to the contrary, the State cannot

bring a cause of action that is the property of one of its political subdivisions which

has the right to sue and be sued.” Abbott Laboratories, Inc., 15-1626 at 6, 208

So.3d at 388. Based on Abbott Laboratories, Inc., Unisys presently contends that

La. R.S. 36:251(A) vests LDH with the exclusive power to file suit and, thus, the state

and its Attorney General have no right of action.



                                           7
       The state responds that “[t]he fact that one department may have a right of

action does not preclude others from also having one.” The state emphasizes that La.

Const. art. IV, § 84 describes the powers of the Attorney General: “As necessary for

the assertion or protection of any right or interest of the state, the attorney general

shall have authority (1) to institute, prosecute, or intervene in any civil action or

proceeding … .”5 According to the state, the legislature’s conferring juridical

capacity on LDH did not sever LDH from the larger state “body politic.” Relatedly,

the contract with Unisys was not for LDH alone but rather, “the entire purpose of the

contract was to benefit the State by establishing a cost-effective administration for the

State Medicaid program.”

       As an initial observation, focusing–as our civil law methodology requires–on

the statutory text, La. R.S. 36:251(A), relied on by Unisys, does not use the term

“exclusive,” or words to that effect, when describing LDH’s right to file suit. Even

so, not every governmental entity has been statutorily authorized as having the right

to sue and be sued.           A cardinal rule of statutory interpretation directs that

presumptively “every word, sentence, or provision in a law was intended to serve

4
  Unisys argues that the Attorney General is precluded from asserting a constitutional basis to defeat
Unisys’ exception of no right of action because the first time such assertion was made was in the
appellate court, and then on rehearing. This argument lacks merit because the Attorney General
prevailed against Unisys’ exception until the appellate court granted the exception on initial hearing.
The Attorney General was not required to raise all arguments in support of its favorable judgment
until the appellate court granted Unisys’ exception and then, for the first time, the Attorney General
sought a reversal of a judgment. See La. C.C.P. art. 2133(B) (“A party who does not seek
modification, revision, or reversal of a judgment in an appellate court, including the supreme court,
may assert, in support of the judgment, any argument supported by the record, although he has not
appealed, answered the appeal, or applied for supervisory writs.”).
5
  The Attorney General also points to La. R.S. 13:5036, a statute with similar wording as La. Const.
art. IV, § 8: “The attorney general may institute and prosecute any and all suits he may deem
necessary for the protection of the interests and rights of the state.” La. R.S. 13:5036. Because the
Louisiana Constitution is a superior source of law with substantially similar provisions as a statute,
the constitutional provision will be considered. Therefore, the analysis focuses on whether the
similar wording found in La. Const. art. IV, § 8 defeats Unisys’ exception. See Louisiana Fed’n
of Teachers v. State, 13-0120, p. 2 (La. 5/7/13), 118 So.3d 1033, 1037 (observing that
“constitutional provisions are never mere technicalities, but are part of the basic, fundamental
provisions in our system of laws”).

                                                  8
some useful purpose, that some effect is to be given to each such provision, and that

no unnecessary words or provisions were employed.” Louisiana Fed’n of Teachers

v. State, 13-0120, p. 39 (La. 5/7/13), 118 So.3d 1033, 1057-58. Also, “a statute more

specifically directed to the matter at issue must prevail as an exception to a statute

more general in character.” Esteve v. Allstate Ins. Co., 351 So.2d 117, 121 (La.

1977). If these were the only principles at issue, the analysis would be likely be

complete and Unisys would prevail because the court would be constrained to hold

that the authorization in La. R.S. 36:251(A) for LDH to sue and be sued is a more

specific law than the authorization in La. R.S. 13:5036 for the Attorney General to

file lawsuits. However, and unlike Abbott Laboratories, Inc., the Attorney General

not only relies on the statutory authority to file suit under La. R.S. 13:5036, but also

relies on the constitutional authority to do so under La. Const. art. IV, § 8.6

        To restate the analysis to this point, Unisys relies on LDH’s statutory right to

sue and be sued, whereas the Attorney General relies on the constitutional right of the

Attorney General to file civil lawsuits. Unisys contends that the fact the legislature

expressly conferred a right to sue on LDH means that LDH’s right is exclusive and

precludes the Attorney General from filing lawsuits innvolving the Medicaid program

administered by LDH. The state contends that the Attorney General’s constitutional

authority to file lawsuits is broad, if not unfettered, and enables the Attorney General

to bring the instant lawsuit. However, the legislature has seen fit to specifically


6
  The appellate court’s decision in Abbott Laboratories, Inc. was based on the observation that the
MAPIL and LUTPA statutes conferred a right of action in favor of the Attorney General. Abbott
Laboratories, Inc., 15-1626 at 8-9, 208 So.3d at 389-90. However, the court found no statutory
authorization for the Attorney General to bring claims for “fraud, negligent misrepresentation,
redhibition, and unjust enrichment.” Unlike the instant case, the Attorney General apparently did
not assert constitutional authority as a basis for a right of action to bring those claims: “the State has
not pointed out to this court, and we have not found, authority for the State to bring its claims outside
of LUTPA and MAPIL for fraud, negligent misrepresentation, redhibition, and unjust enrichment.”
Abbott Laboratories, Inc., 15-1626 at 9, 208 So.3d at 390.

                                                    9
authorize the Attorney General to file lawsuits in certain causes of action. For

example, one need look no further than this case, in which the Attorney General’s

petition cites statutes conferring authority to the Attorney General to bring actions

under LUTPA and MAPIL. The legislature’s express grant of authority in certain

causes of action tends to undermine the breadth that the Attorney General would have

this court now interpret La. Const. art. IV, § 8 to confer. Therefore, it might be said

that La. R.S. 36:251(A) (conferring on LDH the right to sue and be sued) and La.

Const. art. IV, § 8 (describing the Attorney General’s right to file lawsuit) are in

conflict. However, this court is tasked with ascertaining whether a conflict between

the cited provisions is merely superficial and whether the substance of these laws can

be harmonized. “[B]ecause it is presumed that the legislature acts within its

constitutional authority in enacting legislation, this court must construe a statute so

as to preserve its constitutionality when it is reasonable to do so.” City of New

Orleans v. Louisiana Assessors’ Ret. & Relief Fund, 05-2548, pp. 12-13 (La.

10/1/07), 986 So.2d 1, 12-13.

       Our analysis continues accordingly, with an aim to harmonize, if possible, the

legislatively-ascribed status of the LDH as “a body corporate with the power to sue

and be sued” and the constitution’s direction that “[a]s necessary for the assertion or

protection of any right or interest of the state, the attorney general shall have authority

(1) to institute, prosecute, or intervene in any civil action or proceeding.” See La.

R.S. 36:251(A); La. Const. art. IV, § 8. This is the first time this court is called on

to examine how these two specific laws relate, but, in a broader sense, this is not a

novel issue. The jurisprudence provides significant and longstanding guidance in

other instances in which a governmental entity has legislatively-conferred status to

“sue or be sued,” and the Attorney General sought to represent that entity.

                                            10
      In State v. Tensas Delta Land Co., 126 La. 59, 52 So. 216 (1910), “the

Attorney General in the name of the state” brought a lawsuit to rescind allegedly

fraudulent land conveyances from Tensas Basin levee district. The targets of the

lawsuit were nine nonresident defendants who allegedly conspired with levee district

commissioners to buy land for “nominal” prices and resell the land for approximately

four times the purchase price. Id. 52 So. at 217. The defendants lodged various

exceptions, including an exception that the state “has no right, power, or authority to

prosecute and maintain this action” in such capacity. Id. 52 So. at 218. As the

Tensas Delta Land Co. defendants further urged, the state had “created the

corporation known as the Board of Levee Commissioners of the Tensas Basin Levee

District, and given it full power to sue and be sued.” Id. Additionally, the state had

“authorized the said board to contract with these defendants in regard to said lands

and to sue to recover the same.” Id.

      The Tensas Delta Land Co. court agreed that neither the Attorney General nor

the state had a right of action that survived the legislature’s conferring corporate

status on a governmental entity with the right to sue and be sued. Id. 52 So. at 221.

As a general proposition, the Tensas Delta Land Co. court rejected an argument for

duplicative rights to sue, akin to the argument the Attorney General has raised in the

instant case, explaining:

             The argument that the said board is nothing more than a mere
      agency or instrumentality of the state, and that therefore the state may
      sue in every case where the said board might sue, contains a manifest
      non sequitur. Every city, town, and parish of the state is a mere agency
      or instrumentality of the state; but no one would venture to say that the
      Attorney General could ignore the existence of these corporations and
      enforce, in the name of the state, any cause of action which any of them
      might have.

            The legislative control over corporations of the character of this
      levee board is much more complete than over municipal corporations

                                          11
      proper and parish–it made them, and can at any time abolish them, so
      long as the obligations of their contracts are not thereby impaired–but
      these corporations have their existence and exercise their functions by
      and under the Constitution and statutes of the state, and so long as these
      established laws remain in force it is they which must regulate the
      property and other rights of said corporations and their modes of action,
      and the disposition of their property, and their rights to sue and to be
      sued. If one of these corporations have a right of action, the proper
      functionary to enforce same is the governing body of the corporation,
      and not the Attorney General, or the state.

Id. To the general proposition that the state and Attorney General have no right to

sue duplicative of the statutory right to sue conferred on a governmental entity, this

court provided an exception:

      [I]t is true that if the governing body of one of these corporations fails
      in its duty to bring a suit which clearly it ought to bring, the courts may
      (only, however, under highly exceptional circumstances) allow any
      citizen or taxpayer of the district to bring the suit; and, in such a case,
      the same privilege might for the same reason be extended to the state;
      but nothing of that kind is pretended in this case.

Id.

      After Tensas Delta Land Co., this court visited the question of whether the

Attorney General or a state agency, the Louisiana highway commission, had authority

to hire counsel to represent the highway commission. Saint v. Allen, 172 La. 352,

134 So. 246, 246-47, 249 (1931). The legislature had established that the highway

“[c]ommission shall be a body corporate and as such may sue and be sued, plead and

be impleaded, in any Court of Justice.” Id., 134 So. at 247 (quoting 1921 La. Acts

Ex. Sess. 95 § 3). Relying on “the provisions of the Constitution, creating the office

of Attorney General and defining the duties thereof,”7 the Attorney General in Allen

7
      The constitutional provision then in effect, in pertinent part, indicated:

              The Attorney General and the assistants … shall attend to, and ha
      ve charge of all legal matters in which the State has an interest, or to which the State
      is a party, with power and authority to institute and prosecute or to intervene in any
      and all suits or other proceedings, civil or criminal, as they may deem necessary for
      the assertion or protection of the rights and interests of the State.


                                                12
argued he had the authority to hire counsel and that any legislation to the contrary

was unconstitutional. Id., 134 So. at 246-47.

       The Allen court rejected the Attorney General’s resort to the constitutionally

described duties as a justification to override the separate nature of the highway

commission as established by the legislature. The court explained:

              It was not intended that the word, “interest,” used in this section
       [La. Const. 1921 art. VII, § 56], should be received or interpreted in its
       broadest sense, in connection with the interests, possessed by the state.
       Such an interpretation would make the accomplishment of the duties of
       the Attorney General and his assistants, next to impossible, if not
       impossible. Therefore, so far as relates to the Constitution, that
       instrument, with reference to the duties of the Attorney General and his
       assistants, has confined, by implication, the duties, there demanded to
       be rendered, to those interests, possessed by the state, as a distinct entity,
       and has left it to the Legislature to impose such other duties upon those
       officials as it may deem proper to do from time to time.

Id.

       The Allen court also rejected two arguments the Attorney General essentially

reproduces in the instant case. Those arguments, as stated in Allen, are that the

Attorney General has authority to represent the governmental agency because: 1) all

relevant contracts were “made in the name of the state,” and 2) because “the state

provides the commission with funds with which to discharge the purposes of its

creation.” Allen, 134 So. at 249. This court explained:

       These facts, however, are insufficient to make the commission and the
       state one and the same. They merely show that the commission is an
       agency of the state. It does not even follow that, because contracts for
       highway improvements must be entered into in the name of the state,
       suits on such contracts should be brought by the state or against it, for
       the commission, as a body corporate, is given express power to sue and
       be sued, which shows that such suits (which might be reasonably
       expected to constitute the greater part of the litigation in which the
       commission might become involved) should be instituted by the
       commission, and not by the state.



Allen, 134 So. at 247 (quoting La. Const. 1921 art. VII, § 56).

                                                13
Id. The Allen court reasoned that unless the legislature provided otherwise, the

Attorney General’s constitutionally-described duties were limited to representing the

state, not its agencies:

             Our conclusions therefore are that the Constitution, in defining
      the duties of the Attorney General and his assistants, confines those
      duties, by implication, to the state, as a distinct entity from its corporate
      agencies, and to the duties imposed upon those officials by law, and that
      the Louisiana highway commission is one of those agencies, and hence
      the duties and powers of the Attorney General and his assistants do not,
      by virtue of the Constitution, save as some of those duties may be
      prescribed by statute, attach to the commission.

Id.

      As a last analytical step in Allen, this court examined “whether any statute of

the state imposes upon the Attorney General and his assistants the duty of

representing the commission, and this, to the exclusion of the right, on the part of the

commission, to employ other counsel.” Id., 134 So. at 249. This court found no such

statute and concluded the power to represent the commission was off-limits to the

Attorney General because of the “implied power to employ counsel …, arising out of

the power to sue and be sued.” Id. 134 So. at 250.

      In State ex rel. Jones v. Doucet, 203 La. 743, 14 So.2d 622 (1943), this court

again examined the authority of the Attorney General to bring litigation on the state’s

behalf in light of another governmental entity having the capacity to sue and be sued.

The Attorney General alleged a “former sheriff of St. Landry Parish … misused and

otherwise misappropriated” funds totaling $25,473.30 “during his tenure of office.”

Id. 14 So.2d at 623. The Attorney General further contended “that if the alleged

irregularities had not occurred there would exist a surplus in the Sheriff’s Salary Fund

of St. Landry Parish to be remitted … to the State of Louisiana and to its various

taxing bodies of St. Landry Parish.” Id. The Doucet court ruled “that the State of


                                           14
Louisiana is entitled to recover herein that portion of the alleged surplus in the

Sheriff’s Salary Fund due and owing to it; but with respect to those funds belonging

to its political subdivisions it has neither a cause nor right of action.” Id. 14 So.2d

at 626.

      This court in Doucet rejected the Attorney General’s argument that his

constitutional “duty of representing the state in all legal matters in which it has an

interest” gave the state a right of action. Id. 14 So.2d at 625. The court explained

that the Attorney General’s constitutional duty does not result in the state “thereby

[being] granted an interest in claims belonging to its subdivision.” Id. This court’s

jurisprudence, including Tensas Delta Land Co., supra, demonstrates “the

fundamental proposition that, in the absence of constitutional or statutory provisions

to the contrary, the state cannot stand in judgment on a cause of action that is the

property of one of its political subdivisions which has the right to sue and be sued.”

Doucet, 14 So.2d at 625.

      Of great importance for the instant case, the Doucet court acknowledged the

general rule and an exception established in Tensas Delta Land Co. The general

rule was described in this manner:

             It has long been settled in our jurisprudence that as a general rule
      the state is without authority to institute suit on a cause of action
      belonging to a political subdivision that possesses the right to sue and
      be sued. This was held in State v. Tensas Delta Land Company,
      Limited, 1910, 126 La. 59, 52 So. 216, 221 … .

Doucet, 14 So.2d at 624.       The exception, explained in terms of the “highly

exceptional circumstances” noted in Tensas Delta Land Co., was described as

follows:

             Of course, if a political subdivision should neglect or refuse to
      institute suit and to assert its rights as beneficiary of a claim, which is
      not shown to exist in the instant controversy, an altogether different

                                          15
      situation would arise. Respecting a matter of that nature, the following
      language from the Tensas Delta Land Company decision, supra, is
      appropriate:

             Again, it is true that if the governing body of one of these
             corporations fails in its duty to bring a suit which clearly it
             ought to bring, the courts may (only, however, under
             highly exceptional circumstances allow any citizen or
             taxpayer of the district to bring the suit; and, in such a case,
             the same privilege might for the same reason be extended
             to the state; but nothing of that kind is pretended in this
             case. . . .

Doucet, 14 So.2d at 625.

      Having discerned a general rule that the Attorney General lacks authority to file

suit for a cause of action more properly brought by a governmental entity with the

capacity to sue and be sued, the viability of this general rule must be determined.

Over the course of many decades, this court has left intact these seminal rulings, with

the occasion only to apply the general rule and the consequences that flow from it, not

the exception. For example, citing inter alia Tensas Delta Land Co., in State, Dep’t

of Highways v. City of Pineville, 403 So.2d 49, 52 (La. 1981), the court found, as

a consequence of the general rule, that:

      the “State,” for the purposes of the constitutional immunity from
      prescription, does not include a state agency which is a body corporate
      with the power to sue and be sued and which, when vested with a cause
      of action, is the sole party capable of asserting it. Regardless of its
      status as an instrumentality of the state, such an agency remains a
      distinct legal entity subject to claims of prescription except where the
      law provides otherwise.

Also recognizing the continued viability of the rulings in Doucet, Allen, and Tensas

Delta Land Co., it was necessary to distinguish those cases in State ex rel. Guste v.

Simoni, Heck & Associates, 331 So.2d 478, 482 (La. 1976), as follows: “The present

situation is distinguishable from those [cases] therein concerned, if only in that here,

not only the state agency, but the state itself (as ultimate owner of the building), has


                                           16
a cause of action arising out of defective construction of a building for it by a state

agency.”

      Two reasons compel the conclusion that the general rule remains viable today.

First, although the rule was most recently found applicable under the Louisiana

Constitution of 1921, the relevant wording was streamlined in the present

Constitution of 1974, but remains substantially unchanged:

             The Attorney General … shall attend to, and have charge of all
      legal matters in which the State has an interest, or to which the State is
      a party, with power and authority to institute and prosecute or to
      intervene in any and all suits or other proceedings, civil or criminal, as
      they may deem necessary for the assertion or protection of the rights and
      interests of the State.

La. Const. 1921 art. VII, § 56.

            As necessary for the assertion or protection of any right or interest
      of the state, the attorney general shall have authority (1) to institute,
      prosecute, or intervene in any civil action or proceeding … .

La. Const. 1974 art. IV, § 8.

      Indeed, as recounted by the coordinator of legal research for the Constitutional

Convention of 1973, there was no substantive change intended for the Attorney

General’s powers in civil cases between the Constitution of 1974 and the Constitution

of 1921:

            Article IV, Section 8, … continues provisions for an attorney
      general elected statewide for a four-year term. Little dispute arose over
      the provision making him “the chief legal officer of the state” and
      continuing his powers in civil matters, but much controversy was
      generated by proposals establishing his powers in criminal matters … .
      [Emphasis added; footnote ommitted.]

Lee Hargrave, The Judiciary Article of the Louisiana Constitution of 1974, 37 La. L.

Rev. 765, 831 (Spring 1977). A second reason for upholding our longstanding

jurisprudential interpretation of the constitutional powers of the Attorney General,

after the enactment of the present constitution, is found in this explanation:

                                          17
      [C]onsistent with another of our well-settled rules of interpretation, we
      presume that the legislature was aware of the interpretation that had
      been given to the constitutional provisions by the jurisprudence. State,
      Department of Public Safety and Corrections, Office of State Police,
      Riverboat Gaming Division v. Louisiana Riverboat Gaming
      Commission and Horseshoe Entertainment, 94-1872, 94-1914, p. 17
      (La.5/22/95), 655 So.2d 292, 301 n.10 (reciting the rule that those who
      enact laws are presumed to act deliberately and with full knowledge of
      existing laws on the same subject, with awareness of court cases and
      well-established principles of construction, and with knowledge of the
      effect of their acts and a purpose in view).

Fruge v. Bd. of Trustees of Louisiana State Employees’ Ret. Sys., 08-1270, p. 18

(La. 12/2/08), 6 So.3d 124, 136. As in Fruge, the lack of an intended change in

meaning of the text justifies applying in the present day this court’s jurisprudence

interpreting an earlier constitutional provision. See id., 08-1270 at 19, 6 So.3d at 136.

“Although we are bound by the words of the statutes and the constitution, as we have

noted, once this court has ruled on an issue, we should be extremely reluctant to

change our position, as both the legislature and society should be able to rely on the

finality of our pronouncements. Stability and predictability in the law demand such

a result.” Id., 08-1270 at 20, 6 So.3d at 137.

      Having found the longstanding interpretation of the Attorney General’s

constitutional authority remains viable, its application in the instant case is addressed.

The general rule provides that where, as here, a governmental entity has the capacity

to sue and be sued, the Attorney General has no right of action. That does not,

however, end the inquiry. To all general rules there may be exceptions. The

jurisprudence on the powers of the Attorney General relative to governmental entities

with the capacity to sue and be sued has provided examples of exceptions to the

general rule. “[N]eglect or refus[al] to institute suit” by a governmental entity

statutorily authorized to bring suit are two examples that may justify the Attorney

General having a right of action that otherwise would solely belong to the

                                           18
governmental entity. See Doucet, 14 So.2d at 625. In the record here, there are no

allegations of neglect or refusal on the part of LDH to file suit against Unisys. Again,

the inquiry is not at an end because the jurisprudence placed “neglect or refusal” as

merely two examples within the category of “highly exceptional circumstances” that

may justify the Attorney General having a right of action. See Doucet, 14 So.2d at

625 (quoting Tensas Delta Land Co., 52 So. at 221).

      The state has pleaded “highly exceptional circumstances” in the present case.

A de novo review reveals the Attorney General’s petition is replete with allegations

of Unisys playing an essential role in the administration of Louisiana’s Medicaid

program and allegations of the state maintaining an interest in the contract with

Unisys through ongoing legislative oversight. A relatively small sampling from the

state’s twenty-page petition suffices:

      1. For the last several decades, the Defendants have operated as the
      State’s fiscal intermediary and processed payments for millions of
      Medicaid prescription drug claims each year. ...

      ....

      7. … The Molina Defendants have engaged in the business of operating,
      maintaining, implementing and managing the Louisiana Medicaid
      Management Information System (“LMMIS”) since at least May of 2010
      ….

      8. … Unisys Corporation has engaged in the business of operating,
      maintaining, implementing and managing the LMMIS since at least
      January of 1984. …

      ....

      10. … Additionally, the Defendants play and/or played an important
      role in educating providers enrolled in Louisiana Medicaid.

      ....

      18. … Defendants assumed operational liability of the LMMIS for the
      Louisiana Medicaid program in return for substantial payment from the
      State.

                                          19
19. The LMMIS is the core tool used to administer the State’s Medicaid
reimbursement payments … . The Defendants’ role, as the State’s fiscal
agent for the processing of Medicaid reimbursements, is to assist the
State in meeting its healthcare administration goals, including reducing
costs by adapting the LMMIS to the current realities and changes within
Medicaid, including legally required changes.

20. At all times relevant to this action, the Defendants were
contractually obligated to create and implement design changes to the
LMMIS in accordance with Louisiana’s statutory and administrative
formulas that comply with State and federal mandates. ...

....

26. [T]he State requested that the Defendants change the computer
program and/or parameters the Defendants used to process
reimbursements for prescription drugs to reflect the most recent
reimbursement formula. ...

27. At all times relevant to this action, the Defendants were
contractually and legally responsible for creating, designing, and
implementing all of the above reimbursement formula changes to the
LMMIS that comply with State and federal mandates, in order to
accurately process Louisiana Medicaid's pharmacy provider claims for
reimbursement in accordance with Louisiana's statutory and
administrative formulas. ...

....

29. The State’s contract with the Defendants expressly incorporated the
terms of the State’s Solicitation for Proposal (“SFP”). As part of the
contract, the Defendants warranted that they would comply "with all
requirements of the SFP and all State and Federal regulations as they
exist at the time of the Contract and as subsequently amended.” …

30. ... The SFP explains that:

       ... LMMIS is operated in accordance with applicable
       State and Federal policies as they relate to the
       editing and payment of Medicaid claims. As a
       result, it is important that the reference files are
       promptly and accurately updated to reflect
       approved changes and policies.

...

....



                                   20
      32. … The Defendants are further required to “maintain full, current
      and detailed knowledge of published Federal and State legislation,
      regulations, and guidelines pertinent to discharging [the Defendants’]
      responsibilities as the fiscal intermediary.”

      As reflected in these quoted allegations, Unisys was required to monitor and

to adjust LMMIS not only to LDH’s and the federal government’s regulations, but

also to the state’s legislative oversight. It is virtually impossible to set forth precise

guidelines for when the Attorney General has pleaded “highly exceptional

circumstances” sufficient to state a right of action when another governmental entity

has capacity to sue and be sued regarding a contract. This is necessarily a case-by-

case determination. That said, where, as here, the causes of action are premised on

a contract to perform governmental functions, the more the petition reflects that the

state remains involved in the contract by providing ongoing legislative oversight, the

more likely “highly exceptional circumstances” may be found.

      This approach of evaluating a petition’s allegations of ongoing legislative

oversight as a measure of “highly exceptional circumstances” is consistent with this

court’s seminal decision in Tensas Delta Land Co. The Tensas Delta Land Co.

court recognized the legislature exerted a baseline control over all state corporations,

inasmuch as the legislature “made them, and can at any time abolish” state

corporations, but nevertheless recognized the exception for the attorney general to

have a right of action under “highly exceptional circumstances.” Id., 52 So. at 221.

Therefore, drawing from Tensas Delta Land Co., this court finds “highly exceptional

circumstances” cannot arise from the baseline ability of the legislature to create or

abolish certain governmental entities.       Nor does this court find here “highly

exceptional circumstances” arise from routine legislative oversight, which may said

to exist from the legislature’s statutory framework in effect at the time a contract is


                                           21
confected. Rather, the petition’s allegations that a contractor must observe and

conform to a broad, yet often-changing legislative landscape, here rise to the level of

“highly exceptional circumstances” sufficient to justify the Attorney General having

a right of action.

      Unisys, in its brief, contends that allowing the Attorney General to have a right

of action on the strength of the allegations in the petition would essentially condone

“the Attorney General’s … unwarranted attempt to grab power rightfully belonging

solely to LDH.” We do not subscribe to this cynical view, but nothing in this opinion

should be construed as giving the Attorney General or his representatives carte

blanche to withstand an exception of no right of action by manufacturing highly

exceptional claims in future cases. Indeed, our holding here that the state has pleaded

“highly exceptional circumstances” greatly rests on a finding that the state’s

allegations of Unisys’ activities are allegations that are recognizable–on their face–as

activities integral to governmental functions. See La. C.C.P. art. 931 (“evidence may

be introduced to support or controvert” an exception of no right of action, only “when

the grounds thereof do not appear from the petition”). That said, but without

expressing any opinion whatsoever on the merits of the allegations regarding Unisys’

involvement in Louisiana’s Medicaid program, it is a straightforward matter to

compare the petition’s allegations to governmental functions described by state and

federal law. “As required by federal law, see 42 C.F.R. § 431.10, Louisiana law vests

LDH as the sole agency authorized by law to administer the State’s Medicaid

program. See La. R.S. 36:254(A)(6)(a) and (D)(1)(a)(i).” Indeed, these citations of

governmental functions have been quoted directly from Unisys’ brief to this court,

and apply to the allegations of the petition. Significantly, for this court’s finding that

“highly exceptional circumstances” bring this matter within the Attorney General’s

                                           22
purview, the governmental functions described in the petition are highly regulated not

only by Louisiana law but also by federal law.

      As grounds for granting Unisys’ exception of no right of action, the court

below relied on its earlier decision in Abbott Laboratories Inc.. However, Abbott

Laboratories, Inc. is distinguishable because there the state asserted causes of action

based on the allegation that “pharmaceutical manufacturers, distributors, marketers,

and sellers … had engaged in an unlawful and deceptive scheme to receive Medicaid

payments for drugs that were not eligible for Medicaid payments.”               Abbott

Laboratories Inc., 15-1626 at 3-4, 208 So.3d at 386 (emphasis added). Here, in

contrast, the state alleges Unisys was responsible in its role as the state’s “fiscal

intermediary” in the Medicaid program for improperly paying for drug reimbursement

claims.

      Notably, the parties have presented, at great length, their vastly divergent views

on the extent to which the state, as distinct from LDH, is a party to the LMMIS

contracts. It is unnecessary for this court to resolve that dispute to ascertain that the

state through the Attorney General has a right of action, given the allegations of

Unisys’ involvement with governmental functions. Therefore, this court expresses

no view on whether the state is, itself, a party to the contract and, likewise, expresses

no view on the related argument brought by the Attorney General that the use of state

general funds justifies the state having a right of action.

                                   CONCLUSION

      LDH has the statutorily-conferred capacity to sue and be sued. See La. R.S.

36:251(A). The Attorney General is constitutionally authorized “[a]s necessary” to

bring civil lawsuits on behalf of the state. See La. Const. 1974 art. IV, § 8. Prior

jurisprudence of this court, formulated under earlier state constitutions with language

                                           23
substantively retained in the current constitution, holds that in such a situation, as a

general rule, only the governmental agency with the capacity to sue and be sued has

a right of action. An exception to that general rule exists for “highly exceptional

circumstances.”

      Our jurisprudential general rule and its exception remain viable under today’s

constitutional terminology authorizing the Attorney General to file suits “[a]s

necessary.” La. Const. 1974 art. IV, § 8. Stated simply, given that LDH is statutorily

authorized to sue and be sued, it only becomes “necessary” for the Attorney General

to file suit–relating to programs for which LDH could file the lawsuit–under “highly

exceptional circumstances.” Based on the pleadings, such circumstances have been

identified in this case. Specifically, the Attorney General on behalf of the state has

a right of action to bring a lawsuit against a private entity that has allegedly

contracted to perform governmental functions essential to a program governed by

both state and federal law where performance of the contract is subject to ongoing

legislative oversight.

      The contrary decision of the appellate court is hereby vacated, and this matter

is remanded to the district court for further proceedings consistent with this opinion.

      VACATED; REMANDED.




                                          24
05/08/19



                       SUPREME COURT OF LOUISIANA

                                   No. 2018-CC-1768

        THE STATE OF LOUISIANA, EX REL. JAMES D. "BUDDY"
                CALDWELL, ATTORNEY GENERAL

                                         VERSUS

                   MOLINA HEALTHCARE,
   INC; MOLINA INFORMATION SYSTEMS, L.L.C. D/B/A MOLINA
 MEDICAID SOLUTIONS; PARAMAX SYSTEMS CORPORATION; AND
                   UNISYS CORPORATION

    ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST
           CIRCUIT, PARISH OF EAST BATON ROUGE

JOHNSON, Chief Justice, additionally concurs and assigns reasons.

       I agree with the majority that the Attorney General has a right to prosecute

this lawsuit, but I find the majority opinion is too narrowly drawn.

       In my view, the fact that LDH has a right of action does not preclude the state

from also having a right of action. Although LDH is statutorily defined as “a body

corporate with the power to sue and be sued” by La. R.S. 36:251, La. Const. art. IV,

§ 8 gives the Attorney General the power to institute a civil action “as necessary for

the assertion or protection of any right or interest of the state.” LDH is an agency of

the state, authorized to act on behalf of the state to carry out certain duties. LDH is

the state agency contracted to administer the Medicaid program. However, the state

has not abdicated its power to bring a claim to protect the state’s interests in this

case. It is clear the state is the real party in interest under the contract. It is the state

that suffers damages if the contract is breached and funds are misspent, as the state

is the source of funding and the party responsible to the federal government for

federal funds. I find no authority to give LDH the sole right to judicially pursue the

claims alleged in the petition. Unquestionably, the state has the right to recover

                                             1
overpayments of the state’s money and federal money for which the state has fiscal

liability. Thus, the court of appeal opinion is properly vacated.




                                          2
05/08/19



                   SUPREME COURT OF LOUISIANA

                             No. 2018-CC-1768

       THE STATE OF LOUISIANA, EX REL. JAMES D. "BUDDY"
               CALDWELL, ATTORNEY GENERAL

                                  VERSUS

                  MOLINA HEALTHCARE,
  INC; MOLINA INFORMATION SYSTEMS, L.L.C. D/B/A MOLINA
MEDICAID SOLUTIONS; PARAMAX SYSTEMS CORPORATION; AND
                  UNISYS CORPORATION

   ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST
          CIRCUIT, PARISH OF EAST BATON ROUGE



     GUIDRY, J., additionally concurs for the reasons assigned by Chief Justice

Johnson.
05/08/19



                    SUPREME COURT OF LOUISIANA

                              No. 2018-CC-1768

       THE STATE OF LOUISIANA, EX REL. JAMES D. "BUDDY"
               CALDWELL, ATTORNEY GENERAL

                                   VERSUS

                  MOLINA HEALTHCARE,
  INC; MOLINA INFORMATION SYSTEMS, L.L.C. D/B/A MOLINA
MEDICAID SOLUTIONS; PARAMAX SYSTEMS CORPORATION; AND
                  UNISYS CORPORATION

    ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST
           CIRCUIT, PARISH OF EAST BATON ROUGE

GENOVESE, J., additionally concurs for the reasons assigned by Chief Justice

Johnson.
