ACCEPTED

15-24-00114-CV FIFTEENTH COURT OF APPEALS

AUSTIN, TEXAS

9/29/2025 5:22 PM No. 15-24-00114-CV CHRISTOPHER A. PRINE

CLERK

In the Court of Appeals 15th COURT FILED IN OF APPEALS for the Fifteenth Judicial District9/29/2025 5:22:17 PM

AUSTIN, TEXAS

CHRISTOPHER A. PRINE

Cecile Erwin Young, in her Official Capacity as the Clerk Executive Commissioner of the Texas Health and Human Services Commission; Molina Healthcare of Texas, Inc.; and Aetna Better Health of Texas, Inc., Appellants, v. Cook Children’s Health Plan, Texas Children’s Health

Plan, Superior Health Plan, Inc., and Wellpoint Insurance Company, Appellees.

On Appeal from the 353rd Judicial District Court, Travis County

BRIEF FOR APPELLANT CECILE ERWIN YOUNG

Ken Paxton William R. Peterson Attorney General of Texas Solicitor General Brent Webster William F. Cole First Assistant Attorney General Principal Deputy Solicitor General Office of the Attorney General Cory A. Scanlon P.O. Box 12548 (MC 059) Assistant Solicitor General Austin, Texas 78711-2548 State Bar No. 24104599 Tel.: (512) 936-1700 [email protected] Fax: (512) 474-2697 Jeffrey A. Stephens Assistant Solicitor General Mohmed I. Patel Assistant Attorney General Counsel for Cecile Erwin Young

Oral Argument Requested

Identity of Parties and Counsel Appellants:

Cecile Erwin Young, in her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission Molina Healthcare of Texas, Inc.

Aetna Better Health of Texas, Inc.

Appellate and Trial Counsel for Appellant Cecile Erwin Young: Ken Paxton Brent Webster William R. Peterson William F. Cole Cory A. Scanlon (lead counsel) Jeffrey A. Stephens Mohmed I. Patel Jennifer Cook Thomas Bevilacqua Stephanie Criscione Reuben Blum Office of the Attorney General P.O. Box 12548 Austin, Texas 78711-2548 (512) 936-1700 [email protected]

Appellate and Trial Counsel for Appellant Molina Healthcare of Texas, Inc.: Jason R. LaFond State Bar No. 24103136 Cheryl Joseph LaFond Scott Douglass & McConnico LLP 303 Colorado Street, Suite 2400 Austin, Texas 78701 (512) 495-6300 [email protected] i

Appellate and Trial Counsel for Appellant Aetna Better Health of Texas, Inc.: Joseph R. Knight State Bar No. 11601275 Ewell, Brown, Blanke & Knight LLP 111 Congress Avenue, 28th Floor Austin, Texas 78701 (512) 770.4010 [email protected]

Appellees:

Cook Children’s Health Plan Texas Children’s Health Plan Superior Health Plan, Inc.

Wellpoint Insurance Company

Appellate and Trial Counsel for Appellee Cook Children’s Health Plan: Amy Warr Karen C. Burgess Anna M. Baker Katie Dolan-Galaviz Alexander Dubose & Jefferson LLP Burgess Law PC 100 Congress Avenue, Suite 1450 404 West 13th Street Austin, Texas 78701-2709 Austin, Texas 78701-1825 (512) 482-9300 (512) 482-8808 [email protected] [email protected] [email protected] Matthew P. Gordon Perkins Coie LLP 1201 Third Avenue, Suite 4900 Seattle, Washington 98101-3099 (206) 359-8000 [email protected] ii

Appellate and Trial Counsel for Appellee Texas Children’s Health Plan: Susan Feigin Harris Thomas A. Coulter Warren S. Huang Norton Rose Fulbright US, LLP Norton Rose Fulbright US, LLP 799 9th Street, NW, Suite 1000 1550 Lamar, Suite 2000 Washington, D.C. 20001 Houston, Texas 77010 (202) 662-0200 (713) 651-5151 tom.coulter@nortonroseful- susan.harris@nortonroseful- bright.com bright.com warren.huang@nortonroseful- Jeff J. Wurzburg bright.com Norton Rose Fulbright US, LLP 111 W. Houston Street, Suite 1800 Paul Trahan San Antonio, Texas 78205 Norton Rose Fulbright US, LLP (210) 224-5575 98 San Jacinto Boulevard, Suite 1100 Jeff.wurzburg@nortonroseful- Austin, Texas 78701 bright.com (512) 474-5201 [email protected]

Appellate and Trial Counsel for Appellee Superior Health Plan, Inc.: Rich Phillips Karen D. Walker Holland & Knight, LLP Holland & Knight, LLP One Arts Plaza 315 S. Calhoun Street, Suite 600 1722 Routh Street, Suite 1500 Tallahassee, Florida 32301 Dallas, Texas 75201 (850) 425-5612 [email protected] [email protected]

Theresa Wanat James E. Cousar Holland & Knight, LLP Holland & Knight, LLP 811 Main Street, Suite 2500 98 San Jacinto Blvd Houston, Texas 77002 Austin, Texas 78701 (713) 821-7000 (512) 469-6112 [email protected] [email protected] iii

Appellate and Trial Counsel for Appellee Wellpoint Insurance Co.: Robert F. Johnson III Benjamin J. Grossman, Foley & Lardner, LLP Foley & Lardner, LLP 600 Congress Avenue, Suite 3000 106 E. College Ave., Suite 900, Austin, Texas 78701 Tallahassee, Florida 32301 (512) 542-7000 (850) 222-6100 [email protected] [email protected]

Michelle Y. Ku Brantley A. Smith Foley & Lardner, LLP, 2021 McKinney, Suite 1600 Dallas, Texas 75201 (214) 999-3000 [email protected] [email protected] iv

Table of Contents

Page

Identity of Parties and Counsel ................................................................................i Index of Authorities .............................................................................................. vii Record References ............................................................................................... xiv Statement of the Case .......................................................................................... xiv Statement Regarding Oral Argument .................................................................... xv Issues Presented ................................................................................................... xv Introduction ............................................................................................................ 1 Statement of Facts .................................................................................................. 2 I. Legal Background ...................................................................................... 2 II. Factual Background ................................................................................... 4 III. Procedural History .................................................................................... 7 Summary of the Argument ...................................................................................... 8 Standard of Review ............................................................................................... 10 Argument.............................................................................................................. 10 I. The Trial Court Lacked Subject-Matter Jurisdiction Because Plaintiffs’ Claims Are Unripe and Unexhausted. ..................................... 11 II. The Trial Court Erred in Temporarily Enjoining the Commissioner.......................................................................................... 16 A. Plaintiffs lack a probable right to relief on their ultra vires claims. ............................................................................................... 17 1. Plaintiffs’ ultra vires claims are not viable. .................................. 17 a. The Commissioner has absolute discretion to determine which contracts provide the “best value” to the State. .......................................................................... 19 b. The manner of giving statutory preferences is not specified in the statutes and is within HHSC’s discretion. ............................................................................ 22 c. Required disclosure of materials under PIA is not ultra vires. ............................................................................ 32 v d. The trial court’s order erroneously determined that the Commissioner violated the Texas due course provision. ............................................................................. 34 e. The trial court justified the temporary injunction with statutory mandates that do not exist. ............................ 35 2. Plaintiffs’ claims seek an impermissible retrospective remedy. ...................................................................................... 38 a. The procurement statutes contain no “redo” remedy. ................................................................................ 39 b. Redoing the procurement is fundamentally retrospective. ....................................................................... 41 B. Equity favors the Commissioner. ...................................................... 43 C. The temporary injunction fails to comply with the mandatory requirements of Rule 683. ................................................................. 51 D. The trial court erred by excluding evidence demonstrating HHSC’s scoring methodology. ......................................................... 53 1. The consensus scoring rubrics are admissible and probative. ...... 54 2. The exclusion is almost certain to result in an improper judgment. ................................................................................... 56 Prayer ................................................................................................................... 58 Certificate of Compliance ..................................................................................... 58 vi

Index of Authorities

Page(s) Cases:

Abbott v. Anti-Defamation League Austin, Sw., & Texoma Regions, 610 S.W.3d 911 (Tex. 2020) ........................................................................ 11, 16 Atl. Mut. Ins. Co. v. Middleman, 661 S.W.2d 182 (Tex. App.—San Antonio 1983, writ ref’d n.r.e.) ................... 57 Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) ........................................................................ 41 Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) ........................................................................ 43, 45 Caffe Ribs, Inc. v. State, 487 S.W.3d 137 (Tex. 2016) ....................................................................... 56, 57 City of Austin v. Util. Assocs., Inc., 517 S.W.3d 300 (Tex. App.—Austin 2017, pet. denied) ............................. passim City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) ............................................................................ 17 Cockrell Inv. Partners, L.P. v. Middle Pecos Groundwater Conservation Dist., 676 S.W.3d 677 (Tex. App.—El Paso 2023, pet. granted) ................................ 15 Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238 (Tex. 1985) ............................................................................. 57 Elcon Enters., Inc. v. Wash. Metro. Area Transit Auth., 977 F.2d 1472 (D.C. Cir. 1992)................................................................... 23, 48 Fireman’s Fund Cnty. Mut. Ins. Co. v. Hidi, 13 S.W.3d 767 (Tex. 2000) ...............................................................................40 Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d 215 (Tex. App.—Fort Worth 2009, pet. denied) ........................... 47 GT & MC, Inc. v. Tex. City Ref., Inc., 822 S.W.2d 252 (Tex. App.—Houston [1st Dist.] 1991, writ denied) ............... 57 Hall v. McRaven, 508 S.W.3d 232 (Tex. 2017) ............................................................ 17, 18, 20, 21 Heckman v. Williamson County, 369 S.W.3d 137 (Tex. 2012) ............................................................................. 47 vii

Hensley v. State Comm’n on Jud. Conduct, 692 S.W.3d 184 (Tex. 2024) ............................................................................ 14 Honors Acad., Inc. v. TEA, 555 S.W.3d 54 (Tex. 2018) ......................................................................... 30, 35 Hous. Belt & Terminal Ry. v. City of Houston, 487 S.W.3d 154 (Tex. 2016) .................................................................. 17, 20, 26 Indep. Capital Mgmt., L.L.C. v. Collins, 261 S.W.3d 792 (Tex. App.—Dallas 2008, no pet.) ......................................... 52 InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640 (Tex. 1986) ............................................................................. 52 In re J.F.C., 96 S.W.3d 256 (Tex. 2002) .............................................................................. 10 Jackson v. SOAH, 351 S.W.3d 290 (Tex. 2011) ............................................................................. 33 Jordan v. Landry’s Seafood Rest., Inc., 89 S.W.3d 737 (Tex. App.—Houston [1st Dist.] 2002, pet. denied)................. 47 Klumb v. Hous. Mun. Emps. Pension Sys., 458 S.W.3d 1 (Tex. 2015) ................................................................................. 27 In re Luther, 620 S.W.3d 715 (Tex. 2021) (orig. proceeding) .......................................... 52, 53 M. Steinthal & Co. v. Seamans, 455 F.2d 1289 (D.C. Cir. 1971) ......................................................................... 48 Marble Falls ISD v. Scott, 275 S.W.3d 558 (Tex. App.—Austin 2008, pet. denied) .................................. 15 McCraw v. Maris, 828 S.W.2d 756 (Tex. 1992)............................................................................. 57 McElroy v. Unifund CCR Partners, No. 14-07-00661-CV, 2008 WL 4355276 (Tex. App.—Houston [14th Dist.] Aug. 26, 2008, no pet.).................................................................. 56 Morath v. Kingsville ISD, 710 S.W.3d 918 (Tex. App.—15th Dist. 2025, no pet.)..........................39, 40, 41 N. Cypress Med. Ctr. Operating Co., Ltd. v. St. Laurent, 296 S.W.3d 171 (Tex. App.—Houston [14th Dist.] 2009, no pet.) ................... 47 Nettles v. GTECH Corp., 606 S.W.3d 726 (Tex. 2020) ...................................................................... 48, 49 viii

In re Newton, 146 S.W.3d 648 (Tex. 2004) (orig. proceeding) ............................................... 45 State ex rel. Off. of Att’y Gen. v. City of San Marcos, 714 S.W.3d 224 (Tex. App.—15th Dist. 2025, pet. denied)........................ 10, 44 Orion Constr. Corp. v. United States, 125 Fed. Cl. 668 (2016) .................................................................................... 35 Palladian Partners, Inc. v. United States, 783 F.3d 1243 (Fed. Cir. 2015) ......................................................................... 16 Patterson v. Planned Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439 (Tex. 1998) .................................................................. 11, 12, 14 Perkins v. Lukens Steel Co., 310 U.S. 113 (1940) .......................................................................................... 32 Point Energy Partners Permian, LLC v. MRC Permian Co., 669 S.W.3d 796 (Tex. 2023)............................................................................. 12 Riner v. City of Hunters Creek, 403 S.W.3d 919 (Tex. App.—Houston [14th Dist.] 2013, no pet.) ................... 15 Rivercenter Assocs. v. Rivera, 858 S.W.2d 366 (Tex. 1993) ............................................................................. 47 Smith v. Abbott, 311 S.W.3d 62 (Tex. App.—Austin 2010, pet. denied) ..................................... 16 State v. Cent. Expressway Sign Assocs., 302 S.W.3d 866 (Tex. 2009) ....................................................................... 53, 57 State v. Hollins, 620 S.W.3d 400 (Tex. 2020)............................................................................ 44 State v. Loe, 692 S.W.3d 215 (Tex. 2024)....................................................................... 10, 43 State v. Tex. Pet Foods, Inc., 591 S.W.2d 800 (Tex. 1979) ............................................................................. 43 In re State, 711 S.W.3d 641 (Tex. 2024) (orig. proceeding) .....................................43, 45, 47 In re Stetson Renewables Holdings, LLC, 658 S.W.3d 292 (Tex. 2022) (orig. proceeding) ......................................... 39, 41 Sw. Elec. Power Co. v. Lynch, 595 S.W.3d 678 (Tex. 2020) ............................................................................ 12 ix

Sw. Pharmacy Sols., Inc. v. Tex. HHSC, No. 03-11-00802-CV, 2013 WL 3336868 (Tex. App.—Austin June 27, 2013, no pet.).......................................................................................... 2, 18 Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) ............................................................................. 10 In re Tex. DFPS, 696 S.W.3d 240 (Tex. App.—San Antonio 2024, orig. proceeding)................. 32 Tex. Highway Comm’n v. El Paso Bldg. & Constr. Trades Council, 234 S.W.2d 857 (Tex. 1950) ............................................................... 9, 31, 40-41 Tex. Logos, L.P. v. TxDOT, 241 S.W.3d 105 (Tex. App.—Austin 2007, no pet.) ..................................... 1, 22 TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011) ............................................................................. 21 Turner v. Joshua ISD, 583 S.W.2d 939 (Tex. App.—Waco 1979, no pet.) ........................................... 46 Vote.Org v. Callanen, 39 F.4th 297 (5th Cir. 2022)............................................................................. 49 Waco ISD v. Gibson, 22 S.W.3d 849 (Tex. 2000) .............................................................................. 12 Webster v. Comm’n for Law. Discipline, 704 S.W.3d 478 (Tex. 2024) ............................................................................ 14 Wilson v. Community Health Choice Texas, Inc., 607 S.W.3d 843 (Tex. App.—Austin 2020, pet. denied) ............................ 23, 24 Young v. Tex. Parks & Wildlife Dep’t, No. 15-24-00052-CV, 2025 WL 1200947 (Tex. App.—15th Dist. Apr. 24, 2025, no pet. h.) ................................................................................. 30 Constitutuional Provisions, Statutes, and Rules:

Tex. Const. art. I, § 13........................................................................................... 34 28 U.S.C. § 1491(b)(1) ..........................................................................................40 x

Tex. Gov’t Code:

ch. 533............................................................................................................ 3, 4 ch. 536............................................................................................................ 3, 4 ch. 540 ............................................................................................................... 3 ch. 543A ............................................................................................................. 3 ch. 552 ............................................................................................................. 33 § 532.0051 .............................................................................................. xv, 2, 44 § 533.002 .......................................................................................... 5, 18, 25, 37 § 533.002(1)(B) .......................................................................................... 37, 44 § 533.002(6)............................................................................................... 37, 44 § 533.003 ........................................................................................ 23, 26, 27, 28 § 533.003(a)(1)........................................................................................... passim § 533.003(a)(3) .......................................................................................... 18, 29 § 533.004 ................................................................................................... 29, 30 § 533.004(a) ............................................................................................... 23, 30 § 533.004(a)(2) .......................................................................................... 18, 23 § 533.0035............................................................................................... 6, 18, 36 § 536.052 ................................................................................................5, 25, 27 § 536.052(a) .......................................................................................... 18, 23, 28 § 536.052(b) ........................................................................................... 3, 28, 44 § 536.052(d).............................................................................. 18, 23, 24, 27, 28 § 552.002 ......................................................................................................... 33 § 552.221.......................................................................................................... 33 § 552.301-.302.................................................................................................. 33 § 2155 ............................................................................................................ 3, 4 § 2155.076 .......................................................................................................... 3 § 2155.144 .................................................................................................. passim § 2155.144(c) ......................................................................... 3, 18, 19, 24, 26, 49 § 2155.144(d) ........................................................................................ 18, 19, 20 § 2155.144(d)(3) ...............................................................................................20 § 2155.144(d)(5) ......................................................................................... 20, 21 § 2155.144(d)(7) ...............................................................................................20 § 2155.144(d)(11) ....................................................................................... 20, 38 § 2155.144(n) ......................................................................................... 3, 24, 25 xi

Tex. Health & Safety Code:

ch. 62 ................................................................................................................. 3 § 62.051(a) ........................................................................................ xv, 2, 38, 44 § 62.051(b) ....................................................................................................... 38 § 62.051(e) ................................................................................................. 18, 36 § 62.053(3)........................................................................................ xv, 2, 38, 44 § 62.055 ................................................................................................ 18, 32, 38 § 62.155................................................................................................. 18, 28, 38 § 62.155(c)(1) ............................................................................................. 18, 38 Tex. Loc. Gov’t Code:

§ 252.061 .........................................................................................................40 § 262.033 .........................................................................................................40 1 Tex. Admin. Code:

ch. 391 .......................................................................................................... 3, 34 § 391.101 ............................................................................................... 18, 32, 37 § 391.201(d) ..................................................................................................... 24 § 391.209 .......................................................................................... 3, 18, 32, 37 § 391.301 ........................................................................................................ 3, 7 § 391.303(b) ....................................................................................................... 3 § 391.305(a)(1) ............................................................................................15, 25 § 391.307(d) ....................................................................................................... 7 § 391.307(d)(1) ................................................................................................. 18 34 Tex. Admin. Code § 20.208(d)(3) .................................................................... 33 Tex. R. Civ. P.:

683 ................................................................................................... xvi, 9, 51, 53 693 ................................................................................................................... 43 Tex. R. Evid.:

803(6) ........................................................................................................ 54, 55 803(6)(A)-(C) .................................................................................................. 54 803(6)(D) ........................................................................................................ 54 803(6)(E) ......................................................................................................... 54 902................................................................................................................... 55 902(10) ................................................................................................. 54, 55, 56 902(10)(B) ....................................................................................................... 55 902(10)(b) ........................................................................................................ 56 xii

Other Authorities:

Act of May 29, 2023, 88th Leg., R.S., ch. 1170, §1, art. IX, sec. ^[17].09(e), 2023 Tex. Gen. Laws 3573............................................................ 50-51 xiii

Record References “CR” refers to the one-volume clerk’s record of November 1, 2024. “RR” refers to the twenty-volume Reporter’s Record. “Children’s Plan.Mot,” “Superior.Mot,” and “Wellpoint.Mot” will be used to cite the motions for temporary relief filed on July 10, 2025, by Cook Children’s Health Plan and Texas Children’s Health Plan, Superior Health Plan Inc., and Wellpoint Insurance Company.

Statement of the Case Nature of the Case: This is a suit for injunctive and declaratory relief against the Executive Commissioner of the Texas Health & Human Services Commission (HHSC) to halt the procurement of contracts for managed care services to administer the Texas Medicaid and Children’s Health Insurance programs. Losing bidders brought various claims alleging that Appellant Cecile Erwin Young (the Commissioner) committed ultra vires acts in violation of various statutes governing the procurement of these services. CR.3308-84 (Cook Children’s live petition), 3510-3817 (Superior), 4231-4715 (Wellpoint), 4716-5835 (Texas Children’s).

Course of Proceedings: The court consolidated the lawsuits, CR.2778, and the Commissioner filed a plea to the jurisdiction seeking dismissal of the suits, CR.2949-93. The court conducted a four-day evidentiary hearing to determine whether it should temporarily enjoin the Commissioner from completing the procurement and whether it should dismiss the case pursuant to the Commissioner’s plea to the jurisdiction. CR.5875.

Trial Court: 353rd Judicial District Court, Travis County

The Honorable Laurie Eiserloh

Trial Court Disposition: The trial court denied the plea to the jurisdiction and entered a temporary injunction against the Commissioner from completing the procurements. CR.5875-5884. xiv

Statement Regarding Oral Argument This lawsuit should swiftly end now because the losing bidders lack a cognizable legal interest in halting the procurement any longer—as the Commissioner explained in her response to Plaintiffs’ motion for temporary relief. The Commissioner requests that this case be set for oral argument on an expedited schedule, which will be helpful to the Court given the numerosity of parties and issues in this appeal.

Issues Presented The Commissioner is statutorily charged with administering and coordinating the provision of federal Medicaid health benefits and similar state programs to qualifying Texans. Tex. Gov’t Code § 532.0051; Tex. Health & Safety Code §§ 62.051(a), .053(3). As part of the Commissioner’s duties to oversee these programs, the Legislature has given her authority to procure contracts with companies to provide necessary services, thereby implementing a “Medicaid managed care sys- tem.” Tex. Gov’t Code § 532.0051. Under this system, third-party health insurance companies facilitate beneficiaries’ care by administering the health plans and reim- bursing providers participating in the programs. Tex. Gov’t Code § 532.0051. When existing managed care organizations (MCOs) were not selected during the Commissioner’s most recent reprocurement of these services, they sued the Commissioner to enjoin her from signing contracts with the winning bidders and thereby completing the procurements.

The issues presented are:

1. Whether the trial court lacked subject-matter jurisdiction over Plaintiffs’ claims because: xv a. they are unripe; and b. Plaintiffs failed to establish viable ultra vires claims.

2. Whether the trial court erred by temporarily enjoining the Commissioner from completing the procurement process because:

a. Plaintiffs are unlikely to succeed on the merits of their claims that the Commissioner violated any procurement statute; b. the balance of equities weighs decisively in the Commissioner’s (and therefore, the State’s) favor;

c. the trial court’s order enjoining the procurement is void because it does not comply with Rule 683; and d. the trial court erred by excluding relevant evidence demonstrating the methodology HHSC evaluators used in scoring participating bidders. xvi

Introduction This lawsuit is designed to entrench the interests of third-party MCOs that lost a competitive procurement to administer the State’s Medicaid and Children’s Health Insurance programs. The Legislature empowered HHSC to determine which bidders provide the “best value” for the State and can best serve the interests of low-income Texans who depend on these programs.

The disappointed bidders’ demand to enjoin the Commissioner from

“sign[ing], implement[ing], or execut[ing] any contract with any other entity for the STAR/CHIP products,” CR.4763, is a quintessential suit to “control state action,” which Texas courts have routinely dismissed under the ultra vires doctrine. Tex. Logos, L.P. v. TxDOT, 241 S.W.3d 105, 118 (Tex. App.—Austin 2007, no pet.) (collecting cases). It should go without saying that allowing jilted contractors to highjack the State’s procurement process, entrench their own financial interests for the foreseeable future to the tune of billions of dollars, and bar the State from procuring necessary services for the most vulnerable Texans does not serve the public interest.

The trial court erred by denying the Commissioner’s plea to the jurisdiction and enjoining her from completing the legislatively mandated procurement of MCO services, which elevated the losing bidders’ expired contracts over the State’s sovereign immunity and disrupted the orderly statewide administration of Medicaid and CHIP services. This Court should reverse and remand with instructions to dismiss the Plaintiffs’ suits.

Statement of Facts

I. Legal Background

HHSC oversees the administration of Texas Medicaid, which is a federal-state cooperative program that ensures the most impoverished Americans receive ade- quate healthcare. Tex. Gov’t Code § 532.0051; Sw. Pharmacy Sols., Inc. v. Tex. HHSC, No. 03-11-00802-CV, 2013 WL 3336868, at *2-3 (Tex. App.—Austin June 27, 2013, no pet.). HHSC also oversees and implements Texas’s Children’s Health Insurance Program (CHIP), which is designed to ensure Texas children receive adequate health coverage that Medicaid and other programs may not provide. ^[12].RR.511. Since the mid-1990s, HHSC has primarily carried out these programs by procuring services from MCOs to administer the provision of benefits to Medicaid and CHIP beneficiaries and to reimburse medical providers participating in those programs. ^[6].RR.154. STAR (State of Texas Access Reform) is what HHSC calls its partnership program with MCOs for the provision of Medicaid services. ^[12].RR.511.

The Commissioner, as head of HHSC, is statutorily charged with the exclusive authority to “plan and direct Medicaid, including the management of the Medicaid managed care system and the development, procurement, management, and monitoring of contracts necessary to implement that system.” Tex. Gov’t Code § 532.0051. The Commissioner is similarly empowered by statute to manage CHIP and “coordinate the child health plan program with the Medicaid program.” Tex. Health & Safety Code §§ 62.051(a), .053(3). Relevant here, the procurement process for STAR/CHIP is governed by various standards articulated in chapters 533, 536,1 and 2155 of the Government Code; chapter 62 of the Health & Safety Code; and title 1, chapter 391 of the Administrative Code.

The primary consideration when procuring MCO contracts is to “provide[] the best value to the agency” “by any procurement method approved by” HHSC. Tex. Gov’t Code § 2155.144(c); 9.RR.313. And this objective controls over any potentially conflicting provisions. Id. § 2155.144(n). To evaluate MCO performance, HHSC “develop[s] quality of care and cost-efficiency benchmarks, including benchmarks based on a [MCO]’s performance with respect to reducing potentially preventable events and containing the growth rate of health care costs.” Tex. Gov’t Code § 536.052(b).

HHSC commences a procurement of MCO services by public notice of a Request for Proposals (RFP), which explains the services HHSC needs and invites qualifying organizations to respond. ^[1] Tex. Admin. Code § 391.209. When bidders respond to the RFP, they are on notice that their proposal is subject to public disclosure under the Public Information Act (PIA). 9.RR.343-45. A prospective bidder may submit a pre-bid protest if any of the RFP’s requirements are inconsistent with state law. ^[1] Tex. Admin. Code § 391.303(b). Likewise, disappointed bidders may protest the contract award. Id. § 391.301 (citing Tex. Gov’t Code § 2155.076).

Beginning in 2018, the procurement process underwent years of reform and cross-agency collaboration with the Comptroller of Public Accounts, the State Au- ditor’s Office, HHSC’s Inspector General, and internal auditors. ^[9].RR.501. Because of the reforms, HHSC gave potential bidders the opportunity to meet with staff and give feedback on administering the solicitation. ^[9].RR.501. Mercer Health Benefits, LLC, a procurement consulting firm, also advised HHSC in developing and facilitating these reforms and the evaluation criteria for the procurement. ^[6].RR.136; 12.RR.284.

II. Factual Background

After years of reform, input from throughout the State government, and feedback from managed-care stakeholders, HHSC initiated a procurement process and invited MCOs to bid for contracts to provide administration and beneficiary services through the STAR and CHIP programs. ^[9].RR.293-349. HHSC published the STAR & CHIP Managed Care Services RFP HHS0011152 on December 7, 2022. 9.RR.293. The RFP stated that HHSC would award contracts to qualified MCOs in one or more of thirteen defined service areas (SAs) based on population density. ^[9].RR.321-

22. Under the terms of this procurement, bidders agreed that “HHSC shall make an award to the Respondent that, in HHSC’s sole determination, provides the best value to the State of Texas as set out in this Solicitation.” 9.RR.313 (emphasis added).

The RFP notified potential respondents that their proposals would “be evaluated in accordance with State law, including, but not limited to, applicable provisions of Chapters 533, 536, and 2155 of the Texas Government Code.” 9.RR.313. HHSC formatted the procurement mindful of its overarching obligation to provide best value to the State by developing “best value criteria,” technical questions, and oral presentation scenarios to solicit the relevant information it needed under sections

533.002, 533.003(a)(1), 536.052, and 2155.144. Relevant here, the best value criteria and technical questions addressed historical quality performance of the RFP respondents. ^[6].RR.135. HHSC outlined these standards in both the RFP and HHSC’s Statement of Work for the procurement. ^[5].RR.125; 9.RR.317, 520-24; 12.RR.284, 291-92.

Before the deadline for submissions, HHSC invited MCOs to attend a pre-pro- posal conference and submit questions about the RFP or assert possible errors or omissions in the RFP. ^[9].RR.303-04. If a respondent didn’t raise a pre-solicitation objection to any error or defect in the RFP, the bidder was deemed to have waived the error or defect under the RFP’s express terms. ^[9].RR.303. Only Wellpoint pro- tested these specifications before any bids were entered. Wellpoint.Mot.^[5]. Wellpoint generally complained that “it appears that HHSC intends to award mandatory con- tracts pursuant to the RFP for both the STAR program . . . and the CHIP program . . . in violation of the law and in an anti-competitive manner.” 9.RR.360. The Commissioner denied Wellpoint’s protest as to the solicitation. ^[9].RR.360.

For over a year, HHSC evaluated the MCOs’ responses before issuing the Notice of Intent to Award (NOIA) contracts to winning bidders. ^[12].RR.283-96. As part of their response, MCOs could rank specific SAs according to preference, subject to the maximum number of MCOs that could receive a contract in each SA. ^[9].RR.315. HHSC’s process included evaluating and scoring written responses to technical questions and inviting MCOs to make oral presentations. ^[12].RR.286-87. Eighteen bidders responded to the STAR/CHIP RFP, and evaluators reviewed the written responses to the technical questions before the oral presentations. ^[12].RR.286.

HHSC deemed all MCOs to be in the “Competitive Range” for selection and oral presentations, meaning there was a likelihood that they would be considered for the SAs they ranked. ^[12].RR.287-88. HHSC then evaluated the oral presentations based on the MCO’s responses to four separate scenarios which covered the following top- ics: Oversight and coordination with subcontractors; Maternal mortality and mor- bidity; Coordination with Dental Maintenance Organizations; and Preventive care rates. ^[9].RR.318-19. HHSC certified each of the applicants as reasonably capable of fulfilling their proposals under Government Code section 533.0035 based on this comprehensive process. ^[12].RR.294.

The evaluation teams, which consisted of subject matter experts, reviewed all responses and assigned scores consistent with the published scoring guide. ^[12].RR.286. The evaluators trained extensively on scoring proposals and conducted practice exercises to rehearse the scoring methodology. CR.3365 (Cook Children’s live petition); 9.RR.427-71. Evaluators reviewed the proposals against relevant criteria and then held Consensus Scoring Meetings to discuss the responses, justify their decisions, and unanimously assign scores. ^[9].RR.299, 314. After evaluating all responses and determining final weighted scores, HHSC assigned MCOs to SAs by order of ranked preference. ^[9].RR.322-23; e.g., CR.3162, 3166, 3172, 3177, 3178 (technical weighted scores based on best-value criteria and technical-question responses), 3288 (final weighted scores after oral presentations).

After evaluating the bidders’ offers, HHSC issued a NOIA identifying the MCOs to which it intended to award contracts in each SA. During the procurement,

HHSC considered the past performance of all MCOs who recounted their past performance in their bid. ^[6].RR.177.

III. Procedural History

Once they were notified that they were not selected to provide MCO services in their preferred SAs, Plaintiffs filed bid protests against HHSC’s procurement under

1 Tex. Admin. Code § 391.301; see 9.RR.520 (Cook Children’s), 525 (Superior), 532 (Texas Children’s), 540 (Wellpoint). Kay Molina, the Deputy Executive Commissioner for Procurement and Contract Services carefully considered the issues raised by the losing bidders and found no violation of statutory requirements. ^[9].RR.524. Plaintiffs then appealed to the Executive Commissioner, the only defendant in this suit. ^[1] Tex. Admin. Code § 391.307(d); e.g. ^[9].RR.546. As the Commissioner testified, those appeals remain pending before HHSC:

“Q And as part of that, you still need to determine for yourself – “A Yes, sir.

“Q -- whether the State complied with the law?

“A Yes, sir.”

6.RR.133. The Commissioner testified that the contracts with Plaintiffs reached the end of their terms, and due to this litigation, she has been required to extend the current MCO contracts for the foreseeable future. ^[6].RR.145.

Before the bid protests could be resolved through the HHSC’s administrative process, each Plaintiff separately sued, alleging that the Commissioner acted ultra vires in the procurement process. CR.3308-84 (Cook Children’s live petition), 3510- 3817 (Superior), 4231-4715 (Wellpoint), 4716-5835 (Texas Children’s). The trial court consolidated the lawsuits, CR.2778, and conducted a four-day evidentiary hearing to determine whether it should temporarily enjoin the Commissioner from signing contracts or grant her plea to the jurisdiction. CR.5875. The court ordered the Commissioner, and all other persons or entities in active concert or participation with [her,] [to] refrain from awarding, signing, entering into, executing, implementing, or otherwise taking action to effectuate or perform any contracts resulting from or in connection with the STAR & CHIP RFP or to further the procurement or contracting processes for the STAR & CHIP RFP.

CR.5883. The Court ordered the same relief as to the STAR Kids RFP. CR.5883. Presently, the entire statewide procurement process for STAR+, CHIP, and STAR Kids is on hold pending the outcome of this litigation.

Summary of the Argument The trial court erred in several ways. The trial court erred by denying the Commissioner’s plea to the jurisdiction and by granting the temporary injunction because it lacked subject-matter jurisdiction and Plaintiffs failed to establish a probable right to relief: Their claims are not justiciable, and it is highly unlikely that those claims will succeed on the merits.

I. Plaintiffs’ claims are not ripe because they have not exhausted the existing and available administrative process. Instead, Plaintiffs seek to bypass the agency bid-protest process—which, as all agree, is still awaiting the Commissioner’s con- sideration. In fact, if the trial court took the correct course and denied the request for a temporary injunction, Plaintiffs could have still recovered the very same relief they seek from this Court in the administrative proceeding. That should give this Court pause: A court should not issue a judgment that has no binding force (i.e., an advisory opinion), yet that is exactly what Plaintiffs ask this Court to do.

II. Regarding success on the merits, (A) Plaintiffs have no viable ultra vires claims. Without a cognizable right to dictate the Commissioner’s procurement decisions, Plaintiffs pursue an improperly prosecuted ultra vires action. But even if Plaintiffs can pursue ultra vires relief, those claims fail because HHSC complied with every applicable statutory requirement.

(B) Equity also favors the Commissioner. Plaintiffs were not irreparably harmed just because their companies lost a competitive, fair bidding process and missed an opportunity to contract with the State. Plaintiffs’ quest for a mulligan ignores the well-settled principle that, when it comes to procurements, those with the delegated authority to secure goods and services on behalf of the State may “determine those with whom it will deal.” Tex. Highway Comm’n v. El Paso Bldg. & Constr. Trades Council, 234 S.W.2d 857, 860 (Tex. 1950). The Commissioner squarely possesses that authority here.

(C) Further, the trial court’s order violates Rule 683. Not only did the court incorrectly find violations where none exist, but it also omitted descriptions with the requisite specificity, invented out of whole cloth statutory prohibitions not found in the governing texts, and concluded the Commissioner violated them. Should the Court find the trial court had subject-matter jurisdiction, it should reverse the temporary injunction order because it is void.

(D) The trial court also erroneously excluded relevant evidence demonstrating how HHSC’s evaluators determined statutory “best value” to the agency. This ev- idence is probative of whether the Commissioner acted within her statutory authority to award the contracts to the winning bidders and shows why Plaintiffs’ ultra vires claims are invalid.

For these reasons, the trial court should have granted the Commissioner’s plea to the jurisdiction and dismissed the suit in its entirety, or—at a minimum—refused to enjoin the procurement because Plaintiffs lack entitlement to extraordinary relief.

Standard of Review A trial court’s order ruling on a plea to the jurisdiction is reviewed de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004). An order granting a temporary injunction is reviewed for an abuse of discretion. State v. Loe, 692 S.W.3d 215, 226 (Tex. 2024). A trial court’s failure “to analyze or apply the law correctly will constitute an abuse of discretion,” because the court “has no discretion to determine what the law is.” State ex rel. Off. of Att’y Gen. v. City of San Marcos, 714 S.W.3d 224, 234 (Tex. App.—15th Dist. 2025, pet. denied)

(citation modified).

A trial court’s ruling on the admissibility of the evidence is reviewed for abuse of discretion. In re J.F.C., 96 S.W.3d 256, 285 (Tex. 2002).

Argument At the outset, the Court should reverse and render judgment dismissing the suits because the trial court lacked subject-matter jurisdiction for reasons of ripeness and lack of a viable ultra vires claim. There is no dispute that the agency generally enjoys sovereign immunity from suit, which has not been waived. Despite the trial court’s cursory conclusions, Plaintiffs cannot support their claims that the Commissioner acted illegally. Thus, Plaintiffs are unlikely to succeed on the merits of their ultra vires claims, or their claims that the procurement must be scrapped and begun again.

“Because it is dispositive of this appeal, [this Court should] consider first whether the plaintiffs have established a probable right to relief.” Abbott v. Anti-Def- amation League Austin, Sw., & Texoma Regions, 610 S.W.3d 911, 917 (Tex. 2020) (per curiam). To establish a right to relief at this preliminary stage, Plaintiffs must demonstrate that their claim is justiciable and will probably succeed on the merits. See id. (“At this preliminary stage, the plaintiffs must demonstrate both standing to bring their claims and that the claims will probably succeed on the merits in order to establish a probable right to relief.”).

Plaintiffs have not (indeed, cannot) make that showing: (I) their claims are not ripe because Plaintiffs did not exhaust the bid-protest process and (II) their claims are highly unlikely to succeed on the merits because they have not pleaded or otherwise established a proper ultra vires action—especially where the Commissioner, within her broad discretion, closely considered and followed each statutory mandate.

I. The Trial Court Lacked Subject-Matter Jurisdiction Because Plaintiffs’ Claims Are Unripe and Unexhausted.

The trial court lacked subject-matter jurisdiction over Plaintiffs’ unripe and unexhausted claims. Ripeness “is a threshold issue that implicates subject matter juris- diction,” Patterson v. Planned Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998), which as the party invoking the jurisdiction of the courts, Plaintiffs must prove, see Waco ISD v. Gibson, 22 S.W.3d 849, 852 (Tex. 2000). “[L]ike stand- ing, [ripeness] emphasizes the need for a concrete injury for a justiciable claim to be presented.” Patterson, 971 S.W.2d at 442. But “[w]hile standing focuses on the issue of who may bring an action, ripeness focuses on when that action may be brought.” Gibson, 22 S.W.3d at 851.

Specifically, in evaluating ripeness, courts must consider “whether, at the time a lawsuit is filed, the facts are sufficiently developed so that an injury has occurred or is likely to occur, rather than being contingent or remote.” Point Energy Partners Permian, LLC v. MRC Permian Co., 669 S.W.3d 796, 812 (Tex. 2023) (citation modified). “If the plaintiff’s claimed injury is based on ‘hypothetical facts, or upon events that have not yet come to pass,’ then the case is not ripe, and the court lacks subject matter jurisdiction.” Sw. Elec. Power Co. v. Lynch, 595 S.W.3d 678, 683 (Tex. 2020) (quoting Gibson, 22 S.W.3d at 852). Courts that prematurely decide an unripe claim have violated constitutional limitations on rendering advisory opinions. Gibson, 22 S.W.3d at 852.

1. No party disputes that every Plaintiff has a pending bid protest, and that the Commissioner has yet to determine whether HHSC complied with all applicable procurement standards. The Commissioner’s testimony, which Plaintiffs’ counsel elicited, showed that no injury “has occurred or is likely to occur.” See Point Energy, 669 S.W.3d at 812:

“Q And as part of that, you still need to determine for yourself –

“A Yes, sir.

“Q -- whether the State complied with the law?

“A Yes, sir.”

6.RR.133. The Commissioner also said, “assuming the Court will allow me to move forward, I would then finish the appeals process, the review of the appeals, and make a decision, one or the other, on each of the individual appeals . . . . I would move forward . . . . Depending on how those appeals come out.” 6.RR.132 (emphases added).

But Plaintiffs seek to sidestep that administrative process. Indeed, they sought and received this improper injunction before the Commissioner could even consider their administrative appeal. At this moment, the Commissioner is enjoined from

“further[ing] the procurement or contracting process for the STAR & CHIP RFP.” CR.5883. Nor can she “proceed[] with the procurement of, issuing a notice of intent to award or awarding contracts under, or otherwise implementing results from the

STAR Kids RFP.” CR.5883. Plaintiffs have thus manufactured the catch-22 that de- stroys this Court’s jurisdiction: The injunction prevents the Commissioner from considering Plaintiffs’ administrative appeals, which in turn means this case is not ripe because the Commissioner’s decision could moot this entire case.

More to the point, whether the Commissioner will proceed with HHSC’s existing procurements or alter them in some way is far from certain. HHSC’s history with MCO procurement demonstrates as much. In 2020, for example, HHSC altered a procurement due to irregularities in the applied scoring procedures. ^[5].RR.180. And even now, there remains the chance that the Commissioner will agree with Plaintiffs and decide the pending administrative appeals in their favor. After all, the Court must presume that the Commissioner will consider these appeals in good faith. See Webster v. Comm’n for Law. Discipline, 704 S.W.3d 478, 501 (Tex. 2024) (holding that state actors are entitled to a “presumption of regularity, good faith, and legality” when answering allegations of wrongdoing). Of course, here the Commissioner need not rely on this presumption—her uncontroverted testimony is that the procurement’s execution depends on how she decides these appeals. ^[6].RR.132.

Tellingly, the trial court’s order is repeatedly phrased in the future tense, as the court found that HHSC’s “intended contract awards” “will constitute ultra vires acts,” because they “will fail” to comply with certain statutory and regulatory re- quirements. CR.5876-78. Likewise, every Plaintiff couches their request for relief in speculative, uncertain language that renders their claims nonjusticiable under ripeness principles. See Children’s Plans.Mot.^[18] (hoping to “foreclose even the possibility of [the] unacceptable result”) (emphasis added); Wellpoint.Mot.^[14] (adopting same argument); Superior.Mot.^[2] (“If the Executive Commissioner authorizes HHSC to execute contracts based on the intended contract awards, her action will be ultra vires.”) (emphasis added). These assertions lay bare the textbook ripeness problem plaguing Plaintiffs’ suits: By gesturing at what the Commissioner may do with their administrative appeals, all Plaintiffs assert is “the occurrence of contin- gent future events that may not occur as anticipated[,] or may not occur at all.” Patterson, 971 S.W.2d at 444. For ripeness, that is not enough.

2. Likewise, the Court should dismiss Plaintiffs’ claims because Plaintiffs have not exhausted their available administrative remedies, as the Commissioner argued below. CR.2986; see Hensley v. State Comm’n on Jud. Conduct, 692 S.W.3d 184, 194 (Tex. 2024) (holding that when an available administrative remedy “may moot the claim . . . the claim is barred”). That bedrock administrative-law requirement applies not only to protests of the NOIA, but to the solicitation Plaintiffs so adamantly insist the Commissioner unlawfully implemented. ^[1] Tex. Admin. Code § 391.305(a)(1).

When a plaintiff alleges that an agency has incorrectly applied the law governing the subject of its dispute, that claim is not ripe until the plaintiff avails himself of all available administrative recourse. E.g., Riner v. City of Hunters Creek, 403 S.W.3d 919, 923-24 (Tex. App.—Houston [14th Dist.] 2013, no pet.); cf. Marble Falls ISD v. Scott, 275 S.W.3d 558, 567 (Tex. App.—Austin 2008, pet. denied) (stating that APA challenges are not ripe while a motion for rehearing before the agency remains pending); Cockrell Inv. Partners, L.P. v. Middle Pecos Groundwater Conservation Dist., 676 S.W.3d 677 (Tex. App.—El Paso 2023, pet. granted) (reviewing whether administrative remedies were exhausted before judicial review was sought).

In Riner, for example, the court of appeals held that, because a plat owner had case-mooting administrative relief still pending, the plat owner’s claims against the City were premature. 403 S.W.3d at 923-24. At any point during the appeal, the plat owner could have recovered administrative relief. But rather than patiently await an administrative decision, the plat owner sought judicial relief too early. That same logic squarely applies here. As the Commissioner has testified, she has not yet determined whether the procurement “complied with the law.” 6.RR.133.

Like the court of appeals in Riner, no court has jurisdiction over Plaintiffs’ premature claims. Plaintiffs also acceded to the terms of the solicitation when they submitted bids without protest in the hope of being awarded new multi-billion-dollar contracts. Their failure to protest, and Wellpoint’s decision to proceed with competing for the contracts despite its protest, renders their present claims barred. See

Palladian Partners, Inc. v. United States, 783 F.3d 1243, 1255-56 (Fed. Cir. 2015) (bar- ring claim when bidder fails to appeal decision regarding the solicitation terms).

3. Plaintiffs’ invocation of Smith v. Abbott, 311 S.W.3d 62 (Tex. App.—Austin 2010, pet. denied), and the ultra vires doctrine as a panacea for these defects fails. In Smith, the plaintiff alleged that a state agency (there, the Attorney General) could not delegate its statutory authority to suspend drivers licenses to the State Office of Administrative Hearings because SOAH had no such statutory authority. Id. at 68- 69. Unlike the Commissioner’s authority to procure the MCO contracts, which is clearly statutorily vested, Smith dealt with SOAH’s general authority to finally adjudicate suspension disputes despite the statutes delegating that authority to the Attorney General. Id. at 81. Smith is thus inapposite.

II. The Trial Court Erred in Temporarily Enjoining the Commissioner.

An applicant for temporary injunction “must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable imminent, and irreparable injury in the interim.” Anti-Defamation League, 610 S.W.3d at 916 (citation modified). Plaintiffs did not (and cannot) satisfy the hefty burden they carry to establish these elements. See id. In holding otherwise and granting Plaintiffs extraordinary relief, the trial court abused its discretion.

A. Plaintiffs lack a probable right to relief on their ultra vires claims. Far from ultra vires, the Commissioner’s conduct was comfortably within her broad statutory authority. But even if this Court disagrees, Plaintiffs’ claims still fail because they seek an impermissibly retrospective remedy that runs afoul of sovereign immunity.

Commissioner “exercised discretion without reference to or in conflict with the constraints of the law authorizing [her] to act.” Id. at 242 (citation modified).

They cannot. After listing thirteen bullet points with no corresponding factual findings, the trial court concluded that the Commissioner violated no less than six- teen different statutory and regulatory provisions, in addition to the Texas Constitution’s due course provision. CR.5877-78. Each was error. At the outset, the trial court’s order entirely ignores that the touchstone requirement of the procurement process is that the contract “provide[] the best value to the agency.” Tex. Gov’t Code § 2155.144(c). And it disregards that the Legislature vested the discretion to make that determination in HHSC, who “may consider all relevant factors in determining the best value.” Id. § 2155.144(d). That is a statutory scheme vesting absolute discretion in the agency; it therefore cannot provide any basis for an ultra vires claim.

The trial court nevertheless identified a host of purported statutory violations that fall into three general categories: (i) preference standards, see Tex. Gov’t Code §§ 533.003(a)(1), .003(a)(3), .004(a)(2), 536.052(a), .052(d); see also Tex. Health & Safety Code § 62.155(c)(1); (ii) disclosure and confidentiality obligations, see 1 Tex.

Admin. Code §§ 391.101, .209, .307(d)(1); and (iii) other guidelines and procedures that HHSC follows when screening, evaluating, and certifying candidates for the procurement, see Tex. Gov’t Code §§ 533.002, 533.0035, 2155.144(c), (d); Tex. Health & Safety Code §§ 62.051(e), .055, .155. But a plain reading of the relevant text undermines the court’s legal conclusions, and none of the evidence adduced at the hearing supports a single factual finding made. Additionally, Plaintiffs convinced the court to identify prohibitions and mandates unmoored from these provisions and then enter conclusory findings that the Commissioner violated them.

a. The Commissioner has absolute discretion to determine which contracts provide the “best value” to the State. In granting extraordinary relief, the trial court ignored that the Legislature vested the Commissioner with absolute discretion to determine those MCO contracts that provide the “best value to the agency.” Tex. Gov’t Code § 2155.144(c),

(d). That alone is fatal to Plaintiffs’ ultra vires claims.

Section 2155.144 vests the Commissioner with broad authority over a discretion- laden procurement process. Section 2155.144(c) makes the ultimate goal of HHSC’s procurement process obtaining a contract “that provides the best value to the agency.” Tex. Gov’t Code § 2155.144(c). And, in turn, section 2155.144(d) supplied a list of factors that HHSC “may consider” to the extent they are relevant to deter- mining “best value to the agency,” and which must be documented if considered. Id. § 2155.144(c)-(d) (emphasis added). On its own terms, section 2155.144(d) does not require consideration of every enumerated factor—instead, it allows the Com- missioner to decide when those factors are “relevant” to determining “best value”—a judgment-laden inquiry wholly within the Commissioner’s discretion.

And when making this “best value” judgment, the Commissioner may consider, among other things, “the quality and reliability of . . . [and] total long-term cost to the agency of acquiring the vendor’s goods or services,” as well as “any other factor relevant to determining the best value for the agency in the context of a particular acquisition.” Id. § 2155.144(d)(3), (7), (11). This is a statutory scheme that vests “absolute discretion” in the Commissioner to weigh and apply the factors. Hall, 508

S.W.3d at 241. The Commissioner’s “best value” judgment is just that: a judgment within the Commissioner’s sole discretion. It does not provide any basis for an ultra vires claim. See id. After all, sovereign immunity “bars [ultra vires] suits complaining of an exercise of absolute discretion.” Hous. Belt, 487 S.W.3d at 163. And while an ultra vires suit will lie to challenge a government official’s “exercise of judgment or limited discretion” when exercised “without reference to or in conflict with the con- straints of the law authorizing the official to act,” id., Plaintiffs cannot show that the Commissioner’s best-value determination violated any law authorizing her to act.

Indeed, the only provision of section 2155.144 that the trial court found that the Commissioner would purportedly violate is section 2155.144(d)(5)—“past vendor performance,” which is one of several factors the Commissioner “may consider” (among others) when determining best value. CR.5877. Although the injunction’s conclusory finding provides no explanation, Plaintiffs argued that because HHSC acknowledged past performance as a relevant factor under section 2155.144, the agency was required to document its consideration, which HHSC allegedly didn’t do. Children’s Plans.Mot.35-36.

That argument is wrong on the law and the facts. For starters, Plaintiffs’ argument overlooks the statutory text: To the extent HHSC might heed past performance, it “may consider . . . indicators of probable vendor performance under the contract such as past vendor performance, the vendor’s financial resources and ability to perform, the vendor’s experience and responsibility, and the vendor’s ability to provide reliable maintenance agreements.” Tex. Gov’t Code § 2155.144(d)(5) (emphasis added). There is no mandate to look to “past performance” in isolation, and the text and context of section 2155.144 instead evince the Commissioner’s absolute statutory discretion to disregard past performance altogether in favor of indicators of future performance (though, as explained below, HHSC did not). See TGS- NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 441 (Tex. 2011).

Regardless, James Ramirez, Deputy Executive Commissioner responsible for Medicaid & CHIP Services (MCS) procurements, testified that past performance was documented in the procurement file:

“Q. But there is no specific documentation showing the agency’s consideration of relevant factors including past performance; correct?

“A. Outside of the entirety of the procurement file, that is correct.”

5.RR.227. And Kay Molina testified that “if past performance was [in the response], it was considered.” 5.RR.110. Even after assuming that past performance was a mandatory statutory requirement, HHSC considered it to the extent it deemed appropriate and to the extent the MCOs brought their past performance to evaluators’ attention. Positive past performance may result in more favorable treatment, or it could not. But that hazy state of play cannot form the basis for an ultra vires claim, because how HHSC weighs past performance is entirely within the Commissioner’s absolute discretion. Hall, 508 S.W.3d at 241.

Not only did HHSC consider past performance, but, by Plaintiffs’ own admis- sion, it also documented how it declined Mercer’s recommendation to weigh past performance. ^[5].RR.181, 253; 9.RR.260; Children’s Plans.Mot.35 (“HHSC inexpli- cably rejected its hired consultant’s recommendation to assign 10% of a bidder’s score to past performance.”). Plaintiffs cannot succeed on an ultra vires claim to compel the Commissioner to weigh certain best-value criteria more favorably than others because these are questions requiring judgment and deliberation entirely within her statutory authority, see Util. Assocs., 517 S.W.3d at 310, and she is immune from suits like this that seek to control state action. See, e.g., Tex. Logos, 241 S.W.3d at 121-22 (“[A] declaratory claim that would be proper if asserted to compel the state to act within its statutory powers prospectively may nonetheless be barred by sovereign immunity to the extent it alleges past statutory violations that implicate a right to money damages.”). This Court should reject Plaintiffs’ proposed sore-loser doctrine of state procurement law.

* * * The trial court’s injunction appears premised on Plaintiffs’ unproven assertion that the Commissioner “did not implement [the statutes] at all.” E.g., Children’s Plans.Mot.33. But that contradicts the express terms of the RFP and the procedures HHSC and its evaluators followed, which every bidder accepted when they submit- ted proposals. ^[5].RR.125; 9.RR.313, 317, 520-24; 12.RR.284, 291-92. Here, the evidence conclusively shows HHSC’s compliance with all applicable statutes. b. The manner of giving statutory preferences is not specified in the statutes and is within HHSC’s discretion.

The trial court also held that Plaintiffs have a probable right to relief because, if HHSC does not award the contracts to Plaintiffs, the agency will likely deprive them of certain statutory preferences that they are entitled to in the procurement process. CR.5877-78 (citing Tex. Gov’t Code §§ 533.003, 533.004(a)(2), 536.052(a),(d)); see also Superior.Mot.^[13] (same). But that conclusion fails because Plaintiffs did not (and cannot) prove standing. And even if they could, their claims still fail considering the broad discretion that the statutes give HHSC. Plaintiffs offer no meritorious counterarguments.

1. For starters, Plaintiffs lack standing to complain about the application of the statutory-preference provisions, which are waived and inapplicable. The trial court never found that any of the Plaintiffs were deprived a statutory preference over a winning MCO—especially not one to which they were otherwise entitled. In that sense, they have no standing to complain because they cannot show that the Commissioner’s alleged failure to apply a statutory preference caused them to be passed over in the procurement. See Elcon Enters., Inc. v. Wash. Metro. Area Transit Auth., 977 F.2d 1472, 1478 (D.C. Cir. 1992) (“Nor may courts set aside a procurement de- cision on the ground that the procuring agency potentially or actually violated applicable law in some trivial way—the violation must have been clear and prejudicial.”). In other words, the losing bidders show no harm caused by HHSC’s alleged failure to properly apply any statutory preference provision outlined above—the classic traceability inquiry.

These circumstances are readily distinguishable from Wilson v. Community Health Choice Texas, Inc., where the MCO bidding on the procurement was the only entity qualifying for a mandatory contract award under section 533.004(a). 607 S.W.3d 843, 847-48 (Tex. App.—Austin 2020, pet. denied). Here, no MCO has argued that it was the only entity qualifying for any of the statutory preferences that Plaintiffs allege the Commissioner has failed to apply, as was the case in Wilson. Id. The trial court’s holdings based on sections 533.003(a)(1) and 536.052(d), CR.5877, are not based on any finding of an incorrectly applied or deprived-of preference, and it had no grounds to enjoin the Commissioner under these provisions. Accordingly, Plaintiffs have no likelihood of success on their ultra vires claims that the Commissioner failed to properly implement a preference for one MCO over another.

2. Even if Plaintiffs could prove traceability, the various preferences cannot override the statutory objective to use a procurement method “that provides the best value to the agency”—an entirely discretionary endeavor within the Commissioner’s sole prerogative. Tex. Gov’t Code § 2155.144(c). Indeed, section 2155.144(n) explicitly provides that “[t]o the extent of any conflict, this section prevails over any other state law relating to the procurement of goods and services,” with limited exceptions not applicable here. Thus, even if another provision limited discretion by specifying the manner of applying preferences—which none of them do—the agency must still follow a procurement method that provides the best value.

Only if two bidders offer the same value would these preferences even need to come into play. See 1 Tex. Admin. Code § 391.201(d) (“In case of tie bids or proposals which cannot be resolved by application of one or more purchase preferences, an award shall be made by drawing of lots, tossing a coin, or drawing of names with two witnesses present.” (emphases added)). Otherwise, the preferences would conflict with best value, in which case the best value standard controls. See Tex. Gov’t Code § 2155.144(n).

As Ramirez testified and as the RFP plainly states, HHSC wanted respondents to provide information to “achieve the outcomes mandated in . . . Sections 533.002, 533.003(a)(1), 536.052, and 2155.144”—several of the very same statutory provisions challenged here. ^[6].RR.99-100; 9.RR.317. If the MCOs objected to how HHSC awarded preferences, they were obligated to raise objections during HHSC’s reforms, in the pre-solicitation meetings, or with a pre-bid protest. See 1 Tex. Admin.

Code § 391.305(a)(1) (requiring a protest to be filed “no later than the date that responses to a solicitation are due, if the protest concerns the solicitation”). Plaintiffs’ failure to do so precludes them from challenging the procurement now.

Finally, the preference statutes are premised on receiving information from bidders so that HHSC can ascertain whether or how preferences apply. Plaintiffs point to no statute specifying that the agency is required to specifically ask for all infor- mation germane to preferences. It makes sense to put the onus on bidders, who have every incentive to make their best case for why the State should contract with them and who possess the most recent data concerning their business operations. And even if the RFP should have requested preference-related information, a protest concerning the solicitation must be filed “no later than the date that responses to a solicitation are due.” See 1 Tex. Admin. Code § 391.305(a)(1). Plaintiffs’ participation in the solicitation without protesting on those grounds not only fails to exhaust administrative remedies, but confirms that Plaintiffs are seeking retrospective relief, which cannot be awarded. See infra Part II.A.^[2].

3. Plaintiffs’ counterarguments lack merit.

First, Superior argues HHSC did not “‘give preference to organizations that have significant participation in the organization’s provider network from each health care provider in the region who has traditionally provided care to Medicaid and charity care patients’ as required by Texas Government Code section 533.003.” Superior.Mot.^[13]; see Children’s Plans.Mot.38. But section 533.003 provides neither a specific manner of awarding preference nor a specific degree of preference, leaving that to the agency’s absolute discretion. See Hous. Belt, 487 S.W.3d at 163. Absolute discretion is particularly evident when considering other preferences and standards, including the prime directive to achieve best value as required by section 2155.144(c). Absolute discretion is also evident in allowing HHSC to ascertain “significant participation” in the provider network from “each health care provider in the region who has traditionally provided care to Medicaid and charity care patients.” Tex. Gov’t Code § 533.003(a)(1) (emphases added).

For instance, if the Commissioner determined that an organization has “significant participation in the organization’s provider network from each health care provider in the region who has traditionally provided care to Medicaid and charity care patients,” id., HHSC could prefer an organization by awarding the contract to that organization rather than another organization that is otherwise tied with respect to best-value criteria. When such a scenario does not come up in a specific procurement, however, the preference may not matter—but that doesn’t mean the agency violated statute. It simply reflects HHSC’s discretion in the manner and degree of giving preference. Certainly, no ultra vires action may lie for an MCO preferring HHSC weigh this preference over all other statutory considerations. See Klumb v. Hous. Mun. Emps. Pension Sys., 458 S.W.3d 1, 10-11 (Tex. 2015) (holding that gov- ernmental bodies do not act without authority when “the breadth of [their] authority” under governing statutes “is inescapable”).

Here, the Commissioner ensured significant provider participation under section 533.003 through the best-value criteria and through the technical questions. Specifically, BVC 1.c favored bidders who “[d]emonstrate[] engagement of Providers . . . in the Service Coordination Process,” and BVC 2.b did the same for bidders who “promote access to Providers and Services, including addressing Provider shortages and barriers to care in specific areas of the State.” 9.RR.317. BVC 3 re- warded those who “[e]ncourage[] Providers to participate in the Medicaid program.” 9.RR.317. Technical questions 6 and 9 specifically ask the bidder to explain its “Provider Network adequacy including developing Services and Providers where they are needed,” and to “[d]escribe the Respondent’s approach to developing, con- tracting, and managing a robust qualified and culturally competent Provider Network.” 9.RR.327, 329. Any suggestion that HHSC did not consider provider participation or solicit information allowing MCOs to explain their entitlement to prefer- ence under section 533.003(a)(1) is untrue.

Second, Superior argues HHSC did not “give preference to organizations that have successfully implemented quality initiatives or meet quality of care and cost-efficiency benchmarks as required by Texas Government Code section 536.052(d).” Superior.Mot.14-15; see Children’s Plans.Mot.36-37. Like the preference in section 533.003, section 536.052 provides HHSC with absolute discretion.

Section 536.052(a) relates to quality initiatives and provides that HHSC “may allow” an MCO “increased flexibility to implement quality initiatives” in a man- aged-care plan. Tex. Gov’t Code § 536.052(a). Section 536.052(b) relates to benchmarks and provides that HHSC “shall develop quality of care and cost-efficiency benchmarks.” Id. § 536.052(b). Section 536.052(d) relates to preferences in awarding contracts and provides that HHSC “shall, in addition to considerations under Section 533.003 of this code and Section 62.155, Health and Safety Code, give preference” under one of two situations. First, HHSC can prefer an organization that

“offers a managed care plan that successfully implements quality initiatives under Subsection (a) as determined by the commission based on data or other evidence provided by the organization.” Tex. Gov’t Code § 536.052(d). Second, HHSC can give a preference to an organization that “meets quality of care and cost-efficiency benchmarks under Subsection (b).” Id. There is no dispute that benchmarks were not developed in time to be used in this procurement. ^[6].RR.44.

In the absence of benchmarks, HHSC determined preference based on quality initiatives under section 536.052(a). 5.RR.224. As subsection (d) expressly provides, however, successful implementation of quality initiatives is “determined by the com- mission based on data or other evidence provided by the organization,” which requires that the organization provide data or other evidence and then allows HHSC discretion to determine that a quality initiative was successfully implemented. Tex. Gov’t Code § 536.052(d). A bidder that does not include such data or other evidence in its response has no room to complain that no preference was given, certainly when it chose not to protest the RFP.

Here, HHSC incorporated preferences for quality initiatives in the BVC and Technical Questions just like it did with section 533.003(a)(1). For instance, Tech- nical Question 13 asked bidders to “[d]escribe the Respondent’s Quality Improvement and performance evaluation strategies and initiatives specific to the STAR, CHIP, and HTW populations.” 9.RR.330. Kay Molina’s resolution of Cook Children’s Bid Protest further demonstrates this, as HHSC relied on “data or other evidence provided by the organization,” i.e., the bid, in lieu of benchmarks in determining preference. ^[9].RR.521.

Third, the Children’s Plans argue that HHSC did not consider different plans for different populations, as required by section 533.003(a)(3), because “HHSC ex- ecutives conceded that the procurement was conducted in a statewide manner.” Children’s Plans.Mot.39. But whether the procurement is conducted in a statewide or by-region manner has no bearing on whether the Commissioner “consider[ed] the need to use different [MCOs] to meet the needs of different populations.” Tex.

Gov’t Code § 533.003(a)(3). Plaintiffs’ assertion on this point is a non-sequitur. In any event, HHSC has obviously considered a diverse range of companies in this procurement, considered their preference as to which SA they prefer, and has noticed an intent to award contracts to different organizations in different SAs. ^[9].RR.322-23; e.g., CR.3162, 3166, 3172, 3177, 3178 (technical weighted scores based on best-value criteria and technical-question responses), 3288 (final weighted scores after oral presentations).

Fourth, Superior argues the intended contracts “will violate Texas Government Code section 533.004, as amended in 2021, because the Executive Commissioner proposes to award mandatory contracts without statutorily required considerations, including considerations regarding provider networks in the region under Texas

Government Code section 533.003(a)(1), as required by Texas Government Code section 533.004(a).” Superior.Mot.^[17]. Plaintiffs’ argument here fails for the same reasons discussed above, explaining how the procurement is consistent with section 533.003(a)(1). Plaintiffs assert only that the agency did not consider section 533.003(a)(1), and it is unclear whether Plaintiffs would interpret these statutes together such that a preference under section 533.003(a)(1) must always override the mandatory nature of contracts under section 533.004.

Because HHSC considered the preference of section 533.003(a)(1), consistent with its discretion in giving such a preference, Plaintiffs cannot show that the Commissioner exceeded her legal authority in awarding mandatory contracts under section 533.004. In other words, there is no question the Commissioner has the authority to choose a winner—Plaintiffs’ quibbling with the weight HHSC gave various factors provides no basis for overcoming the Commissioner’s entitlement to sovereign immunity and dismissal of these suits. See Young v. Tex. Parks & Wildlife Dep’t, No. 15- 24-00052-CV, 2025 WL 1200947, at *7 (Tex. App.—15th Dist. Apr. 24, 2025, no pet. h.) (“[U]ltra vires claims ‘depend on the scope of the state official’s authority,’ which we evaluate against the relevant statutory or other legal authorities, not a plaintiff’s ipse dixit.”) (quoting Honors Acad., Inc. v. TEA, 555 S.W.3d 54, 68 (Tex. 2018)).

* * * Plaintiffs’ recitation of facts regarding HHSC’s application of statutory preferences is notable for what it omits. For instance, the Children’s Plans cite Ramirez’s testimony for the proposition that HHSC did not apply required statutory preferences. Children’s Plans.Mot.^[9]. But a closer review of the transcript shows that Plaintiffs’ counsel did little more than read the statutes and solicit Ramirez’s agreement that they generally apply. See 5.RR.97, 221-28, 230-33, 254-56. In the first place, Ramirez’s legal conclusions are not evidence. In any event, the transcripts do not say that the procurement failed to award a specific MCO with statutory preference that the MCO showed itself entitled to. That is not evidence that HHSC failed to consider required preferences; it is at most evidence that the losing bidders failed to advocate for their supposed right to preferential treatment when they responded. The Commissioner does not act ultra vires by awarding contracts to MCOs who do, and losing bidders have no right to the extraordinary remedy of injunctive relief mandat- ing a “redo.” See CR.3279 (Plaintiffs’ witness Jeri Somers opining that, “[t]he only remedy that can cure the impact of the premature disclosure is to cancel the Notice of Intent to award and to redo the entire process.”).

Under Plaintiffs’ theory, which is supported by no legal authority, the ultra vires doctrine requires HHSC to hold every RFP respondents’ hand through the procurement process, advising them of every statutory preference to which they may be entitled. See Children’s Plans.Mot.34. None of the governing statutes requires this ab- surd result, and imposing a requirement beyond what the statutes require is outside the province of the judiciary. Tex. Highway Comm’n, 234 S.W.2d at 860 (“Like private individuals and businesses, the Government enjoys the unrestricted power to produce its own supplies, to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.”) (quoting Perkins v. Lukens Steel Co., 310 U.S. 113, 127 (1940)); see also In re Tex. DFPS, 696 S.W.3d 240, 243–44 (Tex. App.—San Antonio 2024, orig. proceeding) (“We have held that when the trial court orders the Department to enter into specific contracts to provide specific services to the children in the Department’s care, it violates the Separation of Powers Clause of the Texas Constitution.”).

HHSC and the beneficiaries of these services expect MCOs to be experts in both federal and state Medicaid laws, and the agency must award these contracts on a competitive basis. E.g., Tex. Health & Safety Code § 62.055. If an MCO cannot figure out how to effectively advocate for itself under those provisions while bidding, perhaps it should not be serving the people of Texas. And under no credible legal theory can the Commissioner be said to have acted ultra vires by making that conclusion.

c. Required disclosure of materials under PIA is not ultra vires. The trial court also concluded that HHSC acted ultra vires because it disclosed Plaintiffs’ redacted proposals in response to a PIA request, purportedly in violation of title 1, sections 391.101 and 391.209 of the Administrative Code. CR.5877. That perfunctory conclusion was erroneous.

While section 391.101 states the purpose of HHSC purchase rules generally, section 391.209 identifies the procedures governing requests for proposals. Critically, neither regulation contains any requirement that HHSC refuse to provide public information when HHSC receives a valid PIA request. To the contrary, Plaintiffs participated in the procurement with the full understanding that their proposals were subject to public disclosure. See 9.RR.343-45 (citing Tex. Gov’t Code ch. 552). PIA generally requires that public information, which is “information that is written, pro- duced, collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business . . . by a governmental body,” be produced upon request by any member of the public unless the information is confidential by law or otherwise excepted from disclosure. Tex. Gov’t Code §§ 552.002, .221, .301-.302.

Despite this, Plaintiffs appear to fault HHSC for disclosing redacted copies of proposals under the PIA as an “unlawful disclosure,” because of title 34, section 20.208(d)(3) of the Administrative Code—a rule that did not form the basis for the trial court’s order, CR.5877. Children’s Plans.Mot.39-40. This rule from the Comptroller of Public Accounts governs state procurements utilizing the competitive sealed proposals procurement method and states: “A state agency may not disclose information derived from proposals or discussions with a respondent to any compet- ing respondent prior to award or cancellation of the solicitation.” 34 Tex. Admin. Code § 20.208(d)(3). But, even if this rule governed this procurement—which is unclear—a regulatory provision cannot trump PIA. Cf. Jackson v. SOAH, 351 S.W.3d

290, 298 (Tex. 2011) (holding that court rule of procedure governing confidentiality of documents must give way to PIA). Moreover, Plaintiffs cite no record evidence that HHSC “disclose[d] information derived from proposals or discussions with” any Plaintiff prior to an award. 34 Tex. Admin. Code § 20.208(d)(3) (emphasis added). That obligation is different in kind from HHSC’s PIA obligations because it doesn’t govern the proposals themselves and is irrelevant to the trial court’s order. Bidders agreed to a three-page procedure for PIA disclosures, 9.RR.343-45, and any expectation they had in secrecy succumbs to the mandate to provide information to any per- son requesting the bids under the PIA.

Moreover, as Kay Molina’s resolution of Superior’s bid protest shows, HHSC investigated and considered whether the disclosure of proposals under PIA had any effect on the solicitation and determined Superior, and others’, assertions lacked any factual basis—nobody could show how their score could have changed. ^[9].RR.531. Plaintiffs’ ipse dixit on this point, again, does not require a do-over of the multi-bil- lion-dollar procurement. d. The trial court’s order erroneously determined that the Commissioner violated the Texas due course provision.

The trial court also erred with its conclusory finding that the Commissioner violated the Texas Constitution’s due course provision. CR.5878. 2 The order says the

Commissioner’s “continuing practice of denying relevant information about a procurement to bidders until after the deadline to submit a bid protest violates [due course of law] . . . by not providing a meaningful bid protest process after promising one in 1 Texas Administrative Code Chapter 391.” Id. This language repeats verba- tim Wellpoint’s live petition, down to the mis-cited provision. CR.4273. Texas Children’s Health Plan (TCHP) appears to be the only other Plaintiff making this argument. CR.4279. TCHP argues that it was entitled to certain PIA requests which were denied, thus preventing them from meeting the protest burden of proof and denying THCP the ability to timely file and obtain meaningful review. CR 4729. But TCHP and Wellpoint offered no evidence or argument as to how the lack of information prejudiced them in the bid protest. And the trial court made this finding despite no Plaintiff raising due course arguments in their prehearing brief. See generally CR.3124-48.

This finding should be overturned because Plaintiffs lack a cognizable liberty or property interest in being awarded a government contract. Honors Acad., 555 S.W.3d at 68 (holding that charter schools have no vested property right in their charters under the due course provision); see also Orion Constr. Corp. v. United States, 125 Fed. Cl. 668, 677-78 (2016). And there is no “promise” cited in title 1, chapter 391 of the Administrative Code on which to base these claims. Even if Plaintiffs had some interest warranting due-course protection, their cursory arguments below provide no grounds to conclude they lacked an opportunity to be heard. See Orion Constr.,

125 Fed. Cl. at 678. In fact, their misguided litigation conduct resulting in the improper injunction foreclosed any meaningful agency appeal process. Supra Part.I. The trial court accordingly lacked any basis in law or fact to make this finding. e. The trial court justified the temporary injunction with statutory mandates that do not exist.

Beyond misconceiving the discretionary nature of the existing statutory requirements, the trial court also invented several of its own that HHSC purportedly violated.

First, the court found that “Defendant’s intended contract awards will fail to evaluate and certify that MCOs are reasonably able to fulfill the terms of the STAR contract as required by . . . § 533.0035 and to review MCOs to confirm their ability to fulfill the requirements of the CHIP contract as required by Texas Health & Safety Code §62.051(e).” CR.5877. But neither provision contains a supplementary investigation mandate beyond the procurement process the trial court acknowledges HHSC used. The statute does not specify the content or extent of evaluation, leaving this to the agency’s discretion. The order’s reliance on Health and Safety Code sec- tion 62.051(e) also defies reality—that provision applies only to “entit[ies] that enter[] into a contract” with HHSC, notwithstanding that the court could not simultaneously enjoin the Commissioner from contracting with the winning bidders while violating a review procedure that only applies to the parties to a final contract. See Tex. Health & Safety Code § 62.051(e); CR.5877.

At bottom, HHSC exercised absolute discretion to certify the bidders by evalu- ating their RFP responses and their responses to the certification questionnaire, 5.RR.275, to make the statutorily required certification. Plaintiffs cannot specify what the Commissioner should have done differently or identify any limit on the

Commissioner’s statutory discretion that she allegedly exceeded. Simply labeling HHSC’s certification a “self-certification” because it considered the bidders’ responses fails to show that the certification contemplated exceeded the Commissioner’s authority.

Plaintiffs’ assertion that HHSC did not independently evaluate bidders’ certifi- cations is also not accurate. The key testimony the Children’s Plans invoke, for ex- ample, confirms that evaluators used a “four corners” approach, meaning that HHSC is not statutorily required to conduct additional investigation into the bidders. ^[5].RR.272-74. Nothing in the statute prohibits HHSC from certifying based on the bids and questionnaires.

Second, the statements of statutory purpose found in section 533.002 and sections 391.101 and 391.209 impose no duty on the Commissioner to do anything other than to “implement the Medicaid managed care program by contracting with managed care organizations in a manner that, to the extent possible . . . promote[s] continuity of care [and] . . . reduces administrative and other nonfinancial barriers for recipients in obtaining health care services.” Tex. Gov’t Code § 533.002(1)(B), (6) (emphasis added). The Commissioner has done precisely this through designing the managed care program as a whole, offering different product lines, and requiring contractual terms that address these factors. And section 533.002 provides wide discretionary safe harbor with the language “to the extent possible.” See id. Plaintiffs’ own exhibits below admitted that HHSC scrutinized continuity of care by “con- duct[ing] a robust, year-long readiness review prior to the contract operational start date to ensure smooth implementation.” CR.3152. Thus, these provisions form no valid grounds for enjoining the Commissioner from completing the procurement.

Third, Plaintiffs’ assertion that CHIP and STAR services cannot be procured in the same RFP also lacks any basis in statute. CR.5878. The trial court concluded that “Defendant’s intended contract awards will unlawfully award mandatory CHIP contracts to MCOs to which Defendant intends to award mandatory STAR contracts in violation of Texas Health and Safety Code §§ 62.055 and 62.155.” CR.5878. Any reader would search in vain to locate such a prohibition in these statutes because this purported mandate was created of whole cloth. Rather, the text provides that the Commissioner “may give preference to a person who provides similar coverage under the Medicaid program.” Tex. Health & Safety Code § 62.155(c)(1). If she were to recognize a CHIP MCO for satisfying statutory preferences accorded to Medicaid

MCOs, she would be squarely within this statutory authority. See id.

In any event, HHSC’s decision to procure the CHIP piece with the mandatory STAR piece is consistent with the best-value scoring to award the CHIP contracts competitively, and, more importantly, consistent with the Commissioner’s obligation to “coordinate the child health plan program with the Medicaid program.” Tex. Health & Safety Code §§ 62.051(a), .053(3); 9.RR.528-29. Further, HHSC consid- ered continuity of care through this choice because it would provide “[t]he least disruption in the delivery of Covered Services to Members.” 9.RR.528 (citing Tex. Health & Safety Code § 62.051(b); Tex. Gov’t Code § 2155.144(d)(11)).

2. Plaintiffs’ claims seek an impermissible retrospective remedy. Plaintiffs lack a judicially enforceable right to compel the Commissioner to redo the procurement because nothing in statute authorizes such relief. And any such judicial remedy would be impermissibly retrospective, running afoul of sovereign immunity.

a. The procurement statutes contain no “redo” remedy. Even if the procurement statutes contain commands that weren’t followed, the question is whether the Legislature has provided a specific consequence that must result from the agency’s inability to satisfy those commands. In re Stetson Renewables Holdings, LLC, 658 S.W.3d 292, 297 (Tex. 2022) (orig. proceeding). It has not.

When several remedial actions could form the basis for an appropriate response, it is for the Legislature to make such policy choices—not for the courts to judicially impose the consequence on the agency. Id. As the Supreme Court explained, “[t]he mere existence of so many different potential consequences of the failure to abide by a statutory requirement—particularly given that the legislature can freely choose among them—should generate judicial caution.” Id. at 296. “Such choices are the proper domain of the legislature.” Id. at 297. But “[f]ashioning an extratextual judicial remedy against the executive branch . . . creates a serious risk that the courts will intrude into the prerogatives of both other branches.” Id. And “the legislature’s au- thority is at stake, too,” because “it is primarily for the legislature to determine how far it is worth pressing to achieve compliance with its own statutory directives.” Id.

In this case, no statute says that a procurement must be redone whenever statu- tory requirements are not met. The lack of a legislatively mandated judicial remedy is fatal to Plaintiffs’ claims. See Morath v. Kingsville ISD, 710 S.W.3d 918, 925 (Tex. App.—15th Dist. 2025, no pet.). This Court recently applied the same principle in holding that even if the Texas Education Commissioner violated a statutory requirement by failing to issue school ratings by statutory deadlines for school years in which COVID-19 hobbled public school operations, cancelling those ratings altogether, as the plaintiffs demanded, was not a necessary consequence flowing from shortfalls in the TEA Commissioner’s statutory duties. Id. So too here. No statute Plaintiffs in- voke mandates the unjustified and meritless disruption of the MCO procurement program they demand and have wrought on the State for several years.

To be sure, there are several potential remedies that the Legislature could have fashioned to address the Commissioner’s purported violation of statutory requirements governing the procurement process: It could require HHSC to “either redo something, fix something, or sign the contracts.” 5.RR.180. In 2020, for example, the procurement was redone; the Legislature could have mandated such a remedy. It also could have provided for additional rights to losing bidders as has been done at the federal level under the Tucker Act. See 28 U.S.C. § 1491(b)(1). Or, more to the point, it could have allowed disappointed bidders to sue the Commissioner for defects in the procurement process, as it did for political-subdivision procurements. Tex. Loc. Gov’t Code §§ 252.061, 262.033. If anything, the Legislature’s choice not to allow similar suits challenging state procurements indicates an intention to deny attempts at judicial intervention, as Plaintiffs seek here. See Fireman’s Fund Cnty. Mut. Ins. Co. v. Hidi, 13 S.W.3d 767, 769 (Tex. 2000) (per curiam) (“When the Leg- islature has employed a term in one section of a statute and excluded it in another, we presume that the Legislature had a reason for excluding it.”).

The Legislature chose none of these options. And in the absence of such consequences in the statute, the Commissioner “enjoys the unrestricted power . . . to determine those with whom [she] will deal.” Tex. Highway Comm’n, 234 S.W.2d at 860. This Court should not impose a judicially crafted one in the first instance. See Stetson Renewables Holdings, 658 S.W.3d at 297; Kingsville ISD, 710 S.W.3d at 925.

b. Redoing the procurement is fundamentally retrospective. Plaintiffs’ claims are premised on their assertion that the Commissioner acted ultra vires by creating an “unlawful procurement process.” E.g., Superior.Mot.^[2] (emphasis added). To the extent Plaintiffs allege that the Commissioner has committed ultra vires acts by authorizing a solicitation that was illegal, they seek an impermissible form of retrospective relief barred under ultra vires principles. Ultra vires relief requires an ongoing violation of a plaintiff’s rights. Util. Assocs., 517 S.W.3d at 312-13. But when Plaintiffs agreed to the terms of the RFP by submitting their proposals, they waived any claim of an ongoing violation of their rights 3 not to be subjected to an unlawful process. ^[9].RR.303; see Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007) (“We also hold that a party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action.”). It was at that point the nature of any relief the Court could have granted became retrospective for purposes of ultra vires law. See Util. Assocs., 517 S.W.3d at 309 (“The third limitation [of an ultra vires suit] relates to the nature and effect of the remedy sought. The remedy must be prospective in nature – i.e., compelling legal compliance going forward, as opposed to awarding retrospective relief to remedy past violations.”).

In Utility Associates, the court declined to entertain an ultra vires suit that would “effectively [] undo a contract award previously approved by the Austin City Council, invalidate an already-executed contract between the City and Taser, reopen the previously concluded procurement process, and compel the City Defendants to re- award the contract to Utility instead.” Id. at 312. Although there is not yet an exe- cuted contract, there is no question Plaintiffs seek to reopen the bid-evaluation process and start it over so they can get another bite at the apple. CR.3279. Thus, Plaintiffs’ demand—at the insistence of their expert witness—that the Commissioner “redo the entire process” ignores their acquiescence in the terms of the RFP (until they found out they lost) and is entirely backward-looking. Id. In other words, even if the trial court were correct to find that the RFP should have but does not consider

MCOs’ past performances, for example, the agency’s intent to award the contracts is not the type of “ongoing violation” it can simply cease prospectively as with a proper ultra vires claim. That the agency would have to go back to square one of the procurement process and change the RFP demonstrates that Plaintiffs seek prohibited retrospective relief.

HHSC’s decisional process as to the RFP concluded when Wellpoint’s pre-bid protest was overruled. ^[9].RR.547. Wellpoint agrees that it cannot “seek cancellation of any procurements,” Wellpoint.Mot.^[15], but the rules established in the RFP, which require bidders to notify HHSC of defects in the RFP before bidding, are the procurement. Wellpoint’s decision to proceed with the procurement irrevocably waived any claim seeking to retrospectively create a new procurement. See Util. As- socs., 517 S.W.3d at 312. And the same is certainly true for the other Plaintiffs, who filed no pre-bid protests at all. ^[9].RR.303.

B. Equity favors the Commissioner.

In addition to showing a probable right to relief, Plaintiffs “must plead and prove” a “probable, imminent, and irreparable injury in the interim.” Loe, 692

S.W.3d at 226. “An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The “principles, practice and procedure governing courts of equity shall govern proceedings in injunctions.” State v. Tex. Pet Foods, Inc., 591 S.W.2d 800, 803 (Tex. 1979) (quoting Tex. R. Civ. P. 693).

Here, in addition to the Commissioner’s likelihood of success on the merits, the “equitable balancing of th[e] harms” favors the Commissioner. In re State, 711 S.W.3d 641, 645 (Tex. 2024) (orig. proceeding). Along with the harm “that will be- fall either party,” courts must consider “the harm that other parties or the public will suffer if relief is granted.” Id. On balance, equity favors the Commissioner: Although the harm to the Commissioner (and thus, the State) is far more probable, imminent, and irreparable than the harm to Plaintiffs, allowing the temporary injunction to survive puts the healthcare of over four million low-income Texans at jeopardy. Equity does not tolerate this unjust result.

1. Start with the harm to the Commissioner (and by extension, the State). As the “Supreme Court has repeatedly reaffirmed,” the State has “an ‘intrinsic right to . . . enforce its own laws.’” City of San Marcos, 714 S.W.3d at 245 (quoting State v. Hollins, 620 S.W.3d 400, 410 (Tex. 2020) (per curiam)). That bedrock principle an- imates with equal force where the State has a significant interest in seeing its procurement laws executed. In enacting statutes vesting expansive authority and discretion in the Commissioner, the Legislature directed that critical STAR and CHIP programs operate efficiently and effectively, see Tex. Gov’t Code § 532.0051; Tex.

Health & Safety Code §§ 62.051(a), .053(3), and that the regular procurement of services from MCOs occurs according to the Commissioner’s plan, see Tex. Gov’t Code § 536.052(b). No doubt, the Commissioner has an interest in fulfilling this statutory mandate, just as the State has an important interest in having the procurement process operate without interruption.

Additionally, as explained above, the Legislature granted the Commissioner ab- solute discretion in carrying out this statutory plan. And for good reason: Disruption to that plan seriously prejudices the State, which carefully designed the current plan to transition and protect continuity of care. As Plaintiffs acknowledge, “HHSC spent significant time and State resources” to complete this procurement; only after years of reform, cross-government collaboration (vertical and horizontal), and numerous pre-bid opportunities for collaboration with Plaintiffs themselves was the procurement accepted. Tex. Gov’t Code § 533.002(1)(B), (6); Children’s Plans.Mot.^[9], 24. The trial court caused a grave inequity by enjoining that process only after Plaintiffs learned they would not receive contracts.

One traditional purpose of a temporary injunction has been “to preserve the status quo of the litigation’s subject matter pending a trial on the merits.” Butnaru, 84

S.W.3d at 204. The status quo is “the last, actual, peaceable, non-contested status which preceded the pending controversy.” In re Newton, 146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding). As the Supreme Court recently explained, however, discussing “preservation of the status quo” “offer[s] little help to” courts because “de- bates about how to define the status quo can descend quickly into lawyerly word- play.” In re State, 711 S.W.3d at 644. To the extent preserving the status quo is rele- vant here, it too favors the Commissioner. There is no status quo to preserve here, because the last uncontested status is, at the latest, the moment before the NOIA STAR and CHIP contracts to MCOs other than Plaintiffs. But if that is the status quo Plaintiffs seek to preserve, then imagine the irreparable harm to the State: Re- turning to that status quo would require retrospective relief—either undoing the NOIA or undoing the entire procurement—and both violate sovereign immunity.

Since it went into effect, the injunction halted the entire procurement process. Not just limited to the Plaintiffs’ specific, covered region, the injunction interferes with the entire statewide implementation of the STAR and CHIP programs. Plain- tiffs nonetheless insist that their concern is for the 1.5 million patients who must change plans if the procurement is accepted. See Children’s Plans.Mot.26; see also Wellpoint.Mot.^[19]. But Plaintiffs miss the larger point beyond their own financial interest: These programs are implemented statewide and affect over four million low-income Texans; they involve billions of dollars and are not only a large percentage of HHSC’s budget, but of the entire State budget. If the temporary injunction is not vacated, much of what HHSC and the Commissioner have done to reprocure the contracts will be wasted—all so that Plaintiffs can place a thumb on the scale in their favor the next go-round.

2. Next, consider the harm to Plaintiffs. Whatever injuries Plaintiffs claim to have suffered are the ordinary results of participation in any competitive market. As a legal matter, Plaintiffs can prove no significant harm resulting from the procurement that is ripe, supra Part I, or irreparable.

In contrast to the significant harms the State is currently suffering—to its sover- eignty and resources—there is no evidence that Plaintiffs have suffered harm. They cannot show that, but for the alleged deficiencies in the procurement, they would be exposed to an adverse outcome that they would not otherwise face. As explained above, Plaintiffs’ problem is not with the process but with the result. Even if HHSC utilized a procurement process that Plaintiffs like, they would still remain aggrieved until they were awarded the service contracts.

And with Plaintiffs’ current contracts set to naturally expire soon, Plaintiffs’ litigation strategy is obvious: After losing a fair procurement-bidding process, the only way to prevent (or extend) the inevitable expiration of their contracts is to force

HHSC to renew them. But the mutually agreed upon end of a contractual relationship cannot be a harm for purposes of injunctive relief. See, e.g., Turner v. Joshua ISD, 583 S.W.2d 939, 942 (Tex. App.—Waco 1979, no pet.) (finding the appellant had no right to a renewed contract after his contract ended by its own terms). Plaintiffs never had a right to a new contract and have not shown that they would have received one but for an abuse of discretion by the Commissioner. Thus, Plaintiffs “lack a legally cognizable interest” because “the court’s action on the merits cannot affect [Plaintiffs’] rights or interests.” Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex.

2012). Moreover, Texas law is also clear as to speculative, unmanifested harms: “fear and apprehension of injury are not sufficient to support a temporary injunction.” Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d 215, 227 (Tex. App.—Fort Worth 2009, pet. denied) (citing Jordan v. Landry’s Seafood Rest., Inc., 89 S.W.3d 737, 742 (Tex. App.—Houston [1st Dist.] 2002, pet. denied)); cf. also Part I (ripeness). Nor can Plaintiffs show how they “will suffer irreparable harm if relief is not granted.” In re State, 711 S.W.3d at 645 (emphasis added). Plaintiffs allege harm to contractual rights, but that type of harm “can rarely establish an irreparable injury.” N. Cypress Med. Ctr. Operating Co., Ltd. v. St. Laurent, 296 S.W.3d 171, 175 (Tex. App.—Houston [14th Dist.] 2009, no pet.). To be sure, HHSC’s procurement does not disqualify Plaintiffs from participating in a later re-procurement. And the harm Plaintiffs allege could be repaired through the available administrative-appeal pro- cess. In contrast, the State is the one irreparably harmed when its ability to provide the most timely and effective care to low-income Texans is so definitively blocked. One of the canonical equitable “principle[s] is that [e]quity aids the diligent and not those who slumber on their rights,” Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993) (citation omitted), and Plaintiffs delayed asserting their rights here until it became apparent they were going to lose, not when any purported illegality on the Commissioner’s part came to light. Plaintiffs’ complaints all turn on the procurement process itself. But if they were dissatisfied with that process, Plaintiffs had the option to protest the terms of the RFP. Instead, Plaintiffs slumbered, waiting to see how the procurement would turn out. Far from diligent, this Court should not award Plaintiffs’ last-ditch effort to re-do the gamble they voluntarily pursued.

Moreover, the consequences underpinning Plaintiffs’ position would be intolerable. If Plaintiffs succeed, this Court would greenlight any losing bidder to halt important government functions whenever they are dissatisfied with the outcome. A conclusory allegation of harm to revenue (like the one here), without more, would be legally sufficient to enjoin the State from moving forward with its business every time a contractor loses a bid. See Elcon Enters., 977 F.2d at 1479 (opining that courts cannot become “the forum for all manner of objections to procurement decisions”) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1302 (D.C. Cir. 1971)). Equity does not favor such a result—especially where, as here, the state actor has exercised broad, statutorily conferred authority to determine what furthers the public interest. Adopting Plaintiffs’ reasoning would not only open the floodgates, but it would also divert the State’s precious resources away from the execution of normal State busi- ness to paying the costs of court disputes with losing bidders. See Nettles v. GTECH Corp., 606 S.W.3d 726, 737 (Tex. 2020). Make no mistake, Plaintiffs’ position threatens the very structure of state government itself.

3. Finally, the Court must weigh the harm to the over four million Texans who rely on HHSC’s timely and efficient procurement of Medicaid and CHIP funds. How “other parties or the public will suffer” is especially important here—where Plaintiffs’ disruption has created uncertainty for over four million Texans. The public interest in the efficient statewide provision of Medicaid services vastly outweighs the MCOs’ corporate interests.

“[W]here the State is the appealing party, as it is here, its interest and harm merge with the public.” Vote.Org v. Callanen, 39 F.4th 297, 309 (5th Cir. 2022) (ci- tation modified). Ironically, despite that basic principle, Plaintiffs incorrectly believe they are the ones vindicating the public interest—specifically, arguing that, because they were not selected to provide care, “HHSC’s procurement of Medicaid and CHIP managed care contracts will negatively impact more than 1.5 million” care recipients. Superior.Mot.^[9]; see also Children’s Plans.Mot.26 (“[T]he Children’s Plans [are] qualitatively different from other MCOs.”); Wellpoint.Mot.^[19] (“[B]eneficiar- ies will also lose any meaningful choice of MCOs when the Commissioner replaces proven high-performing vendors like Wellpoint with unqualified or underqualified MCOs.”).

But the broad discretion to determine which contracts for which MCO best serve the public interest is vested solely in HHSC. Tex. Gov’t Code § 2155.144(c); see supra Part II.B.^[1]. Only HHSC can determine which contracts provide the State with the most efficient and effective services. HHSC made that decision, which is embod- ied in the NOIA. A judicial determination to the contrary would violate the separation of powers by “interfering with the policymaking responsibilities of other branches of government and seeking to control their choices regarding the use of public funds.” Nettles, 606 S.W.3d at 739. After thoughtful scrutiny, HHSC has determined Plaintiffs’ contracts are less preferable than the winning bidders’, so the public interest weighs against granting Plaintiffs contracts and in favor of allowing HHSC to proceed.

Plaintiffs also argue that “forcing Medicaid beneficiaries to change providers has negative consequences.” Children’s Plans.Mot.23; see also Superior.Mot.26-27;

Wellpoint.Mot.^[19]. But this procurement is not about the providers; it is about the middleman plans. Obviously, beneficiaries must change plans any time the winner of an earlier procurement loses a later one. And beneficiaries could choose to switch plans any time during the term of the contract. Once again, contractors cannot use incumbency as a shield against competition. Were it otherwise, any incumbent contractor could disrupt important government functions whenever it loses a bid.

Besides, as the Commissioner testified, changing plans here is not a harm when necessary to provide beneficiaries the health care they need. ^[6].RR.142-43. There can be no categorical, inflexible presumption that changing the plan for any reason will always fail to be in the best interests of the beneficiary. After all, beneficiaries will move to the plans that HHSC has determined are superior: The question of who gets to decide what plans serve beneficiaries best cannot be made by the MCOs for them- selves. That question must be resolved through the procurement process HHSC and many others in the State government spent years implementing. Finally, Plaintiffs argue that the temporary injunction will preserve the status quo. What they fail to mention is that their ideal status quo contradicts Texas public policy. The status quo cannot be, as Plaintiffs envision, a limbo between the procurement and the execution of new contracts, which Plaintiffs then argue necessitates extensions to their contracts pending appeal because of the natural expiration of the old contracts. The General Appropriations Act for the 2024-25 Biennium forecloses that possibility. Act of May 29, 2023, 88th Leg., R.S., ch. 1170, §1, art. IX, sec.

17.09(e), 2023 Tex. Gen. Laws 3573, 4511. It states that “[i]t is the intent of the Legislature that agencies and institutions minimize the use of extensions that extend a contract beyond the base term and any optional extensions provided in a contract.” Id. When the Legislature declares that Plaintiffs’ proposed status quo is against the public interest, and HHSC has used its legislatively vested discretion to determine which contracts best serve the public interest, the equities undoubtedly must weigh against a temporary injunction.

***

Equity weighs decisively in the Commissioner’s favor. None of the harms Plaintiffs allege are imminent, probable, or irreparable. On the other hand, allowing the temporary injunction to remain in effect will continue to jeopardize the public interest, which the State is charged with protecting. On balance, the State’s interest in carrying out its statutory mandate, plus the public’s interest in enjoying the fruits of an equitable, fair, and statutorily compliant procurement process outweigh Plain- tiffs’ unripe interest in controlling who the State contracts with. To the extent any status quo considerations are useful, they counsel in favor of the Commissioner.

C. The temporary injunction fails to comply with the mandatory requirements of Rule 683.

Should the Court find it has subject-matter jurisdiction, it should nevertheless reverse the trial court’s injunction order because it violates Texas Rule of Civil Procedure 683. To confirm that Plaintiffs satisfied the elements of a valid temporary injunction, Rule 683 mandates that “[e]very order granting an injunction . . . shall set forth the reasons for its issuance.” Tex. R. Civ. P. 683. The Rule’s requirements “are mandatory and must be strictly followed.” In re Luther, 620 S.W.3d 715, 722 (Tex. 2021) (orig. proceeding) (per curiam) (quoting InterFirst Bank San Felipe, N.A.

v. Paz Constr. Co., 715 S.W.2d 640, 641 (Tex. 1986)). And the trial court’s reasoning for the injunction “must be specific and legally sufficient, and not mere conclusory statements.” Indep. Capital Mgmt., L.L.C. v. Collins, 261 S.W.3d 792, 795 (Tex. App.—Dallas 2008, no pet.). Issuing a temporary injunction that does not strictly comply with Rule 683’s requirements is an abuse of a trial court’s discretion. Id.

Here, the trial court’s injunction order should be reversed because it lacks any nonconclusory reason for issuing. See CR.5875-84. It states that “Plaintiffs have established that Defendant has violated and will continue to violate the Texas Government Code, Texas Health and Safety Code, and Texas Administrative Code in procuring managed care contracts for STAR & CHIP in Texas.” CR.5877. At least six- teen provisions are included within conclusory sentences merely stating that they are violated—without any explanation, underlying findings, or interpretation of the pro- visions at issue. See CR.5877-78.

The Commissioner’s plea to the jurisdiction and response to the temporary injunction request, CR.2949-93, explains how the discretion given to the agency under each of these provisions defeats Plaintiffs’ ultra vires claims, and how Plaintiffs seek retrospective relief from the trial court without first seeking administrative remedies available to them. The trial court’s order fails to explain how the court could possibly have reached its conclusion that Defendant violated the cited statutes and regulations given the discretion afforded the Commissioner. Rather, the order merely provides a conclusory statement that the relief sought is prospective because contracts have not been signed yet. CR.5876. In the face of the Commissioner’s explanations and interpretations of the relevant statutes, and for all the reasons explained in Part

II.A, supra, the order’s bare recitals of statutory violations does not adequately set forth the reasons for issuing the temporary injunction.

Nor does the order address the Commissioner’s evidence or arguments concerning Plaintiffs’ lack of irreparable harm. See CR.2988-91. Instead, the order simply parrots Plaintiffs’ arguments about the economic consequences of losing the contracts. Thus, the trial court abused its discretion by issuing a temporary injunc- tion order that does not comply with the requirements of Rule 683, and it should be reversed as void. See Luther, 620 S.W.3d at 722.

D. The trial court erred by excluding evidence demonstrating

HHSC’s scoring methodology.

The Court should also vacate the temporary injunction because the trial court prejudicially erred by excluding various exhibits offered by the Commissioner through Ramirez, who is Deputy Executive Commissioner for MCS Contract Management and Procurement Strategy, and was formerly the Director of major procurements for Medicaid and CHIP. See 6.RR.202; 7.RR.21-25 (transcribing trial court’s exclusion of the Commissioner’s exhibits). Nothing in the evidentiary rules supports that highly probative evidence’s exclusion. The trial court’s error was reversible be- cause the evidentiary exclusions were incorrect, and the exclusion of the exhibits is likely to result in an improper judgment. State v. Cent. Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009).

1. The consensus scoring rubrics are admissible and probative.

The exhibits are probative to show that the Commissioner acted within her stat- utory authority in awarding the contracts. After a lengthy procurement process that followed every applicable statutory guideline, HHSC’s bid evaluators compiled scorings rubrics, which described, among other things, what factors HHSC considered in evaluating each bid. Plaintiffs seek to hide the truth this evidence proves: What better way to prove that HHSC did not comply with statutory guidelines than excluding evidence showing the exact factors HHSC considered in its evaluation pro- cess. Alas, despite its highly probative nature, the trial court excluded that outcome- determinative evidence based on objections of (1) hearsay and (2) lack of foundation. ^[7].RR.21-25. Each ruling is incorrect.

For starters, the evidence is not hearsay—it is a business record, admissible under Texas Rule of Evidence 803(6). As explained below, that is precisely how HHSC offered the evidence, and it squarely fits within the Rule’s expansive understanding of a business record: The scoring rubrics are “[a] record of an act [or] event” “made at or near the time by” HHSC evaluators as “a regular practice” “in the course of a regularly conducted business activity,” and nothing Plaintiffs might argue could “in- dicate a lack of trustworthiness” in its preparation. Tex. R. Evid. 803(6)(A)-(C), (E). At issue is whether “all these conditions [were] shown” through Ramirez’s hearing testimony—in compliance with Rule 902(10). See id. R. 803(6)(D). In other words, that leads this Court to the second question—whether the requisite foundation was laid to offer the proof through Ramirez.

HHSC met its burden by laying the necessary foundation through Ramirez to admit the scorings rubrics as evidence. As explained above, Rule 803(6) requires

“the custodian or another qualified witness”—here, Ramirez—to offer testimony that authenticates the evidence as compliant with Rule 902(10). Generally, Rule 902 outlines how certain evidence can self-authenticate. For business records, Rule 902(10) requires the proponent to submit a declaration showing, among other things not at issue, that the witness is familiar with the manner in which the record is created and maintained. Id. R. 902(10)(B) (“I am the custodian of records [or I am an employee or owner] of ___ and am familiar with the manner in which its records are created and maintained by virtue of my duties and responsibilities.”). HHSC made that showing through Ramirez’s testimony.

Ramirez’s testimony showed his familiarity with the creation and maintenance of the scoring rubrics. See 20.RR.345-46 (testifying about “what the consensus scoring rubric looks like for each bidder . . . with the information included in it from the scribe during the consensus scoring meetings”). Indeed, Ramirez’s familiarity with the procurement process manifests itself in several pages in the reporter’s record— where he meticulously outlines every detail relevant to what HHSC evaluators con- sider at the procurement meeting. See 20.RR.343-46. The relevant and probative nature of the consensus scoring rubrics was further shown through the testimony of HHSC officials Emily Zalkovsky and Kay Molina. 20.RR.307, 313, 314, 320, 323.

But an even more basic reason supports the evidence’s admissibility: HHSC complied with all that Rule 902(10) required. To admit self-authenticating evidence, radical familiarity with the scoring rubric’s substance was not required: “substantial[] compli[ance] with the language of Rule 902(10)(b)” is all HHSC needed to show. McElroy v. Unifund CCR Partners, No. 14-07-00661-CV, 2008 WL 4355276, at *3 (Tex. App.—Houston [14th Dist.] Aug. 26, 2008, no pet.). The Commissioner here exceeded the obligation to substantially comply with the Rule because Ramirez has in-depth knowledge of the scoring rubrics’ creation, evaluation, and approval process, as his testimony proves.

Sound policy supports why strict compliance with Rule 902(10) is not required.

Consider just one practical consequence: Were strict compliance required, HHSC, to admit the scoring rubrics as evidence, would have to accept mission impossible and find every evaluator that participated in the procurement process for each separate question. For even the government, that is an unfair ask. As HHSC argued at the hearing when the trial court sustained opposing counsel’s evidentiary objection, “[i]t would be a very significant undertaking” to get each “evaluator[] who partici- pated” in the scoring meetings to testify, as there were “a vast number of people” on “different teams for different questions.” 7.RR.21-25. Why mandate such a wasteful undertaking when a simpler option is available, documented extensively, and permitted under the Rules? Ramirez authenticated the scorings rubrics, and the trial court erred in ruling otherwise.

2. The exclusion is almost certain to result in an improper judgment. The court’s error was harmful because it abused its discretion in excluding this evidence. Caffe Ribs, Inc. v. State, 487 S.W.3d 137, 144-45 (Tex. 2016). The Supreme Court has observed that an evidentiary error’s correction does not require the proponent to show “that ‘but for’ the exclusion of evidence, a different judgment would necessarily have resulted.” State v. Cent. Expressway Sign. Assocs., 302 S.W.3d 866, 870 (Tex. 2009) (quoting McCraw v. Maris, 828 S.W.2d 756, 758 (Tex. 1992)). The Court need only find that the rendition of an improper judgment was probable. Id. A successful challenge to an evidentiary ruling usually requires the complaining party to show that the judgment turns on the particular evidence excluded or admitted. See, e.g., GT & MC, Inc. v. Tex. City Ref., Inc., 822 S.W.2d 252, 257 (Tex. App.—

Houston [1st Dist.] 1991, writ denied); Atl. Mut. Ins. Co. v. Middleman, 661 S.W.2d 182, 185 (Tex. App.—San Antonio 1983, writ ref’d n.r.e.).

The Commissioner’s offer of proof, 8.RR.225-227, 20.RR.305-353, put the court on notice of the exhibits’ evidentiary value to the case, but the court offered no reasoned explanation for their exclusion. See Caffe Ribs 487 S.W.3d at 144-45 ( “A trial court abuses its discretion when it acts without regard for any guiding rules.”) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)). It is difficult to conceive of how the case could not turn on evidence of how the bidders’ proposals were scored, which is crucial to deciding the question of whether the pro- curement process complied with applicable statutes. Accordingly, the trial court abused its discretion by omitting legal grounds in its explanation, 7.RR.21-25, and refusing to consider evidence without which it would have insufficient basis to resolve the ultra vires question.

Prayer The Court should reverse and render judgment dismissing Plaintiffs’ claims with prejudice. Alternatively, the Court should reverse the order temporarily enjoining the Commissioner from completing the procurement process.

Respectfully submitted.

Ken Paxton William R. Peterson Attorney General of Texas Solicitor General

Brent Webster William F. Cole First Assistant Attorney General Principal Deputy Solicitor General

Office of the Attorney General /s/ Cory A. Scanlon P.O. Box 12548 (MC 059) Cory A. Scanlon Austin, Texas 78711-2548 Assistant Solicitor General Tel.: (512) 936-1700 State Bar No. 24104599 Fax: (512) 474-2697 [email protected]

Jeffrey A. Stephens Assistant Solicitor General

Mohmed I. Patel Assistant Attorney General

Counsel for Appellant Cecile Erwin Young

Certificate of Compliance Microsoft Word reports that this brief contains 14,918 words, excluding ex- empted text.

/s/ Cory A. Scanlon Cory A. Scanlon No. 15-24-00114-CV

In the Court of Appeals For the Fifteenth Judicial District Cecile Erwin Young, in her Official Capacity as the Executive Commissioner of the Texas Health and Human Services Commission; Molina Healthcare of Texas, Inc.; and Aetna Better Health of Texas, Inc., Appellants, v. Cook Children’s Health Plan, Texas Children’s Health

Plan, Superior Health Plan, Inc., and Wellpoint Insurance Company, Appellees.

On Appeal from the 353rd Judicial District Court, Travis County

APPENDIX TO THE BRIEF FOR APPELLANT

CECILE ERWIN YOUNG

Tab Trial Court Order .................................................................................................. 1 Authorities ............................................................................................................ 2

Tab 1: T RIAL C OURT O RDER

Filed in The District Court of Travis

County, Texa s

OCT 4 2024

At CAUSE NO. D-1-GN-24-003839 Dis Clerk

COOK CHILDREN'S HEALTH PLAN; § IN THE DISTRICT COURT TEXAS CHILDREN'S HEALTH PLAN; § SUPERIOR HEALTHPLAN, INC.; and § WELLPOINT INSURANCE COMPANY, § § Plaintiffs, § § v. § TRAVIS COUNTY, TEXAS § CECILE ERWIN YOUNG, in her official § capacity as Executive Commissioner of the § Texas Health and Human Services § Commission, § § Defendant. § 353rd JUDICIAL DISTRICT

TEMPORARY INJUNCTION AND ORDER DENYING

DEFENDANT'S PLEA TO THE JURISDICTION

Before the Court are the Applications for Temporary Injunction (the "Applications") filed by Plaintiffs Cook Children's Health Plan ("Cook Children's"), Texas Children's Health Plan

("TCHP"), Superior HealthPlan, Inc. ("Superior"), and Wellpoint Insurance Company

(""Wellpoint," and collectively, "Plaintiffs"); and the Plea to the Jurisdiction (the "Plea"') filed by Defendant Cecile Erwin Young ("Defendant"), in her official capacity as Executive Commissioner of the Texas Health and Human Services Commission ("HHSC"). After considering Plaintiffs'

Applications and Defendant's response; Defendant's Plea and Plaintiffs' responses; the pleadings and attached evidence in these consolidated cases (Nos. D-1-GN-24-003839, D-1-GN-24-003874,

D-1-GN-004059, and D-1-GN-24-004327); the parties' prehearing briefing; the evidence admitted in the record and adduced at the hearing held on September 30, October 1, October 2, and October

4, 2024; applicable authorities; the arguments of counsel, and all other matters properly before the Court, the Court DENIES Defendant's Plea and GRANTS Plaintiffs' Applications.

169317251.2 Page | of 10

Page 5875

The Court makes the following findings:

I. The Court has subject-matter jurisdiction over the claims in these consolidated cases because Plaintiffs have alleged and offered evidence demonstrating that Defendant will act ultra vires in awarding, executing, and implementing the contracts arising out of Request for Proposals No. HHS0011152 (the "RFP" or "STAR & CHIP RFP") because she has acted ultra vires in administering the RFP. Plaintiffs properly seek only prospective relief specifically, injunctive relief prohibiting Defendant from awarding, executing, or otherwise implementing the intended RFP contracts and thus preventing further unlawful acts in connection with Defendant's procurement or contracting processes, as well as accompanying declaratory relief. Accordingly, sovereign immunity does not bar Plaintiffs' claims or deprive the Court of subject-matter jurisdiction.

Administrative Code Chapter 391; and e Defendant's continuing practice of refusing to consider as untimely any information submitted in supplemental protests and/or after the protest filing deadline is inconsistent with the procedural protections promised to protestants in bid protest rules that require consideration of a protest or appeal submitted after the filing deadline when good cause for delay is shown under Texas Administrative |