Texas Court Denies Sovereign Immunity to Conduent
The Supreme Court of Texas ruled the government contractor cannot claim immunity in a long-standing lawsuit.
Updated on Oct. 22, 2026 in Criminal Justice
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The Texas Supreme Court has ruled that the government contractor Conduent cannot pursue an immediate appeal regarding its sovereign immunity status. Consequently, the court remanded the lawsuit filed by M&M Orthodontics and Drs. Scott and Diana Malone back to the trial court.
Why it matters
The ruling clarifies that government contractors, as private entities deriving authority from contracts rather than the legislature, do not automatically qualify for the same immunity protections as state governmental units or officers.
The Texas Supreme Court vacated a 2024 opinion from the Third Court of Appeals and sent the 12-year-old case back to the trial court. The court noted that Conduent waited five years before initially raising its sovereign immunity arguments.
The players
Texas Supreme Court
This is the highest court for civil matters in the state of Texas.
Conduent
The company is a business process services firm that acts as a government contractor.
M&M Orthodontics
This dental practice is a plaintiff in the ongoing litigation against the contractor.
Scott and Diana Malone
These dentists are individual plaintiffs who were previously involved in state Medicaid fraud settlements.
The details
The dentists allege that Conduent harmed their orthodontic practices through improper handling of Medicaid prior authorizations. Because Conduent is a limited liability company rather than a governmental unit or individual state employee, the court rejected its attempt to utilize statutes reserved for state immunity.
Timeline
2014: Dentists initiated the lawsuit against the company.
2024: The Third Court of Appeals issued an opinion on the immunity status.
September 2026: An attorney informed the court that two dentists had died.
October 21, 2026: The Texas Supreme Court issued its ruling.
Legal Context
This decision addresses the scope of the doctrine of sovereign immunity by limiting its application to private corporations acting as state contractors. It follows a pattern of judicial scrutiny regarding whether the shield of governmental immunity extends to private third parties.
This case highlights the ongoing oversight of contractors managing state Medicaid funds and the legal accountability of businesses handling public programs. Future proceedings in the trial court may set new precedents for how businesses contracted by the state are held liable for procedural errors.
The takeaway
This ruling establishes that private contractors cannot rely on government-specific legal shields to avoid litigation. Businesses operating under state contracts should anticipate greater scrutiny regarding their accountability in civil disputes.
Further reading
For more on state court proceedings, visit the Criminal Justice section.
Source note: This article includes information reported by Texas Dentists for Medicaid Reform.
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