633 S.W.3d 1
Tex. App.2021Background
- HCA filed a sealed qui tam action under the Texas Medicaid Fraud Prevention Act (TMFPA), alleging Shire ran two programs—free "nurse educator" services and reimbursement-support services—that induced prescribers to favor five Shire-covered drugs, constituting illegal kickbacks.
- Shire moved to dismiss under Texas Rule of Civil Procedure 91a, arguing the claims were barred by the TMFPA public-disclosure bar, the programs are not kickbacks as a matter of law, and HCA failed to plead requisite scienter.
- The trial court denied Shire’s Rule 91a motion; Shire sought mandamus relief from the Court of Appeals.
- The Texas Attorney General intervened in this court proceeding and opposed dismissal under the public-disclosure bar (making that ground moot for mandamus review).
- The Court of Appeals denied mandamus, holding Rule 91a requires dismissal only when recovery is foreclosed as a matter of law (legally impossible) and Shire failed to show the TMFPA claims were so foreclosed.
Issues
| Issue | Plaintiff's Argument (HCA) | Defendant's Argument (Shire) | Held |
|---|---|---|---|
| Public-disclosure bar under TMFPA | HCA is an original source; AG may oppose dismissal | Claims were publicly disclosed earlier and must be dismissed | Mooted by AG's opposition; court did not decide on merits |
| Whether alleged programs are kickbacks as a matter of law | Programs can constitute remuneration (free services or services below fair market value) that induce prescriptions | Similar federal cases, OIG guidance and advisory opinions show such manufacturer-tied services are permissible; therefore no legal basis | Not foreclosed as matter of law; factual inquiry required, so Rule 91a dismissal not warranted |
| Sufficiency of scienter pleading under TMFPA | HCA pleaded conscious intent/knowledge and factual allegations (confidential witnesses, training, motive) supporting scienter | Alleged reliance on OIG guidance and related decisions negates knowing violation; HCA’s scienter allegations are insufficient | Failure-to-plead-detail issues fall under Rule 91 special-exception practice; Shire did not show scienter impossible as matter of law, so Rule 91a dismissal improper |
| Mandamus standard / scope of Rule 91a | N/A | Rule 91a permits pre-discovery dismissal only when recovery is legally impossible (foreclosed by settled law); otherwise summary judgment or special exceptions are proper | Court reiterates Rule 91a requires that plaintiff's recovery be foreclosed as a matter of law; Shire did not meet that burden, so denial of Rule 91a motion was not an abuse of discretion |
Key Cases Cited
- In re Essex Ins. Co., 450 S.W.3d 524 (Tex. 2014) (Rule 91a dismissal appropriate where law precluded plaintiff’s recovery)
- In re Houston Specialty Ins. Co., 569 S.W.3d 138 (Tex. 2019) (Rule 91a dismissal proper where requested declarations sought to establish non‑liability barred by precedent)
- Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C., 595 S.W.3d 651 (Tex. 2020) (affirmative defenses can support Rule 91a dismissal when petition pleads facts that trigger the defense)
- In re Farmers Tex. Cty. Mut. Ins. Co., 621 S.W.3d 261 (Tex. 2021) (Rule 91a requires that recovery be foreclosed as a matter of law; if not, dismissal is improper)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus standard: abuse of discretion review and no adequate remedy by appeal)
- Tex. Dep't of Corrections v. Herring, 513 S.W.2d 6 (Tex. 1974) (special-exception procedure protects chance to replead; summary‑judgment on pleadings cannot circumvent Rule 91 protections)
- Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (final-judgment rule for appeals)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (federal plausibility standard discussed for contrast with Rule 91a)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (federal pleading principles on plausibility contrasted with Rule 91a)