In re Novartis Pharmaceuticals Corporation
No. 24-0239
Supreme Court of Texas
October 24, 2025
Supreme Court of Texas
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No. 24-0239
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In re Novartis Pharmaceuticals Corporation,
Relator
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On Petition for Writ of Mandamus
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Statement of JUSTICE YOUNG and JUSTICE SULLIVAN respecting the denial of the petition for writ of mandamus.
This case presents weighty issues worthy of our full attention, and perhaps the Court should have set it for oral argument. But the decision to deny the petition is understandable given that there is a new statewide appellate court that has already held that it has jurisdiction over disputes like this one. Awaiting that court’s view of the issues presented may assist this Court in its eventual and inevitable consideration of the constitutional concerns surrounding qui tam litigation under what is now called the Texas Health Care Program Fraud Prevention Act.
I
“[T]he Texas Medicaid Fraud Prevention Act,” as this statute was once known, “is a powerful tool for targeting fraud against the Texas Medicaid program and securing the program’s integrity.” In re Xerox Corp., 555 S.W.3d 518, 525 (Tex. 2018) (citing
Thus, a private “person may bring a civil action for a violation of [the Act] for the
In this case, Health Selection Group, LLC (HSG) sued Novartis under the Act, alleging that Novartis bilked Texas Medicaid out of hundreds of millions of dollars through fraudulent marketing schemes. The State declined to take over the action. Novartis filed a plea to the jurisdiction and motion to dismiss in which it argued, among other things, that HSG lacked standing. The State asserted a continuing interest in the case and opposed Novartis’s motion, which the trial court denied.
The Sixth Court of Appeals denied Novartis’s ensuing mandamus petition without analysis. In re Novartis Pharms. Corp., No. 06-24-00005-CV, 2024 WL 874686, at *1 (Tex. App.—Texarkana Mar. 1, 2024).
This Court does the same today, declining to take up a pair of arguments against this qui tam action. First, Novartis contends that because its alleged violations of the Act did not injure HSG, HSG lacks standing and the courts lack subject-matter jurisdiction. Second, it argues that the Act’s qui tam provisions violate the separation of powers established by
II
When it denied mandamus relief, the Sixth Court provided no meaningful analysis of Novartis’s arguments about standing and separation of powers. See 2024 WL 874686, at *1 (recounting the mandamus standard and then announcing the conclusion that mandamus relief is denied). Our Court would surely benefit from thoughtful consideration of these difficult questions by the lower courts.
Analysis of HSG’s standing is likely to begin, but probably should not end, with Justice Scalia’s opinion for the Court in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000). The Stevens Court held that a qui tam relator under the federal False Claims Act can have Article III standing as a partial assignee of the government’s damages claim, because “the assignee of a claim has standing to assert the injury in fact suffered by the assignor.” Id. at 773 (emphasis added); accord id. at 771–74 (reiterating that this holding was conditioned on an “injury in fact,” not merely on some violation of law). HSG may find some support in Stevens, to whatever extent Texas’s standing doctrine “parallels the federal test for Article III standing.” Heckman v. Williamson County, 369 S.W.3d 137, 154 (Tex. 2012); cf. Tex. Dep’t of Fam. & Protective Servs. v. Grassroots Leadership, Inc., 717 S.W.3d 854, 866–73 (Tex. 2025).
Consider a hypothetical law that encouraged people to report traffic violations that caused no injury: An ordinary citizen can sit at an intersection, record videos of vehicles running red lights, bring punitive civil suits, and recover monetary awards. In that scenario, the people caught on video violated Texas law, but the relator suffered no injury. The State suffered an injury in law—the violation of statutes that govern traffic. That is why we can be ticketed for speeding or other legal violations even when there is no concrete harm that results. In this hypothetical, did the State suffer any injury in fact? Even if so, is it the kind that it could assign to a relator? To quote David Byrne: “I’ll tell you later.” Stop Making Sense (Arnold Stiefel Co. 1984).
As for Novartis’s separation-of-powers argument, HSG will find less comfort in the United States Reports. Justice Thomas has outlined “substantial arguments that the qui tam device is inconsistent with Article II [of the U.S. Constitution] and that private relators may not represent the interests of the United States in litigation.” United States ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419, 449 (2023) (Thomas, J., dissenting); accord id. at 442 (Kavanaugh, J., joined by Barrett, J., concurring); Wis. Bell, Inc. v. United States ex rel. Heath, 145 S. Ct. 498, 515 (2025) (Kavanaugh, J., joined by Thomas, J., concurring). Of course, Article II of the Texas Constitution—a “strong separation-of-powers provision,” see Abbott v. Harris County, 672 S.W.3d 1, 3 (Tex. 2023) (citing
If Texas’s qui tam statute suffers from either of the constitutional flaws Novartis purports to identify, our legislature needs to know it soon and to hear it from a statewide court. If for no other reason, there are federal financial incentives hanging in the balance. See Xerox, 555 S.W.3d at 538–39 & nn.115–22 (explaining that a State “with qui tam laws meeting specified federal standards can retain an additional ten percent of Medicaid recoveries” (citing
Fortunately, the legislature recently created the Fifteenth Court of Appeals, which has “statewide jurisdiction for a range of cases that implicate the State’s interests.” In re Dallas County, 697 S.W.3d 142, 146 (Tex. 2024). The Fifteenth Court came into existence about five months after Novartis filed its mandamus petition in this Court. And the Fifteenth Court has held that it has jurisdiction over mandamus petitions like this one. See In re Sanofi-Aventis U.S. LLC, 711 S.W.3d 732, 737–38 (Tex. App.—15th Dist. 2025, orig. proceeding).
In that case, APBQR, LLC sued Sanofi-Aventis U.S. LLC on behalf of the State of Texas under the Act. Id. at 735. Sanofi moved to transfer the case to another county under the statute’s default-venue provision. Id. The trial court denied the motion, and Sanofi filed a mandamus petition in the Fifteenth Court. Id.
APBQR argued that the court of appeals lacked jurisdiction. Id. at 736. It pointed out that the Fifteenth Court’s original mandamus jurisdiction “is limited to writs arising out of matters over which the
court has exclusive intermediate appellate jurisdiction.” Id. (quoting
The Fifteenth Court rejected that argument. It noted that the suit was “brought in the name of the person and of the state.” Id. at 737 (quoting
We express no view here on whether the Fifteenth Court properly exercised mandamus jurisdiction in Sanofi. For present purposes, the important thing is that the court’s analysis would seemingly allow it to exercise jurisdiction over a mandamus petition like Novartis’s. Both
cases involve qui tam suits (brought under the same Act) in which the State declined to intervene. Under Sanofi’s logic, the suit against Novartis is also a “matter[] brought by or against the state.”
This means that a statewide court has now declared itself the proper forum to hear the grave challenges to the Act that Novartis raises here. Indeed, the Fifteenth Court indicated in Sanofi that other suits involving the Act were already pending before it. See Sanofi, 711 S.W.3d at 737 n.4. If the Act really does suffer from the constitutional deficiencies alleged by Novartis, we expect that future litigants will provide the Fifteenth Court with the opportunity to carefully consider them. The Fifteenth Court would greatly assist this Court by presenting its analysis in a written
Indeed, at least as a formal matter, we see no reason that Novartis could not file a mandamus petition in the Fifteenth Court raising its challenges to the Act. After all, “this Court’s failure to grant a petition for writ of mandamus is not an adjudication of, nor even a comment on, the merits of a case in any respect, including whether mandamus relief was available.” In re AIU Ins. Co., 148 S.W.3d 109, 119 (Tex. 2004). “The writ of mandamus is a discretionary writ,” Chambers v. O’Quinn, 242 S.W.3d 30, 32 (Tex. 2007), and there are many reasons why a justice may vote to deny a mandamus petition. That is why a party could challenge the trial court’s decision to compel arbitration even though two separate courts of appeals and this Court had previously denied his
mandamus petitions raising the same issue. See id. at 31–32. Lower courts are familiar with this principle. See, e.g., In re Mason-Gibson, Inc., No. 06-21-00120-CV, 2022 WL 452279, at *3 (Tex. App.—Texarkana Feb. 15, 2022, orig. proceeding) (entertaining a mandamus petition even though the relator had previously “filed the same mandamus petition requesting the same relief in the Texas Supreme Court” and this Court had denied relief); In re Arpin Am. Moving Sys., LLC, 416 S.W.3d 927, 929–30 (Tex. App.—Dallas 2013, orig. proceeding) (entertaining a mandamus petition even though the court of appeals had “denied an earlier petition for writ of mandamus filed by relator for lack of proper certification under
To be sure, parties should not abuse the judicial system by flooding the courts with an endless stream of identical petitions. As a general matter, an identical petition should meet the same fate, if only for the sake of judicial economy. But this case’s unusual circumstances likely place it in a class of one, or at most of a very few, meaning that allowing Novartis to petition the Fifteenth Court for mandamus would not risk re-urged mandamus in other cases. The legislature decided that a statewide court was needed to hear certain disputes involving state interests. When Novartis filed its petitions in the Sixth Court and in this Court, that new court did not yet exist, but it has now become operational. From now on, if Sanofi is correct, all such petitions will go to the Fifteenth Court and any eventual appeal from Novartis’s underlying proceeding will end up in that court, too. Given that the Sixth Court did not explain why Novartis’s petition lacked merit and this Court did not opine on the merits at all, it might make sense to give the court hearing any eventual
appeal an opportunity to assess the Act’s constitutionality sooner rather than later, assuming that the other prerequisites of mandamus review are met to that court’s satisfaction.
In sum, another challenge to the Act’s constitutionality is likely to arise, whether from Novartis or from a future litigant. When it does, we hope that the court of appeals will take the issues seriously enough to dispose of them in a written opinion. And, in an appropriate case, we anticipate this Court settling those issues once and for all.
Evan A. Young
Justice
James P. Sullivan
Justice
OPINION FILED: October 24, 2025