Chief Justice Scott Brister
Dissenting from the majority’s decision to deny mandamus relief to a defendant in a Medicaid fraud qui tam lawsuit brought by a private litigation fund, Chief Justice Scott Brister, following up on Justice Evan Young and James Sullivan’s concurring opinion in an earlier phase of the case, has blown the whistle on the constitutionality of allowing private speculators to bring these penalty-only lawsuits without participation from the state.
In re Novartis Pharmaceuticals Corporation (No. 15-25-00207-CV; April 30, 2026) arose from a qui tam action brought by Health Selection Group, LLC (HSG), a litigation fund represented by Mark Lanier, against Novartis under the Texas Medicaid Fraud Prevention Act (§§ 36.001-.132, Human Resources Code), alleging that Novartis defrauded the Medicaid program of millions of dollars through fraudulent marketing schemes. The state declined to take over the action from the qui tam relator, so Novartis moved to dismiss on the basis that the relator lacked standing. The state opposed the motion. The Harrison County district judge denied it, and the Texarkana Court of Appeals followed suit. Novartis sought mandamus relief from SCOTX,which likewise denied it. In a concurring opinion, however, Justices Young and Sullivan sounded the alarm about the constitutional issues raised by the statute and invited consideration by the courts below. Novartis then petitioned the 15th Court of Appeals for mandamus relief, court denied at this stage of the game on the basis that Novartis had an adequate remedy on appeal.
“I have neither sympathy nor tolerance for scoundrels,” Chief Justice Brister’s dissent begins, “who use fraud to get rich at the expense of public health and welfare programs. But I would not construe the Legislature’s response in the Act here, much less any provision of the Texas Constitution, to encourage venture capitalists to file claims in state court that the federal courts have repeatedly rejected because they threaten to cut off services that actually benefit health care programs. The question here is who can exercise the State’s executive power to punish public companies with civil penalties when the State’s constitutional officials choose not to do so. The Attorney General has a statutory right to take over this claim and either pursue or dismiss it, but need not do either. Whether to encourage privateers to perform this public duty instead by offering jackpots far beyond any amount the State could possibly have lost, and based only on the kind of legalistic ‘fraud’ alleged here, is a policy choice for the Legislature. But whether it exceeds constitutional limits is for the courts.” And he was just getting started.
First, the Chief took issue with the majority’s opinion that Novartis has an adequate remedy by appeal. “[T]his is a mass tort case,” he observed, involving millions of sales calls, office visits, prescriptions, and Medicaid reimbursements going back a dozen years.” To take this case all the way through trial would be “impracticable, and the waste of judicial and public resources irreversible.” Pointing to recent SCOTX authority in favor of a “flexible mandamus standards” where “the irreversible waste of judicial and public resources that would be required absent mandamus relief justifies granting such relief,” the Chief noted that defending this case would involve “monumental costs and delays.” Additionally, since HSG’s claims against Novartis “implicate literally millions of transactions going back over a dozen years,” the case will likely never get to trial, undermining the majority’s rationale. Because both parties will only present a minute fraction of those millions of transations, “neither due process nor logic would allow jurors or judges to infer what happened in millions of other transactions without evidence of them.”
Moreover, the Chief added, this case is nowhere close to being “mature” enough to even contemplate a trial, much less schedule one. As he pointed out, Novartis will be under increasing pressure to settle it rather than drag through years, and perhaps decades, of litigation before ever getting the constitutional issues before the court. And if Novartis’s constitutional arguments are correct, the courts wouldn’t have subject-matter jurisdiction to begin with, first because HSG has no standing to sue (it has no injury) and “[its] suit for punitive damages violates the separation of powers provision absent participation by a member of the State’s executive branch to whom such powers are constitutionally assigned.” Chief Justice Brister argues that “treating this petition as about nothing more than ‘mere’ cost and delay ignores what this Court was created to do. We sit on a tribunal designed ‘to give special attention to those cases the Legislature has defined as critical to the State’s interests,’ and we exercise statewide jurisdiction so ‘all Texas voters have a say in electing the justices who decide cases affecting the State’s interests[.]’”
Perhaps most interesting from our standpoint is Chief Justice Brister’s statement that “constitutional standing cannot be created by statute … because standing, as that term is properly used, implicates subject-matter jurisdiction, and ‘a court without subject-matter jurisdiction cannot decide the case at all.’’ As to the qui tam relator’s argument that SCOTUS has upheld the federal version of the Medicaid fraud statute’s qui tam provision as a constitutional “assignment of the Government’s damages claim,” the Chief pointed out that while that might be acceptable for compensatory damages claims does not work for punitive claims. And the civil remedies provided by the Texas statute “are entirely punitive … ‘imposing monetary liability far surpassing the amount of Medicaid funds the State may have actually expended due to an lawful act,’ and regardless of whether there was any actual damage to the State or any beneficiary.” In addition to that, “nothing in the Constitution authorizes the Legislature to delegate to private parties the State’s power to impose civil penalties without the participation of any elected officials.”
For what it’s worth, we cannot praise Chief Justice Brister highly enough for calling out the elephant in the room. For years we have been hollering about commercial speculators, using our courts purely for private profit. When you add Justices Young and Sullivan to the mix, it appears that this outrage has finally surfaced.
