Justice James Sullivan
Justice Evan Young
In a concurring opinion on the denial of mandamus requested by a defendant in a Medicaid fraud qui tam action, Justices Evan Young and James Sullivan have invited the 15th Court of Appeals to consider the constitutionality of qui tam litigation before SCOTX has to.
In re Novartis Corporation (No. 24-0239; October 24, 2025) arose from a qui tam action brought by a private party, Health Selection Group, LLC (HSG), 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.
The Court likewise denied Novartis’s petition. In a concurring opinion, Justices Young and Sullivan acknowledged that since the 15th Court of Appeals will have jurisdiction over the appeal, the Court acted properly in deferring until it had the benefit of that court’s ruling. As to Novartis’s standing argument, the concurring justices observed that any analysis should begin with Justice Scalia’s opinion in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000), which upheld the Article III standing of a qui tam relator under the federal False Claims Act. There the high court held that an assignee of the government’s damages claim can have standing “to assert the injury in fact suffered by the assignor.” But, as the justices pointed out, the Texas statute “‘employs a penalty scheme and is not an action for the recovery of damages,’ with money being ‘exacted as punishment for either a wrong to the state or a civil wrong (as distinguished from compensation for an injured party’s loss.” Consequently, the justices queried “[h]ow can it be said, given these statutory differences, that the State has some injury in fact (as opposed to an injury in law) that it could assign to a qui tam relator like HSG?”
Novartis also raised a constitutional question of whether private relators may represent the government in litigation to begin with. In several cases SCOTUS Justices Thomas, Kavanaugh, and Barrett have expressed doubts that qui tam provisions comport with Article II separation of powers. Pointing to the Texas Constitution, art. V, § 21, which assigns the authority to represent the state in court to the attorney general and county and district attorneys, Justices Young and Sullivan opined that “[i]f 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.”
That statewide court is, in the first instance, the 15th, which asserted jurisdiction over qui tam litigation in In re Sanofi-Aventis U.S. LLC, 711 S.W.3d 732 (Tex. App.—15th Dist. 2025, orig. proceeding). That court rejected a similar qui tam relator’s argument that since the state did not intervene in the action, the 15th had no jurisdiction. The court reasoned that “even when the State declines to intervene, [the relator] steps into the State’s shoes” and represents the state’s interests (not to mention that the state gets most of the proceeds from the suit). It would produce an “absurd result” if the state could divest the 15th court of jurisdiction simply by withdrawing its intervention as soon as a party sought mandamus relief. Justices Young and Sullivan welcomed the prospect of full consideration of the constitutional issues before SCOTX was called upon to weigh in. They also stated that there appeared to be no reason Novartis couldn’t petition the 15th court of mandamus. In fact, “allowing Novartis to petition the Fifteenth Court for mandamus would not risk re-urged mandamus in other cases.” That court was created after Novartis sought mandamus from the Texarkana court, which didn’t explain why Novartis’s petition “lacked merit.” “It might make sense,” therefore, 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.”
We should point out that the qui tam relator in this case, Health Selection Group, appears to be a vehicle for bringing qui tam lawsuits. Represented by Mark Lanier, HSG previously filed a False Claims Act suit against Novartis and several other health care defendants in the Eastern District of Texas. Filed in 2018, that case was terminated in 2020.
