# In re Novartis Pharms. Corp. Supreme Court of Texas, No. 26-0467 **In re Novartis Pharms. Corp., No. 26-0467, is before the Supreme Court of Texas. Key issue: May a qui tam relator sue under the Texas Medicaid Fraud Prevention Act when it is undisputed that the relator itself suffered no injury, or does it lack constitutional standing, and can it rely on the State's injury as an assignee?** Practice areas: fraud, texas constitution, civil procedure ## Key issues - May a qui tam relator sue under the Texas Medicaid Fraud Prevention Act when it is undisputed that the relator itself suffered no injury, or does it lack constitutional standing, and can it rely on the State's injury as an assignee? - Does the Act's qui tam provision, which lets a private party proceed for the State without the State's participation, violate the separation of powers, and is mandamus an available remedy or is an appeal after final judgment adequate? ## Factual History Health Selection Group, LLC (HSG) is an affiliate of National Health Care Analysis Group, a New Jersey research organization that Novartis says was created to monetize qui tam statutes by mining public Medicaid and Medicare data and forming entities like HSG to sue drug makers, typically over free nurse-educator and reimbursement-support programs it calls illegal kickbacks (Petition for Writ of Mandamus filed (Relator), PDF pp. 20-21). Novartis says the federal government sought dismissal of materially identical suits, and that after HSG sued Novartis AG in federal court in April 2018 and the federal government moved to dismiss, HSG voluntarily dismissed that suit and in May 2020 filed this one under seal in Travis County under Human Resources Code section 36.101 (Petition for Writ of Mandamus filed (Relator), PDF pp. 21-24). The State declined to intervene on October 1, 2020, and the case lay dormant for years until it was transferred to the 71st District Court in Harrison County, where in April 2023 HSG amended to substitute Novartis Pharmaceuticals Corporation as defendant (Petition for Writ of Mandamus filed (Relator), PDF p. 24). HSG says it sues as an assignee of the State's claim, and the State says the Act keeps the Attorney General in ultimate control of any qui tam suit (Response to Petition for Writ of Mandamus Filed (State), PDF p. 2; Response to Petition for Writ of Mandamus Filed (Health Selection), PDF pp. 4-6). ## Procedural History On September 15, 2023 Novartis filed a plea to the jurisdiction and a Rule 91a motion to dismiss for lack of constitutional standing and on separation-of-powers grounds, and the district court summarily denied it over the opposition of HSG and the State (Petition for Writ of Mandamus filed (Relator), PDF pp. 24-25). The Sixth Court of Appeals denied mandamus on February 2, 2024, this Court granted a temporary stay on August 30, 2024 and ordered briefing, and on October 24, 2025 it denied the petition with a statement by Justices Young and Sullivan calling the issues "weighty" and suggesting the Fifteenth Court of Appeals hear the petition first (Petition for Writ of Mandamus filed (Relator), PDF pp. 25-26). The Fifteenth Court denied mandamus on April 30, 2026 because Novartis has an adequate remedy by appeal, over a dissent by Chief Justice Brister who would have granted relief on both constitutional grounds (Petition for Writ of Mandamus filed (Relator), PDF pp. 26-30). Novartis filed this petition on May 8, 2026, and the Court set the case for oral argument on September 4, 2026 and ordered merits briefing. ## Issues Presented - Novartis (Petition for Writ of Mandamus filed (Relator), PDF p. 17): whether courts have subject-matter jurisdiction over a statutory cause of action when it is undisputed that the plaintiff itself suffered no injury; whether the Texas Medicaid Fraud Prevention Act violates the separation of powers by allowing private individuals to initiate and maintain a civil action for the State; and whether mandamus relief is appropriate. - The State and HSG (Response to Petition for Writ of Mandamus Filed (Health Selection), PDF pp. 3-6; Response to Petition for Writ of Mandamus Filed (State), PDF p. 2): whether Novartis has an adequate remedy by appeal, whether HSG has standing as an assignee of the State's claim, and whether the Act preserves the Attorney General's control. ## Standard(s) of Review Novartis says the mandamus standard is flexible and considers factors beyond cost and delay, as Chief Justice Brister explained, and the State and HSG respond that an appellate remedy is not inadequate merely because of the cost or delay of trial and appeal (Petition for Writ of Mandamus filed (Relator), PDF pp. 26-28; Response to Petition for Writ of Mandamus Filed (Health Selection), PDF p. 3). ## Legal Arguments **Whether mandamus is available.** **Novartis (Relator):** Mandamus is appropriate because the case is akin to a mass tort that will waste enormous judicial and party resources, and because the standing and separation-of-powers challenges, if right, deprive Texas courts of subject-matter jurisdiction, which should be decided now and not after years of discovery (Petition for Writ of Mandamus filed (Relator), PDF pp. 28-30, 32-34). In reply, Novartis says the Fifteenth Court focused only on cost and delay and that the Court should not delay this resolution (Reply to Petition for Writ of Mandamus (Relator), PDF p. 8; Petition for Writ of Mandamus filed (Relator), PDF p. 6). **The State and HSG (Real Parties in Interest):** The Court denied substantively identical arguments less than a year ago, Novartis can appeal after final judgment, and this is a two-party case with one injured party, not a mass tort, with statistical sampling available to reduce the burden of trial (Response to Petition for Writ of Mandamus Filed (State), PDF pp. 2, 8; Response to Petition for Writ of Mandamus Filed (Health Selection), PDF pp. 3-4). **Whether HSG has constitutional standing.** **Novartis (Relator):** A plaintiff must plead that it itself was personally injured, HSG concedes no injury of its own and sues "as a volunteer," it cannot sue as the State's assignee or representative, and statutory standing does not displace constitutional standing (Petition for Writ of Mandamus filed (Relator), PDF pp. 5, 35-40; Reply to Petition for Writ of Mandamus (Relator), PDF pp. 11-15). **The State and HSG (Real Parties in Interest):** A qui tam relator is a partial assignee of the State's claim and has standing to assert the State's injury, as the U.S. Supreme Court held in *Vermont Agency v. Stevens* for the federal False Claims Act, and in any event may represent the State as its statutory agent, which Novartis did not challenge below (Response to Petition for Writ of Mandamus Filed (State), PDF pp. 12-16; Response to Petition for Writ of Mandamus Filed (Health Selection), PDF pp. 4-5). **Whether the qui tam provisions violate the separation of powers.** **Novartis (Relator):** Article IV, section 22 and Article V, section 21 of the Constitution assign the authority to sue for the State exclusively to the Attorney General and district and county attorneys, and the Act's provision allowing relators to proceed without the State's participation shifts that authority to private parties (Petition for Writ of Mandamus filed (Relator), PDF pp. 5, 41-48; Reply to Petition for Writ of Mandamus (Relator), PDF pp. 16-20). **The State and HSG (Real Parties in Interest):** The Act expressly lets the Attorney General control all Medicaid fraud litigation, reject relator assistance and dismiss or settle over a relator's objection, and the constitutional challenge turns on how the Attorney General's control works in practice, which a mature trial record would show; if section 36.104(b-1) unduly hinders intervention the Court can sever it (Response to Petition for Writ of Mandamus Filed (State), PDF pp. 18-21; Response to Petition for Writ of Mandamus Filed (Health Selection), PDF pp. 3-6). ## Stated Reasons the Court Should Take the Case Novartis argued that this Court will have to decide the "weighty" and "important" standing and separation-of-powers questions that Justices Young and Sullivan identified and that the Fifteenth Court's majority also called of significant importance, so there is no reason to delay resolution (Petition for Writ of Mandamus filed (Relator), PDF pp. 2, 5-6). ## Practice Area Tags fraud, texas-constitution, civil-procedure ## Procedural Posture/Vehicle Original proceeding for writ of mandamus from the Fifteenth Court of Appeals' denial of mandamus on the denial of a plea to the jurisdiction and Rule 91a motion; argument set September 4, 2026. Oral argument: February 11, 2027. ## Amicus Involvement None noted --- Source: The SCOTX Report, https://scotxreport.com/cases/26-0467. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.