Pfizer Inc. and Tris Pharma, Inc. v. the State of Texas and Tarik Ahmed

Court of Appeals of Texas·Decided March 17, 2025·No. 15-25-00021-CV·Published

Opinion

ACCEPTED

15-25-00021-CV

FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS

3/17/2025 9:24 PM

No. 15-25-00021-CV CHRISTOPHER A. PRINE __________________________________________________________________ CLERK FILED IN

In the Fifteenth Court of Appeals 15th COURT OF APPEALS AUSTIN, TEXAS

Austin, Texas 3/17/2025 9:24:36 PM

CHRISTOPHER A. PRINE

Clerk

PFIZER INC. and TRIS PHARMA, INC., Petitioners/Defendants,

v.

The STATE OF TEXAS and TARIK AHMED, Respondents/Plaintiffs.

Permissive appeal from the 71st Judicial District Court, Harrison County, Texas

Reply In Support of Defendants’ Petition for Permission to Appeal

Edward D. Burbach (No. 03355250) Harry “Gil” Gillam, Jr. (No. 07921800)

Stacy R. Obenhaus (No. 15161570) Tom Gorham (No. 24012715)

600 Congress, Suite 2900 303 S. Washington Ave.

Austin, Texas 78701 Marshall, Texas 75670 eburbach@foley.com gil@gillamsmithlaw.com sobenhaus@foley.com tom@gillamsmithlaw.com Tel: 512.542.7070 Tel: 903.934.8450 Samantha Barrett Badlam (Pro hac pending) William E. Lawler III (Pro hac pending)

Stefan P. Schropp (Pro hac pending) 1825 Eye St. N.W.

2099 Pennsylvania Ave., N.W. Washington, D.C. 20006-5403 Washington, D.C. 20006-6807 william.lawler@blankrome.com samantha.badlam@ropesgray.com Tel: 215.569.5449 stefan.schropp@ropesgray.com Counsel for Tris Pharma, Inc.

Tel: 202.508.4734 George Valton (“Val”) Jones (No. 10888050)

109 West Austin St.

Marshall, Texas 75670-3340 val@valjoneslaw.com Tel: 903.927.2220 Counsel for Pfizer Inc.

TABLE OF CONTENTS

ARGUMENT .............................................................................................................1 I. THE ORDER SATISFIES SECTION 51.014(D)’S REQUIREMENTS. ......................................................................................... 1 A. The Response Concedes that Defendants’ Appeal Presents a Controlling Question of Law. ................................................................1 B. The Controlling Question of Law for Which Substantial Ground for Difference of Opinion Exists Remains Consistent with What the Trial Court Certified for Interlocutory Appeal ...............................3 C. LabCorp Reinforced the Fact that Substantial Ground for Difference of Opinion Exists. ................................................................6 D. Texas Law Requires Only That an Interlocutory Appeal Narrow the Claims or Issues in Dispute In Order to Materially Advance the Litigation, Which This Appeal Easily Accomplishes.......................7 II. THE SECOND AMENDED PETITION NEITHER MOOTS THIS APPEAL NOR ALTERS THE NATURE OF THE ORDER FROM WHICH APPEAL IS SOUGHT. ..................................................................... 9 CONCLUSION ........................................................................................................10

INDEX OF AUTHORITIES

Cases Page(s)

City of Houston v. Houston Pro. Fire Fighters’ Ass’n, Local 341, 626 S.W.3d 1, 23 (Tex. App.—Houston [14th Dist.] 2021), aff’d, 664 S.W.3d 790 (Tex. 2023) ....................................................................................... 4

City of San Antonio v. Spectrum Gulf Coast, LLC, No. 13-23-00342-CV, 2024 WL 3199166 (Tex. App.—Corpus Christi-

Edinburg June 27, 2024) ....................................................................................... 7

Enter. Prods. Partners v. Mitchell, 340 S.W.3d 476 (Tex. App.—Houston [1st Dist.] 2011, pet. dism’d) ................. 8

Gulf Coast Asphalt Co., v. Lloyd, 457 S.W.3d 539, 544 (Tex. App.—Houston [14th Dist.] 2015, no pet.). ........ 1, 3

Kearns v. Heller, No. 08-23-00300-CV, 2024 WL 3049471 (Tex. App.—El Paso June 18, 2024, pet. filed) .....................................................................................................9

Lindsey v. Montgomery Cent. Appraisal Dist., No. 09-17-00321-CV, 2019 WL 2039874 (Tex. App.—Beaumont May 9, 2019, no pet.) .......................................................................................... 10

Malouf v. State ex rel. Ellis, 694 S.W.3d 712, 721 (Tex. 2024) ....................................................................3, 5

State v. Lab’y Corp. of Am. Holdings, No. 01-23-00043-CV, 2024 WL 5249087 (Tex. App.—Houston [1st.

Dist.] Dec. 31, 2024) ............................................................................................. 6

Sabre Travel Int’l, Ltd. v. Deutsche Lufthansa AG, 567 S.W.3d 725, 736 (Tex. 2019) ........................................................................ 7

Other Authorities Tex. Hum. Res. Code § 36.002 .........................................................................passim Tex. Hum. Res. Code § 36.0011 ................................................................................ 2 Tex. R. App. P. 29.5 ...................................................................................................9

Tex. R. Civ. P. 63 .....................................................................................................10 Tex. R. Civ. P. 65 .....................................................................................................10

ARGUMENT

The question of whether Section 36.002(7)(C) of the Texas Medicaid Fraud Prevention Act (“TMFPA”) requires materiality readily satisfies the permissive interlocutory appeal requirements. Plaintiffs’ response provides no persuasive argument to the contrary. Instead, it either avoids the substance of Defendants’ arguments in favor of technicalities or, when it does engage, bolsters the case for interlocutory review. The Court should therefore accept Defendants’ appeal and address this critical and unresolved question of Texas law. I. THE ORDER SATISFIES SECTION 51.014(D)’S REQUIREMENTS.

A. The Response Concedes that Defendants’ Appeal Presents a Controlling Question of Law.

Plaintiffs effectively concede—as they must—that materiality presents a controlling question of law in this case. Faced with that reality, Plaintiffs instead mount two arguments that only serve to underscore the good-faith nature of this dispute; first by highlighting a scienter requirement that does nothing to obviate the strict liability standard Plaintiffs would impose on the type of conduct prohibited by the TMFPA and, second, by noting that they have not pleaded materiality because they believe it is not required under Section 36.002(7)(C). Resp. 11–12. Both arguments illustrate that the parties’ disagreement is a “legitimate” one and the importance of resolving the critical question of materiality. See Gulf Coast Asphalt Co., v. Lloyd, 457 S.W.3d 539, 544 (Tex. App.—Houston [14th Dist.] 2015, no pet.).

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Pfizer Inc. and Tris Pharma, Inc. v. the State of Texas and Tarik Ahmed, (Tex. Ct. App. 2025).

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