The NAM filed an amicus brief in support of a petition for certiorari to review a Ninth Circuit
ruling that threatens to expand the use of civil RICO claims.
The case arose as a putative class action brought by Actos patients and third-party payors (TPP) alleging that they would not have purchased Actos had they known about the increased risk of bladder cancer. Specifically, they allege that Takeda, which manufactures Actos, and Lilly, which previously co-marketed it, conspired to commit mail and wire fraud under RICO by intentionally misleading physicians, consumers, and TPPs to believe that Actos did not increase a person’s risk of developing bladder cancer. Notably, both the patient plaintiffs and the TPP’s insureds used Actos safely and without any adverse side effects.
Relying on Seventh Circuit precedent, the district court dismissed the RICO claims with prejudice based on lack of proximate cause, as well as the state law claims for similar reasons. The Ninth Circuit reversed, fully acknowledging the “apparent circuit split among four of [its] sister circuits” regarding the proximate cause issue but concluded that no matter the roles of independent actors in causing each plaintiff’s claimed injury, it was “foreseeable” that the conduct alleged would increase drug sales overall. On the standing issue, the Ninth Circuit, following its own established circuit precedent, by holding that anyone who pays for a product has standing to sue for a full refund merely by alleging that the payment would not have been made if a risk or defect had been disclosed.
The NAM and ATRA filed an amicus brief arguing that the pharmaceutical industry, and manufacturing in general, should not be subjected to abusive litigation that hampers their ability to innovate and grow and that a sound and fair legal system requires remedies to be focused on persons with direct, actual harms, particularly the RICO statute because of its powerful and potentially crippling treble damages remedy. Unfortunately, on June 8, 2020, the Court denied cert.