What do we hate more — cases that go against us, or 291-page decisions that we’re compelled to read to stay abreast of our field and to share with you in blog posts?
Today, it doesn’t matter. We get the worst of both worlds.
When the Supreme Court decided Bridge v. Phoenix Bond & Indemnity Co., No. 07-210, 2008 WL 2329761 (U.S. June 9, 2008), we thought about publishing a post on it.
Bridge was a RICO case that arose far from the drug and device context, but it held “that a plaintiff asserting a RICO claim predicated on mail fraud need not show, either as an element of its claim or as a prerequisite to establishing proximate causation, that it relied on the defendant’s alleged misrepresentations.” The plaintiff’s direct reliance on a misrepresentation might not be necessary, the Supreme Court suggested, because reliance by some other party might suffice.
That doesn’t make much of a difference in run-of-the-mill product liability cases, but it will plainly trigger much debate in cases where third-party payors (typically insurance carriers) seek to recover from drug manufacturers amounts the insurers spent buying drugs. In those cases, the insurer plainly didn’t rely on anything the drug manufacturer said, since the insurer did not make the decision to prescribe the drug. The treating physician made that decision.
In light of Bridge, can third-party payors now recover from drug companies under RICO because, although the insurers didn’t rely on any alleged misrepresentation about the drug, the prescribing physicians did?
We think not, for a host of reasons.
But, in the 291-page [!] “discussion draft” of a class certification order handed down last week in the Zyprexa litigation, Judge Weinstein mused to the contrary. See In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, slip op. (E.D.N.Y. July 2, 2008) (here’s a link to the Pharmalot post about the case, which in turn links to all three of the hundred-page chunks of this puppy).
At pages 259 to 260 (yeah, we read the whole blasted thing — you owe us one), Judge Weinstein found “ample evidence that fraud was directed through mailings and otherwise at doctors who relied, causing damages in overpayments by plaintiffs.” Judge Weinstein thus proposes to certify a class of third-party payors.
Before Judge Weinstein enters his final class certification decision, however, he’ll hold another hearing.
So there’s more to come — but we sure hope it’s a little bit shorter.