Today’s guest post, about a bottom-ten RICO third-party payor action from (no surprise) the Ninth Circuit, is by long-time friend of the blog (and blogger in his own right), Jonah M. Knobler, of Patterson Belknap. We named one similar case, Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc., 712 F.3d
We all know the phrase “the elephant in the room.” There are some things that do not get mentioned that are so obviously relevant that silence about them, or willful ignorance of them, can be humorous or frustrating. Based on our not-so-extensive research, we see that the origin of the fairly widespread use of this
Private plaintiffs love to scream “fraud on the FDA”! Agency fraud is their magic potion for dissolving any FDA action that they don’t like. Just assert that the FDA was bamboozled and invite some jury somewhere to ignore what the FDA actually did. Unfortunately for the other side, Buckman Co. v. Plaintiffs Legal Committee,
Not too long ago we read a non-drug/device decision, Hale v. State Farm Mutual Automobile Insurance Co., 2018 WL 3241971 (S.D. Ill. July 3, 2018), which left us shaking our heads. How this suit could not be a blatant First Amendment violation is beyond us.
But that’s not really the point of this post.
We’ll be hitting all the Presidents’ Day sales today, but something tells me we’ll be disappointed because we won’t be able to buy, beg, borrow, or steal a new one. So we keep trying.
With plaintiffs desperate to find some way to continue pursuing aggravated, aggregated product liability litigation in their favorite venues after Daimler
We have written extensively on the travesty of the Neurontin trilogy (like here and here) and noted how the plaintiffs’ efforts to fit cases based on alleged off-label promotion of the prescription SSRIs Celexa and Lexapro into the same rubric have not been as successful. Today’s case addresses what we understand to be some
If you want to insult and annoy someone, consider suing them under the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. section 1964. That law is charmingly known as RICO, in an allusion to the big bad in the great 1931 gangster film Little Caesar, played by Edward G. Robinson at his most
Imagine a conspiracy so vast that it includes not only your usual plaintiff-side fantasy of the FDA conspiring with a drug company, but also high FDA officials, President Obama, Robert Mercer (noted Trump supporter and reputed Breitbart financier), a number of other investors, and just for good measure President and Hillary Clinton.
Larry Klaman
July in D.C. is hot and sticky. When scorching day follows scorching day, area residents look forward to evening thunderstorms, not just to water otherwise thirsty lawns and gardens but to cool things down. Lightning can be frightening—that the words almost rhyme is no accident—but it seems to always accompany our rain during the swampiest part of our summers.
The decision in Sidney Hillman Health Ctr. v. Abbott Labs., No. 13 C 5865, 2016 U.S. Dist. LEXIS 84662 (N.D. Ill. June 29, 2016), is not as dramatic as a flash of lightning or as stirring as a thunderclap. To us, though, it provides some welcome relief and suggests that a larger storm is coming for cases like this. (Like awkward cocktail party banter, we will keep our discussion of weather brief.) Hillman is one of many third payor cases based on alleged off-label promotion of a prescription drug. It is of the variant where benefit plans principally used RICO as the vehicle to try to get damages for past payments for members’ prescriptions for unapproved indications. We sometimes lump such cases together with those using the False Claims Act or various state fraud statutes to try to recover for amounts paid as a result of allegedly improper marketing, often with large fines or a damages multiplier in the mix. Sometimes these cases are class actions on behalf of lots of payors around the country. Sometimes they are pursued by governmental entities, which occasionally outsource the work to contingency fee lawyers. In their various forms, these TPP cases have caught our attention. We have been particular perturbed by some courts’ blithe acceptance of collective proof of causation in these cases, the point of which is to lump together as many purported actionable claims or implicated payments as possible without having to generate proof as to why each prescription was written or paid. We have also questioned whether statutes like RICO (enacted to combat organized crime) or the False Claims Act (enacted to combat war profiteering) are being stretched beyond their legitimate bounds to accommodate these cases, simply because the defendants are unpopular or the coffers of the governmental or benefit plan plaintiffs need an infusion of cash.
Many of these cases have also been predicated on the idea that promotion of off-label use is inherently wrong. Over the last year or so, largely because of Amarin, the underpinnings of that idea have been eroding fast. The First Amendment’s prohibition on laws “abridging the freedom of speech” applies to commercial speech, including commercial speech by and on behalf of drug companies about uses of their products that are off-label. If truthful statements about unapproved uses of the drug—like those that accurately represent the information on risks and benefits and make clear what the label says—are protected, then civil liability should not be based on them. That would go for cases under the FCA, RICO, or various state laws—with the Fourteenth Amendment making the First Amendment applicable to states. To our eyes, some of the notorious cases imposing massive liability for alleged off-label promotion of prescription drugs seem to have relied in large part on vilifying truthful off-label promotion. (Keep in mind that even pre-Amarin FDA regs allowed drug companies to provide information about off-label uses under certain circumstances without it being considered “promotion.”) So, a First Amendment storm is brewing for these cases, both in terms of the precedential value of decisions in cases that did not differentiate between truthful and false statements about off-label uses and the viability of complaints drafted with the expectation that no such differentiation would be necessary.
This brings us back to Hillman, which had an interesting litigation history of its own. It followed FCA and related actions based on alleged off-label promotion by the manufacturer of a prescription seizure and migraine medication. A large settlement of civil and criminal claims, with attendant press coverage, followed. The Hillman plaintiffs filed a putative class action over a year later, alleging overpayments for off-label prescriptions between 1998 and 2012. The trial court dismissed on statute of limitations and the Seventh Circuit reversed. The plaintiffs amended and the defendants moved to dismiss. Along the way, there have been a number of product liability claims with the same drug, complete with off-label promotion allegations and preemption of some warnings claims. (As an aside, it would be interesting if some of the alleged misrepresentations about safety in the Hillman complaint were about the same issues about which it would have been impossible for the defendants to warn. There is no preemption for RICO claims, because preemption only applies to state law, but it should be hard to misrepresent a drug’s safety by accurately repeating the contents of a label that could not have been changed as to a particular risk.)
Continue Reading Another Off-Label Promotion Third Party Payor Case Lacks Causation
Is there a more misused statute than RICO? Or one that more convincingly shows the weakness of the textualist position, which wads up any evidence of legislative intent and tosses it into the trash bin? RICO was clearly intended to address organized crime, but its broad and vague language has been held to reach all sorts of commercial disputes and garden variety litigations where no hit-men, shake-down schemes, or cement shoes are in sight. It’s easy to see why plaintiff lawyers love to lob RICO claims into their complaints – getting treble damages for labeling your opponent a racketeer is a good business model. We’ve said all this before, of course.
The godfather of RICO was Notre Dame Law Professor G. Robert Blakey. While in law school, Blakey authored a law review note about the inability of prosecutors to affix criminal liability to the attendees of the notorious Apalachin organized crime meeting in 1957. Later, he worked on a bill that would take care of that problem. President Nixon signed RICO into law in 1970 and, like a lot of what Nixon did, it created more problems than it solved. Another law came into play – the law of unintended consequences. The malleability of RICO didn’t merely suit plaintiff lawyers down to the ground; Blakey also seemed to enjoy the surprising scope and relevance of his baby.
When we were a young litigator we attended an all-day CLE conference in NYC on business litigation. The moderator was a sharp litigator from the Mudge Rose firm named Jed Rakoff. He is now one of the two or three smartest and scariest judges in the country. The star speaker was Blakey, who held forth on how RICO was the cure for whatever ailed any wannabe plaintiff. He probably never envisioned that RICO would result in his occupation of a Waldorf Astoria podium in front of 300 white-shoed lawyers. But there he was. The audience peppered Blakey with questions about the reach of RICO. Would X fall within RICO’s grasp? Yup. Would Y? Of course. We went up to Blakey after the talk and poured into his ear a complex fact scenario we were defending. Is that a RICO violation? Sure.
Yikes.
Blakey must have been ecstatic about what happened in the District of Massachusetts Neurontin litigation, where allegations of off-label promotion and other marketing malfeasances supported RICO claims and, consequently, huge settlements. RICO had been stretched up to (we would say past) its breaking point on issues such as causation, injury, and damages. It was, in our judgment, one of this country’s enormous wrong turns in drug and device litigation. D. Mass. prosecutors showed up at CLE conferences, crowing about their success and ominously hinting at more to come. But their legal theories rang hollow and the showmanship looked cheesy. Having prosecuted federal cases ourselves, we have a knee jerk reflex to assume the good faith and validity of USAO actions and policies. Not so here. It smelled like overreaching. We think history will vindicate our position. It is not as if the history of Mass. litigation is a history of getting things right. Ever heard of the Salem Witch trials? Lizzy Borden? Roberts v. Boston (which invented the separate but equal doctrine later embraced in Plessy v. Ferguson)? Sacco and Vanzetti? A Civil Action? Reckis v. Johnson & Johnson (a Mass. Supreme Court decision that we listed as the single worst drug/device decision of 2015)? Anyway, maybe even the folks in Boston are starting to rethink the use of RICO to police the marketing of medicines.
Continue Reading D. Mass. (!) Refuses to Certify Celexa/Lexapro RICO Class Action