H. Sherman “Tiger” Joyce, president of the American Tort Reform Association, had a column on WashingtonTimes.com yesterday (link here) criticizing the Third Circuit’s 2015 ruling in In re Avandia Marketing. Joyce argues that RICO suits challenging drug-company marketing such as Avandia Marketing are an “important and obvious misuse of RICO” and he urges the Supreme Court to review the case.
Of note to Third Circuit readers:
The good news is that most courts have seen through the lie. * * *
But in Philadelphia, once criticized by The Wall Street Journal as “The City of Unbrotherly Torts” and twice in the past six years ranked by my organization as the worst of the nation’s civil court “Judicial Hellholes,” a federal trial judge denied GlaxoSmithKline’s motion to dismiss the dubious fraud claims of three labor union-affiliated health insurers. And splitting with three other circuit courts, the U.S. Third Circuit Court of Appeals recently upheld the trial court’s decision to proceed with the case.
So GSK has appealed again to the U.S. Supreme Court, which now has a chance to clarify the law and end this pernicious new line of legal extortion that will only exert more upward pressure on drug prices as still higher litigation costs are passed on to consumers. Justices are expected to meet June 2 to decide on additional cases they’ll hear next term, and everyone concerned about the affordability of medicines should hope they agree to hear this appeal.
If the Third Circuit’s decision is allowed to stand, opportunistic personal injury lawyers, their third-party payer clients and even some politically ambitious state attorneys general will be encouraged to misuse frivolous RICO lawsuits every time a pharmaceutical company changes warning label language in the interest of public safety.
The circuit court’s loose application of well-settled RICO causation and injury principles, and its disregard of general pleading standards under the Supreme Court’s Twombly and Iqbal decisions, can only invite third-party payers to seek windfalls — even if they never directly relied on a drug company’s allegedly fraudulent marketing or suffered an injury.
So Ambro, Scirica, and Roth, plus Rufe, all got bamboozled into loosely applying RICO and disregarding general pleading standards, huh? Color me skeptical.