Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Co., No. 18-55588 (9th Cir. 2019)Annotate this Case
The Ninth Circuit reversed the district court's dismissal of civil Racketeer Influenced and Corrupt Organizations Act (RICO) claims based on lack of RICO standing in a putative class action brought against pharmaceutical companies. Plaintiffs filed suit alleging that the companies refused to change the warning label of their drug Actos or otherwise inform the public after they learned that the drug increased a patient’s risk of developing bladder cancer.
The panel held that patients and health insurance companies who reimbursed patients adequately alleged the required element of proximate cause where they alleged that, but for defendant's omitted mention of a drug's known safety risk, they would not have paid for the drug. The panel agreed with the First and Third Circuits that plaintiffs' damages were not too far removed from defendants' alleged omissions and misrepresentations to satisfy RICO's proximate cause requirement. In this case, plaintiffs sufficiently alleged a direct relationship, and the Holmes factors weighed in favor of permitting their RICO claims to proceed. The panel explained that, although prescribing physicians served as intermediaries between defendants' fraudulent omission of Actos's risk of causing bladder cancer and plaintiffs' payments for the drug, prescribing physicians did not constitute an intervening cause to cut off the chain of proximate causation. The panel also held that plaintiffs have adequately alleged the reliance necessary to satisfy RICO's proximate cause requirement.