Takeda Pharmaceutical Company Limited, a Japanese Corporation, et al. v. Painters & Allied Trades District Council 82 Health Care Fund, third-party healthcare payor fund, et al.
ClassAction
Whether a class action under Rule 23(b)(3) can be certified for a RICO claim when individual plaintiffs cannot demonstrate uniform injury or causation as required by the Supreme Court's precedents
No question identified. : 2. This case concerns the certification, under Federal Rule of Civil Procedure 23(b)(3), of an allegedly fraud class. In 1999, Applicant Takeda obtained approval from the Food and Drug Administration (“FDA”) for Actos, a treatment for type-2 diabetes. D.Ct.Dkt.127 at 8, 11. Since its approval, Actos’ FDA-approved label has disclosed a potential link between use of the treatment and an increased risk of bladder cancer. See D.Ct.Dkt.247 at 5-6. In 2010, the FDA issued a “Drug Safety Communication” that again highlighted this potential connection, but stated that, “[a]t this time, FDA has not concluded that Actos increases the risk of bladder cancer.” Id. (emphasis omitted). A year later, the FDA approved a new label for Actos that reflected new data available, and it once again noted that, while recent studies suggested a potential risk of bladder cancer, there was “insufficient data” to definitively establish a causal relationship between the two. Id. at 6. 3. In 2014, respondent Painters & Allied Trades District Council, 82 Health Care Fund (“Painters”) brought this RICO action seeking billions in damages for Applicants’ supposed concealment of information about Actos’ side effects. D.Ct.Dkt.1. Painters does not allege that it was harmed by taking Actos. Instead, it posits that Applicants knew about the risks that were “revealed” in 2010 but hid them from the public, thereby encouraging millions of physicians across the nation to overprescribe Actos—and, in turn, causing thousands of third-party payors (“TPPs”) like Painters to reimburse those prescriptions. See D.Ct.Dkt.229 at 22-28. Painters accordingly sought to certify a class comprising all TPPs that reimbursed five or more Actos prescriptions from 1999 to 2010. Id. at 3-4. 4. Under basic Rule 23 principles and this Court’s caselaw, it should have been easy to conclude that this is not the stuff of class-wide litigation. For one thing, both Article III and RICO require that each plaintiff seeking to recover individual damages show that she has suffered an injury. See TransUnion LLC v. Ramirez, 594 USS. 4138, 431 (2021); 18 U.S.C. §1964(c). This Court, too, has recognized many times that a plaintiff seeking class certification must show that the class as a whole “suffer[ed] the same injury.” E.g., E. Tex. Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977). Painters nonetheless acknowledges that at least some, and potentially many, class members suffered no injury at all, much less the same injury as their fellow travelers. D.Ct.Dkt.247 at 11. And the fact that class members could have avoided injury in various ways—e.g., because physicians would have prescribed Actos even if “fully” informed of its risks—only drives the point home. See id. 5. In a similar vein, this Court’s decision in Wal-Mart Stores, Inc. v. Dukes warns courts against amalgamating highly individualized actions that cannot be adjudicated on a class-wide basis except via “[t]rial by [flormula.” 564 U.S. 338, 367 (2011). That, however, is precisely what Painters proposed here. As mentioned, RICO requires a showing that the individual seeking to recover suffered injury to their “business or property,” and that such injury came about “by reason of” the alleged misconduct. 18 U.S.C. §1964(c). This Court has further held that causation requires a RICO plaintiff to show that “someone relied on the defendant’s Bridge v. Phx. Bond & Indem. Co., 553 U.S. 639, 658 (2008). Given the highly personal nature of these elements, fraud claims like the ones asserted here are generally “unsuited for treatment as a class action.” Fed. R. Civ. Pro. 23, advisory committee’s note to 1966 amendments. 6. Recognizing that it would be impossible to prove actual injury and causation for each class member without needing thousands of mini trials, Painters proposed to square that circle through an expert report purporting to show that TPPs that reimbursed five or more “independent” Actos presc