Ironworkers Local Union 68 v. Astrazeneca Pharmaceuticals, LP
2011 U.S. App. LEXIS 4960
| 11th Cir. | 2011Background
- Health insurers allege AstraZeneca's off-label marketing of Seroquel caused insurers to pay for prescriptions that were not medically necessary.
- Cases are class actions by labor-union health plans and one individual enrollee, Cheryl Martin, seeking treble damages, consumer protection, and common-law relief.
- Seven-count consolidated complaint includes two RICO counts and seven state-law claims; district court dismissed under Rule 12(b)(6) for lack of proximate causation.
- District court found no direct link between misrepresentations and economic injury due to physicians' independent medical judgment and complex damages.
- Eleventh Circuit affirms, holding economic injury requires a medically unnecessary or inappropriate prescription; insurer premiums and actuarial risk do not show plausible injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proximate causation and injury in RICO claim | Insurers allege direct link between fraud and monetary loss. | Causation too indirect; physician judgment and other factors break chain. | Economic injury not plausibly shown; causation insufficient. |
| Economic injury under state-law claims | Fraud caused ascertainable losses through overpayment for off-label Seroquel. | Premiums and actuarial pricing render losses non-injury under standard schemes. | Economic injury not plausibly pled; state-law claims dismissed. |
| Enrollee Martin's standing | Martin paid out-of-pocket for off-label Seroquel and suffered injury. | Need specific medical-necessity/inappropriateness allegation for injury; bare allegations insufficient. | Martin failure to plead medically unnecessary/inappropriate use; claims dismissed. |
Key Cases Cited
- Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479 (U.S. 1985) (injury-in-fact requirement for civil RICO)
- Holmes v. S.E.C. Investors Prot. Corp., 503 U.S. 258 (U.S. 1992) (direct relationship/proximate causation standard)
- Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (U.S. 2006) (but-for and proximate causation in RICO)
- Maio v. Aetna, Inc., 221 F.3d 472 (3d Cir. 2000) (injury scope and standing limitations in RICO)
- UFCW Local 1776 v. Eli Lilly & Co., 620 F.3d 121 (2d Cir. 2010) (physician judgment and pricing context limit liability)
- Int'l Bhd. of Teamsters Local 734 Health & Welfare Trust Fund v. Phillip Morris Inc., 196 F.3d 818 (7th Cir. 1999) (premium/actuarial considerations as a defense to recovery)