Sidney Hillman Health Center o v. Abbott Laboratories, Incorpora
2015 U.S. App. LEXIS 5975
| 7th Cir. | 2015Background
- Abbott marketed Depakote from 1998–2012 for off-label uses, allegedly misrepresented safety/efficacy and paid physician kickbacks, while concealing its role.
- Funder plaintiffs are multi-employer benefit funds who reimbursed Depakote for off-label indications, seeking civil RICO and state-law relief for 1998–2012 injuries.
- Fifteen months after the alleged scheme, funds filed a class-action in August 2013 on behalf of third-party purchasers who reimbursed Depakote purchases.
- District court dismissed with prejudice as time-barred, holding accrual began in 1998 when off-label reimbursements occurred and rejecting tolling/equitable theories.
- Court on appeal reverses, concluding factual questions about accrual/discovery and concealment should be resolved with discovery, remanding for further proceedings and reinstating state-law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does RICO accrual begin for concealed off-label marketing? | Funds argue discovery of injury governs accrual, not mere awareness of off-label reimbursements. | Abbott argues accrual started in 1998 with the first off-label reimbursements. | Not decided; remanded for discovery on accrual timing. |
| Can equitable tolling or estoppel extend the limitations period here? | Funds contend concealment tolled or estopped the start of the period. | Abbott argues no tolling given the pleadings stage and concealment not designed to hinder suits. | Not decided on appeal; remanded for factual development. |
| Was it proper to dismiss at the pleadings stage based on statute of limitations? | Dismissal at pleading stage inappropriate where facts needed for timeliness are unresolved. | Timeliness should have been resolved as an affirmative defense with record evidence. | Reversed; district court must provide discovery and adjudicate timeliness on remand. |
| Should the court leave open the possibility that discovery rules or case law govern timing for RICO accrual here? | Some precedents support an injury-discovery rule; Barry Aviation-like guidance may apply. | Rotella/Klehr framework favors basic discovery of injury, not discovery of pattern. | Remain unresolved; remand for development of record to decide accrual under governing standards. |
Key Cases Cited
- Rotella v. Wood, 528 U.S. 549 (2000) (establishes basic discovery rule for RICO accrual (injury, not pattern))
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (rejects alternative accrual theories; supports basic discovery rule)
- Barry Aviation, Inc. v. Land O’Lakes Mun. Airport Comm’n, 377 F.3d 682 (7th Cir. 2004) (context on when accrual begins for RICO claims; injury and injurer discovery considerations)
- Cada v. Baxter Healthcare Corp., 920 F.2d 446 (7th Cir. 1990) (recognizes injury-discovery rule in federal-question limitations)
- McCool v. Strata Oil Co., 972 F.2d 1452 (7th Cir. 1992) (recognizes discovery-based accrual in Seventh Circuit)
- O’Gorman v. City of Chicago, 777 F.3d 885 (7th Cir. 2015) (addressing pleading-stage timeliness and discovery doctrine)
- Cancer Found., Inc. v. Cerberus Capital Mgmt., LP, 559 F.3d 671 (7th Cir. 2009) (equitable tolling/late discovery considerations in RICO context)
- Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382 (7th Cir. 2010) (discusses discovery and timing concepts in limitations analysis)
- Fid. Nat’l Title Ins. Co. v. Howard Sav. Bank, 436 F.3d 836 (7th Cir. 2006) (equitable tolling/priority in discovery-based claims)
- Ironworkers Local Union 68 v. Astrazeneca Pharms., LP, 634 F.3d 1352 (11th Cir. 2011) (insurer payment dynamics and off-label coverage context)
- United States ex rel. Wilson v. Bristol-Myers Squibb, Inc., 750 F.3d 111 (1st Cir. 2014) (off-label marketing context and improper limitations on claims)
- United States v. Kubrick, 444 U.S. 111 (1979) (quoted in Rotella regarding timing of filing when critical facts known)