In an unusual move, Takeda Pharmaceuticals asked a federal appeals court to rule that a Native American tribal court does not have jurisdiction over a lawsuit which could expose the company to enormous liability.
The effort marks the first time that a drug maker has taken such a step, according to experts, and underscores the risks facing the pharmaceutical industry amid a proliferation of lawsuits filed by patients who claim they were harmed by medicines.
The case against Osaka, Japan-based Takeda for an undisclosed amount was filed two months ago by Victor Connelly, a member of the Blackfeet tribe who claims he developed bladder cancer after taking the Actos diabetes drug for several years. The tribal reservation is located in Montana.
Such claims are hardly unusual. Takeda, in fact, earlier this year agreed to pay up to $2.4 billion to settle an estimated 8,000 lawsuits filed in state and federal courts that claimed the company hid the risk that patients could develop cancer while taking the pill.
But Connelly’s lawsuit represents a different challenge for the drug maker.
At issue is whether Native American tribal courts have jurisdiction over civil lawsuits filed against those who are not Native American. This matters to Takeda because in the US state and federal court system, a company that loses a case has the right to seek an appeal. But if a company loses a case in tribal court, it cannot appeal to a federal court. In other words, Takeda has no recourse if it loses the case and is ordered to pay a large sum, which might encourage still other Native Americans to file similar suits in tribal courts.
“Indian tribes are independent sovereigns and not subject to federal court review, except on the huge question of whether they have legal jurisdiction in the first place,” said Robert Anderson, who heads the Native American Law Center at the University of Washington in Seattle. “So they could be sued by, perhaps, thousands of other people. And these companies fear liability in tribal court.”
After Connelly filed his claim in the Blackfeet Tribal Court, the drug maker challenged its jurisdiction by filing a lawsuit in federal court in Montana but lost. Anderson noted this is not the first time a drug maker, or any company, has challenged tribal authority, but the Connelly case is the first time a pharmaceutical company sought an appeals court ruling.
A Takeda spokeswoman wrote us that the company seeks “to have the case reviewed in a court that has jurisdiction over this matter. We continue to believe that the claims made in the litigation are without merit. As a company, we believe Takeda acted responsibly with regard to Actos.”
The extent to which tribal courts have jurisdiction in lawsuits brought against non-tribal members is a hot topic. Earlier this week, the US Supreme Court heard arguments involving Dollar General over a civil lawsuit filed in a tribal court over allegations that a store manager made sexual advances toward a 13-year-old boy. The retailer asked federal courts to block the suit. The boy’s family is seeking $2.5 million.
Even if the Supreme Court rules that tribal courts do have such jurisdiction, it remains unclear whether Takeda would face potentially huge liability. However, Joseph McKay, who is Connelly’s lawyer, noted the drug maker actively promoted its Actos diabetes pill to the US Indian Health Service in hopes of getting favorable placement on the agency formulary, which is a list of medicines that the service covers.
Anderson also pointed out that the pharmaceutical industry has regularly marketed diabetes drugs to the Native American population, given its high prevalence of diabetes. Native Americans are 2.5 times as likely as white adults to be diagnosed with the disease, and 2.3 times more likely than non-Hispanic whites to die from diabetes in 2010, according to the US Department of Health and Human Services.
Such numbers suggest that, win or lose, Takeda and other drug makers would be hard-pressed to ignore such a market. No matter how many cases may be tried by a tribal court, companies would likely absorb such lawsuits as the cost of doing business. “I can’t imagine them excluding a population of people who need pharmaceuticals,” said Carl Tobias, a professor at the University of Richmond law school, who tracks pharmaceutical industry litigation.