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(Reuters) - Major pharmaceutical companies urged a Washington, D.C., federal appeals court on Tuesday to uphold the dismissal of claims that their medical-goods contracts with Iraq's health ministry helped finance terror activity in the country that injured or killed American service members between 2005 and 2011.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments for nearly two hours over whether the drug companies, represented at the hearing by Kannon Shanmugam of Paul, Weiss, Rifkind, Wharton & Garrison, can be held liable under the federal Anti-Terrorism Act for certain deliveries of drugs and medical equipment.
Tuesday's hearing raised questions about how and where courts can draw a line around the Anti-Terrorism Act to protect humanitarian aid that benefits people in distressed areas plagued by terror activity.
Last year, U.S. District Judge Richard Leon in Washington, D.C., ruled for named defendant AstraZeneca Pharmaceuticals LP and other companies, concluding the plaintiffs had not made a viable "aiding and abetting" claim under the Anti-Terrorism Act.
"A contrary decision would have a severe chilling effect on the willingness of companies and non-governmental organizations to conduct essential activities, often at the government's request, in troubled regions," Shanmugam argued on Tuesday before Circuit Judges Nina Pillard, Robert Wilkins and Harry Edwards. "The district court correctly dismissed the plaintiffs' complaint."
The plaintiffs contend an organization sponsored by the terrorist group Hezbollah controlled Iraq's health ministry, and that pharmaceutical companies made "corrupt payments" to alleged terrorists in order to obtain contracts.
Joshua Branson of Kellogg, Hansen, Todd, Figel & Frederick, who argued for the plaintiffs, acknowledged at the hearing that "if all you're doing is providing humanitarian assistance in an area that has terrorists in it, that's not going to be enough to create liability."
The Anti-Terrorism Act, Branson said, has key elements of "substantial assistance" and "general awareness." He argued that the complaint against the pharmaceutical companies met the high bar to prove liability.
"This law is broad. It's because Congress really doesn't like it when companies fund terrorists," Branson told the panel judges. "There may well be some competing policy considerations that might rear their head in some future case, but very heavy in the calculus is Congress's determination that you shouldn't fund terrorists."
Branson did not immediately return a message seeking comment after the argument. Shanmugam, who leads the Supreme Court and appellate practice at Paul, Weiss, did not immediately comment on the case.
Shanmugam argued jointly for AstraZeneca and the other defendants: F. Hoffmann-La Roche Ltd, Genentech Inc, GE Healthcare USA Holding LLC, Johnson & Johnson, Pfizer Inc, Pharmacia & Upjohn Co LLC and Wyeth Pharmaceuticals LLC.
The companies said in a joint defense statement on Tuesday that they "are not responsible in any way for the tragic events that were caused and carried out by Iraqi militia groups and there are no grounds to warrant a different outcome on appeal."
Shanmugam's argument focused in part on how the defendant companies were working to help rebuild Iraq's nationalized health care system at the request of the U.S. government.
"Defendants manufactured or supplied life saving goods to Iraq's Ministry of Health at a time when the United States government and many others were providing similar support," Shanmugam argued.
The case is Atchley v. Astrazeneca UK Ltd, U.S. Court of Appeals for the D.C. Circuit, No. 20-7077.
For plaintiffs: Joshua Branson of Kellogg, Hansen, Todd, Figel & Frederick
For defendants: Kannon Shanmugam of Paul, Weiss, Rifkind, Wharton & Garrison
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September 22, 2021 at 05:18AM
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Pharma companies defend dismissal of terror case at D.C. Circuit hearing - Reuters
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