The Arkansas Supreme Court, asked by a federal court in Louisiana to clarify a point of state law in a class action case over the diabetes drug Actos, answered it in a way unfavorable to the plaintiff.
The plaintiff, Greg Bowerman, filed on behalf of taxpayers in a Saline County lawsuit. But his case was consolidated with other cases in the Louisiana court. The suit asks that the expenditure of public money under government medical programs to provide patients with Actos to be construed as an “illegal exaction,” or illegal expenditure, of tax money because the drug has been found to be cancer-causing and also because the maker of the drug, Takeda, allegedly made false clams about the drug. Asked by the federal court if an illegal exaction claim was allowed by Arkansas law, the Arkansas Supreme Court said no. It said the public money was legally spent on drugs prescribed by a physician and thus couldn’t be recovered from the defendant pharmaceutical manufacturer under that theory.
The majority in the 4-3 decision split on a second question aimed at determining whether a previous ruling by the court still applied. In it, the court found an illegal exaction when asphalt contractors were paid for inferior asphalt in a price-fixing scheme. The Arkansas court majority said that decision need not be considered because there was no illegal exaction and so the court didn’t need to get into the product liability claim. Justices Paul Danielson, Donald Corbin and Cliff Hoofman wrote in dissent. They said the old case supported the proposition that a illegal exaction claim was possible against a private party — such as a drug company — when the non-government party acted improperly with government money. That precedent should apply or be overruled, they suggested.