Drugmakers must face lawsuit over Iraqi terrorism funding, US appeals court rules

By Mike Scarcella

WASHINGTON, Jan 23 (Reuters) - A U.S. appeals court on Friday reinstated a lawsuit claiming some of the world’s largest drug and medical‑device companies paid millions of dollars in cash and medical supplies that helped to fund terrorism that killed or injured hundreds of American troops and civilians in Iraq.

A three‑judge panel of the U.S. Court of Appeals for the District of Columbia Circuit said the plaintiffs had shown enough evidence to move forward for now with terrorism‑related claims against AstraZeneca AZN.L, Pfizer PFE.N, GE Healthcare USA, Johnson & Johnson JNJ.N and F. Hoffmann‑La Roche.

The lawsuit, brought by U.S. service members and civilians harmed between 2005 and 2011, accused U.S. and European pharmaceutical and device makers of making corrupt payments to Jaysh al‑Mahdi, a militia sponsored by Hezbollah, to secure medical‑supply contracts from Iraq’s Health Ministry. The plaintiffs say the militia controlled the ministry during the period.

“Plaintiffs adequately allege that defendants’ participation was conscious, voluntary, and culpable: Defendants knew their assistance would be used to launch attacks on plaintiffs, and they repeatedly structured their transactions in an unusual and unlawful manner that served to facilitate Jaysh al-Mahdi’s operations,” wrote Circuit Judge Cornelia Pillard, joined by Circuit Judge Richard Wilkins and Senior Circuit Judge Harry Edwards.

In a joint statement, the companies said they were disappointed by the appeals court's order and "are not responsible in any way for the tragic events that were caused and carried out by Iraqi militia groups." The companies said "the baseless claims should have been dismissed, and therefore, we are evaluating our legal options to secure that result.”

A lawyer for the plaintiffs did not immediately respond to a request for comment.

The lawsuit, filed in 2017 in Washington federal court, seeks unspecified damages under the Anti‑Terrorism Act. A judge dismissed the case in 2020, but the D.C. Circuit revived it in 2022. The Supreme Court later sent the case back for reconsideration after it issued a separate ruling shielding Twitter, now X, from liability under the same law.

The D.C. Circuit in Friday’s ruling said that the Twitter decision did not apply, because it involved claims that the company “passively and tangentially” aided terrorists in the ordinary course of business. The companies in their statement said the appeals court's order conflicts with the Supreme Court decision in the Twitter case.

The case is Joshua Atchley et al v. AstraZeneca UK Limited et al, 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: Lisa Blatt of Williams & Connolly

Read more:

US Supreme Court gives pharma companies a chance to thwart terrorism-funding lawsuit

US court revives lawsuit against Pfizer, others on Iraq terrorism funding claims