Legal News

A Post-Game Report on the Merck-Vioxx Reversals

By Ashby Jones

A good amount of ink was spilled overnight on yesterday’s Vioxx rulings. To recap: appellate courts in both Texas and New Jersey overturned jury verdicts awarding plaintiffs millions.

The Texas court rested its reasoning largely on causation, finding “no competent evidence that a blood clot triggered by Vioxx ingestion” caused the plaintiff’s death.

In New Jersey, the issue — at least in regard to the nullification of the $9 million punitive damages award — was largely preemption: The New Jersey court ruled that the plaintiffs weren’t entitled to punitives because federal regulators had approved Vioxx, and a jury didn’t have the authority to decide whether the company had defrauded the government. The appellate court, however, upheld the compensatory award of $4.5 million. Here are stories from the WSJ and NYT.

Some takeaways from this morning’s coverage:

The Cases Aren’t Over “I’m upset, and I’ll appeal it.” Those are the words of Mark Lanier, the plaintiffs lawyer in the Texas case. Lanier says the 10-page 14th Court of Appeals opinion is “cursory” and “seems to construe the evidence in favor of the defendant and leaves out all of the evidence that supports the verdict.” Lanier says Carol Ernst couldn’t stop crying when he told her about the opinion, and she told him she has lost faith in the judicial system. Here’s the report, from the Texas Lawyer. One more provocative line from Lanier, this one from his firm’s press release: “This decision was handed down by a group of judges who regularly accept campaign contributions from law firms representing corporations that appear in their courts. We will appeal this decision to the United States Supreme Court if necessary.”

Preemption, More to Come? According to both the Journal and the Times, the extent to which federal approval preempts the ability of people to sue under state laws is scheduled to be decided during the U.S. Supreme Court’s next session in a case called Wyeth v. Levine. A ruling in favor of preemption could significantly undermine drug mass torts. And that would likely hit the bottom line not only of plaintiffs lawyers, but of BigLaw defense lawyers as well.

The Effect on Opt-Outs Last November, Merck reached a $4.85 billion settlement with the majority of the Merck plaintiffs. In her story today, the WSJ’s Heather Won Tesoriero asks whether yesterday’s rulings will encourage those holdouts who’ve yet to join the class to opt in. Merck thinks so. “I hope it reinforces the desirability of coming into the settlement program,” Merck General Counsel Bruce Kuhlik said.

Did Merck Settle Too Soon? (Reprised) We asked the question yesterday, and got a resounding “NO!” from one expert, Kirkland & Ellis’s David Bernick. But the NYT’s Alex Berenson got at least one different answer. Michael Krensavage, a former health care investment analyst and now the managing partner of Krensavage Partners, a health care fund, said that the rulings released Thursday made him doubt the wisdom of Merck’s decision last November to settle the lawsuits. “Today’s decisions verify Merck’s initial strategy of fighting every case and raises questions about the wisdom of settling,” Krensavage said.

Full post as published by Law Blog - WSJ.com on May 30, 2008 (boomark / email).