For Merck, Vioxx Paper Trail Won't Go Away

Category: Vioxx

More Info: Defective Drugs

Bad facts. Plaintiffs’ lawyers love that term. Merck may grow to hate it.

On Friday, a Texas jury found Merck liable for the death of Robert C. Ernst, who died in May 2001 after taking Vioxx, a painkiller made by the company. After two days of deliberations, the jury said that Carol Ernst, Mr. Ernst’s widow, should be awarded $253.5 million.

In interviews after the six-week trial, jurors said they had concluded from the testimony and documents presented by Mrs. Ernst’s lawyers that Merck was long aware of Vioxx’s potential heart risks but hid those risks from patients. To the jurors, the evidence added up to a mass of damaging bad facts that overwhelmed the company’s defense.

Merck’s stock price fell almost 8 percent Friday afternoon, although Texas’s rules on punitive damages will automatically lower the verdict to $26.1 million and Merck has already said it plans to appeal the case.

Over the next few days, lawyers, Wall Street analysts and Merck’s own executives will try to explain the company’s devastating defeat and to predict what the Texas case means for the thousands of additional Vioxx suits that Merck will face. The answer could determine whether Merck will survive as a strong, independent company or will be crippled for years or even decades.

And the answer may not be what Merck or its investors hope to hear.

“Merck faces a challenge in future trials of addressing the company’s behavior,” said Peter A. Bicks, a defense lawyer with Orrick, Herrington & Sutcliffe and who is not involved in the litigation.

The Texas case was the first Vioxx lawsuit to reach trial, but 4,200 other suits have already been filed, and many are approaching juries. A second state trial is scheduled to begin in New Jersey in September, and the first federal suit is set for New Orleans in November. Merck has said that it plans to take every suit to court rather than offer settlements.

“Friday’s verdict in Texas was a disappointment to all of us at Merck because we know we acted responsibly,” Merck’s general counsel, Kenneth C. Frazier, said in a statement on Saturday. “We believe we have meritorious defenses, and we intend to vigorously defend individual Vioxx cases one by one.”

Should trials continue to go against it, Merck faces a basically unlimited pool of plaintiffs. Over five years, about 20 million people worldwide took Vioxx before Merck stopped selling the drug in September 2004, after a clinical trial found irrefutable evidence that Vioxx had heart risks compared with a placebo.

As Merck examines its defeat in Texas, it may be tempted to blame its problems on the ineptitude of its lawyers, who committed basic mistakes like failing to prepare witnesses and badgering Mrs. Ernst, a sympathetic widow, for 90 minutes on cross-examination.

Merck may tell itself that the part of Texas where the case was heard is favorable to plaintiffs and that the trial might have turned out differently elsewhere. It might even say that W. Mark Lanier, the Houston lawyer who represented Mrs. Ernst, is so skilled that he won a case that most other plaintiffs’ lawyers would not even imagine bringing.

All those responses have an element of truth. Unfortunately for Merck, they hardly begin to explain the enormous verdict, which the jury of seven men and five women in Angleton, Tex., about 40 miles south of Houston, returned on a 10-2 vote.

The real explanation may lie in the “bad facts” that Mr. Lanier presented to the jury.

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TriMark Legal Funding was founded in 2003 and is one of America's original legal funding providers. TriMark provides pre-settlement funding and post-settlement funding to injured plaintiffs who are involved in personal injury lawsuits, employment litigation, work injury accidents and workers compensation lawsuits, mass tort litigation, and multidistrict litigation. We also provide post-settlement attorney funding and portfolio funding for law firms.

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