Merck Vioxx Judge Threatens to End Suit Consolidation

posted on:
January 5, 2006

author:
Staff

The judge overseeing federal lawsuits over Merck & Co.’s Vioxx painkiller said he may end his effort to combine the cases for a possible settlement because of delays in getting some claims to trial.

U.S. District Judge Eldon Fallon in New Orleans said he is having trouble getting jury trials scheduled after Hurricane Katrina displaced thousands of residents and shut the city’s courthouses for months. Plaintiffs’ lawyers are pressing ahead with similar Vioxx suits in state courts around the U.S.

Fallon, at a Jan. 3 hearing, said he may “shut down” the consolidation “if all the cases are being tried in state court before we get one tried in federal court.”

The judge said he will consider sending all federal Vioxx cases back to their home states for trial, a move that would make it more difficult to negotiate an overarching settlement. Merck, the third-largest U.S. drugmaker, has refused to pursue a settlement and instead set aside $675 million to fight suits over claims that Vioxx caused heart attacks or strokes.

“Judge Fallon is trying to make the point that he wants to see the federal litigation stay on track,” said Ted Mayer, a lawyer with New York’s Hughes Hubbard & Reed who represents Merck. “The only way to do that is to press forward with getting cases to trial.”

Test Cases

Fallon said in October he wanted to try some Vioxx claims before starting settlement talks. Fallon had set three federal cases for trial in the first four months of this year, with plans to use the verdicts to help set values for other Vioxx claims.

“They were supposed to be test cases,” said Chris Seeger, a New York lawyer with the firm of Seeger Weiss and a member of a steering committee overseeing the federal cases. “If Judge Fallon can’t try them, then his only choice is to get them ready for trial and farm them back out.”

Six Vioxx suits are set for trial in state courts in New Jersey, Texas, Florida and California over the next six months, Fallon said. Getting the same number of federal cases scheduled in New Orleans in the period will be difficult because of the devastation wreaked by the August storm and floods, he said.

“The witnesses are not available, the lawyers are not available, the records are not available and the doctors are not available,” Fallon said.

Merck, based in Whitehouse Station, New Jersey, pulled Vioxx off the market in September 2004 after studies linked it to increased heart risks for long-term users. In February, a panel ordered all federal Vioxx suits consolidated in Fallon’s court for pre-trial proceedings. Judges sometimes use consolidations to push for settlements in product-liability cases.

Split Verdicts

Merck’s shares fell 31 cents to $32.87 in after-hours trading and have fallen more than 26 percent since Vioxx’s withdrawal. The drug generated $2.5 billion in sales in 2004.

Fallon has estimated the company may have to defend more than 100,000 Vioxx suits. Merck’s liability may reach $50 billion, Friedman Billings Ramsey analyst David Moskowitz estimates.

The company split the first three cases tried over the painkiller. In August, a Texas state court jury ordered Merck to pay $253 million to the family of a Wal-Mart manager who died of heart problems after taking Vioxx for about eight months.

A state jury in Atlantic City, New Jersey ruled in November that Merck wasn’t responsible for the heart attack of a postal worker who took the drug for about two months. In December, a federal jury in Houston deadlocked over whether a Florida man’s use of the drug for about a month led to his fatal heart attack. The case is set to be tried again in February.

Mark Lanier, a Houston attorney who won the first Vioxx verdict against Merck, said the company’s vow to try all suits over the painkiller is forcing plaintiffs’ lawyers to pursue state court trials. Lanier is set to try the next one, in New Jersey starting Feb. 27.

“I have 2,000 Vioxx cases that I need to get to trial,” Lanier said. “If there are problems with getting them tried in federal court, I have to move forward in all possible courts.”

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