Preparing for Vioxx Suits, Both Sides Seek Friendly Venues
By BARBARA MARTINEZ
Staff Reporter of THE WALL STREET JOURNAL
November 17, 2004; Page B1
Whether Merck & Co. ends up winning or losing in the courts of law over Vioxx is going to depend in large part on the location of the playing field and the leanings of the referee.
For Merck, which withdrew its painkiller Vioxx from the world-wide market six weeks ago because of a link to heart attacks and strokes, the stakes could be huge. Analysts' projections of the company's legal exposure to liability range from $4 billion to about $20 billion.
For that reason, both sides are battling for the courtroom advantage -- seeking to have many of the cases that have been filed assigned to the courthouse and judge each thinks will be most open to its arguments.
"Where you play your games, everyone agrees, can make a big difference," says David A. Logan, dean and professor of law at Roger Williams University School of Law in Bristol, R.I.
Merck last month asked a judicial panel to move the nearly 80 federal Vioxx cases filed around the country into one court, the U.S. District Court in Maryland. The court is in the Fourth District, considered to have among the most conservative judges on the federal bench. In a court filing, the company described the Maryland court as ideal since it has tried consolidated product-liability cases in the past, it already has three Vioxx cases filed there and it is near major airports and in an area that has many hotels.
By contrast, a faction of attorneys representing a few hundred plaintiffs want all the federal cases transferred to U.S. District Court in Houston. "South Texas is considered a very, very attractive place for plaintiffs," Prof. Logan says. "The juries in southern Texas are among the most generous in the U.S."
In April, a south Texas jury in state court in Beaumont ordered drug maker Wyeth to pay $1 billion to the estate of a deceased woman after finding that the company's diet drug caused her death. About $100 million was actual damages and the remainder was punitive damages. The case is on appeal.
Other plaintiffs' attorneys have asked the courts to move the cases to other courtrooms elsewhere. Wherever they end up, the litigation is expected to be one of the largest product-liability cases ever heard. An estimated 20 million Americans took Vioxx from 1999, when the drug was launched, to Sept. 30, when the drug was withdrawn. Merck, based in Whitehouse Station, N.J., took that action after it found during one of its clinical trials that patients who had taken the drug daily for at least 18 months had twice the rate of heart attacks and strokes as patients on a placebo. The company maintains it was only then that it had evidence that Vioxx was problematic, even though many critics had been loudly warning about Vioxx's heart risks for years.
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BITTER PILLS
Litigation surrounding Merck's Vioxx may end up one of the largest product-liability cases of all time. To date:
Number of lawsuits filed: 375
Number of plaintiff groups: 1,000
2003 Vioxx sales: $2.5 billion
Number of U.S. users since 1999: 20 million
Source: Merck
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The withdrawal and the uncertainty surrounding the litigation have wreaked havoc on the company already. Merck's shares have plummeted about 40% since the withdrawal of the $2.5 billion drug. Just yesterday, Standard & Poor's became the second major credit-rating company to downgrade Merck's once-sterling debt ratings.
Lawsuits, meanwhile, keep getting filed -- so far, nearly 80 in federal courts and more than 250 in state courts. (The state cases, filed under statutes of consumer protection, are substantially the same as those at the federal level.) More cases are being filed daily. Plaintiffs' attorneys -- many with experience in asbestos lawsuits -- are teaming up around the country.
Kenneth Frazier, Merck's general counsel, says the company isn't thinking about a "global settlement," under which it would agree to pay a set amount to all Vioxx users who claim harm. "We're looking at these cases as individual cases," he says. "They are very defensible from the standpoint of the company's actions as well as what the plaintiffs will have to show." He notes that heart attacks and strokes are relatively frequent events in the U.S., caused by myriad common habits such as smoking, lack of exercise, poor eating and being overweight. A successful case would have to exclude many of these factors to prove Vioxx was the only cause of a heart attack or stroke, Mr. Frazier says. In many cases, he adds, excluding other factors "won't be easy."
Meanwhile, several Republican senators are pressing Senate Finance Committee Chairman Chuck Grassley to postpone a committee hearing on Vioxx scheduled for tomorrow. They are arguing that the session, as planned, is outside the panel's jurisdiction, according to Republican aides. Among those said to be concerned are Sens. Orrin Hatch of Utah, Don Nickles of Oklahoma and Pennsylvania's Rick Santorum.
Merck declined to discuss the company's request for a Maryland courtroom. A federal judiciary panel is scheduled to choose the court in late January.
"Plaintiffs win a lot less when the defendant's forum choice prevails," says Theodore Eisenberg, a professor at Cornell Law School who has studied the outcomes of such cases. "The defendants try to move things to the worst possible place for plaintiffs, or the best possible place for the defendants. That's both intuitively and statistically true."
If Merck gets its way and the panel chooses Maryland, the case could go to federal judge Catherine Blake, because she already has on her docket two of the three Vioxx cases filed in the Maryland court. A look at some of Judge Blake's recent decisions suggest why Merck would want the cases to go to her.
Judge Blake last year dismissed five suits against the wireless-phone industry that tried to force the companies to provide consumers with headsets to reduce exposure to radiation. She found that federal regulation of the industry pre-empted any court actions that would question a regulatory agency's judgment of safety.
The Food and Drug Administration regulates pharmaceutical products and allowed Vioxx to be marketed amid questions of increased cardiovascular risk. If Judge Blake were to take a similar tack in the Vioxx cases -- ruling that the FDA's judgments on safety pre-empts any lawsuit's attempt to show otherwise -- the cases could be dismissed before going to a jury, according to Prof. Logan.
In addition, Judge Blake in 2002 dismissed an $800 million cancer lawsuit against Motorola Inc. and others because she determined the plaintiffs failed to establish scientific proof for the link between cellphones and cancer.
Mark Lanier, who has hundreds of plaintiffs in Vioxx cases filed in Texas, says "there's no realistic reason" to have Vioxx cases tried in Maryland. "This is part of a legal strategy to do it in the most favorable forum possible."
Houston, on the other hand would be a favorable forum for Mr. Lanier, considering that the judge in the Houston Vioxx case recently rejected Merck's request to delay proceedings there.
Write to Barbara Martinez at barbara.martinez@wsj.com
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