Healthcare Industry News: AZOR
News Release - May 29, 2008
Merck Wins Appeal of First VIOXX(R) Case to go to TrialMerck Also Wins Appeals of Major Aspects of New Jersey Cases
WHITEHOUSE STATION, N.J.--(HSMN NewsFeed)--Merck & Co., Inc. said today that it is gratified that a Texas appeals court overturned the August 2005 verdict of a state court jury in BrAZORia County and rendered a judgment in favor of Merck in the VIOXX product liability case Ernst v. Merck. It was the first VIOXX case to go to trial after the Company voluntarily removed the medicine from the market.
Merck also said today that a New Jersey appellate division has overturned the punitive damage and consumer fraud awards in the 2006 verdict in a two-plaintiff VIOXX trial involving Thomas Cona and John McDarby.
"We are gratified that the Texas appeals court correctly found that VIOXX did not cause Mr. Ernst's death and reversed the previous decision for the plaintiff in the first VIOXX case to go to trial. In addition, the New Jersey court correctly reversed the awards of punitive damage and consumer fraud. Today's decisions overturn almost $40 million of damages and attorneys fees previously awarded to plaintiffs at trial,” said Bruce Kuhlik, executive vice president and general counsel of Merck & Co., Inc. “We intend to seek further review of the portion of the award that remains standing after the New Jersey decision. We continue to believe Merck acted responsibly."
The Texas Fourteenth Court of Appeals found that VIOXX did not cause the death of Mr. Ernst, reversed the jury’s verdict and rendered a judgment in favor of Merck.
Chief Justice Adele Hedges, writing for a unanimous panel, said in the ruling, "we find no evidence that Ernst suffered a thrombotic cardiovascular event, i.e., a myocardial infarction triggered by a blood clot. Accordingly, appellee failed to show that ingestion of VIOXX caused her husband’s death.”
The jury’s original verdict on Aug. 19, 2005 included $24,450,000 in compensatory damages and $229,000,000 in punitive damages for a total of $253,425,000 against Merck. On June 23, 2006, based on relevant Texas law which limits the amount of punitive damages, the punitive damage verdict of $229,000,000 was reduced to $1,650,000.
In the Cona and McDarby cases, the New Jersey Appellate Division, an intermediate appellate court, overturned the punitive damage award as well as the consumer fraud award, and let stand the compensatory damages for personal injury to Mr. McDarby. In reversing the consumer fraud verdict, the court also rejected the attorneys fees granted to the plaintiffs’ attorneys.
As a result, the court overturned more than $13 million in damages and attorneys fees.
In the trial, which resulted in a partial victory for Merck, the Company presented evidence that both of the heart attacks were caused, not by VIOXX, but by the pre-existing medical conditions of the two men. While the jury found that VIOXX did not cause Mr. Cona’s heart attack, it found in favor of Mr. McDarby, awarding him both compensatory and punitive damages.
The jury awarded both men the out of pocket costs associated with their purchases of VIOXX under the consumer fraud statute. Today’s decision overturns that award as well.
Status of Litigation
Merck has won the large majority of cases that have gone to trial and thousands of lawsuits have been dismissed. Of the 18 plaintiffs whose cases went to trial, only three have outstanding product liability judgments against Merck.
Merck has entered into an agreement to resolve state and federal myocardial infarction and ischemic stroke claims filed or tolled by Nov. 9, 2007. The settlement program is progressing in a satisfactory manner. Because of the large number of enrollments received so far, Merck is confident that the number of verified enrollments will exceed the thresholds that will obligate the Company to pay $4.85 billion into a resolution fund.
During the Ernst trial, which led to a verdict on Aug. 19, 2005, Merck was represented by Gerry Lowry of Fulbright & Jaworkski, L.L.P. of Houston and David C. Kiernan of Williams & Connolly, L.L.P. of Washington D.C. Merck’s appellate counsel are Katherine D. Mackillop of Fulbright & Jaworski L.L.P. in Houston and Charles C. Lifland of O’Melveny & Myers LLP in Los Angeles.
Merck’s appellate counsel in the Cona and McDarby cases are Douglas S. Eakeley of Lowenstein, Sandler LLP and Charles C. Lifland of O’Melveny & Myers LLP in Los Angeles.
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2007, and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K, which the Company incorporates by reference.
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