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Class Action Could Cost Merck Billions

Stakes Are Huge in Trial Set for Sept. 12

September 2, 2005
Merck's Vioxx trials may take a turn for the worse Sept. 12, when a New Jersey case that could turn into a billion-dollar class action goes to trial.

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More than half the 5,000 personal injury suits against Merck have been filed in New Jersey, where Superior Court Judge Carol Higbee has certified a national class action covering every private third-party payer that allowed members of its health benefits plan to buy Vioxx.

With an estimated 20 million Vioxx users in the United States since 1999, Merck could face a judgment of billions of dollars if it loses the case brought by the International Union of Operating Engineers Local 68 Welfare Fund.

Most Vioxx purchases were made through health plans run by insurance companies and health maintenance organizations and the union's case could therefore encompass millions of consumers who took the popular painkiller that's been linked to increase risk of heart attack and stroke.

Merck suffered a calamitous loss in August when a Texas jury found the company negligent in the death of Robert Ernst, a 59-year-old triathlete who used Vioxx, awarding the man's widow $24 million in actual damages, plus $229 million in punitive damages, for a total of about $253 million.

But the New Jersey case is even more fraught with peril. Unlike the thousands of individual personal injury cases, Local 68 lawyers don't have to prove that anyone suffered injury. Under state law, all they need to show is that the third-party payers were influenced by unconscionable Merck business practices, such as deceptive marketing and promotion of Vioxx.

If the engineers' union wins, all third-party payers nationwide can recoup payments to the company, and under the New Jersey law they would be entitled to collect treble damages as well as attorney fees, easily running up a total of $10 billion or more.

Merck would have been able to remove the case to federal court under the Class Action Fairness Act of 2005, but the case was filed before the law was passed.

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