As the firm has been saying since the recall of Vioxx, Merck reiterated today that it will fight very vigorously any class action lawsuits filed against the company. Several Merck executives including the CEO and general counsel were speaking to analysts and investors in a day full of presentations and conference calls.
Here are key points from Merck's announcements and the text of Merck's statement related to Vioxx is below:
- Merck will fight every single lawsuit in the Vioxx recall case. So if you have been planning on getting rich by suing Merck, the company is telling you, "Forget it!". (Related article: How to protect yourself from Vioxx scams and fraud?)
- It does not plan to settle the cases out of court.
- Merck believes that there is no basis for class action status since there is no commonality in the cases. (Related article: How to avoid gold-digger Vioxx attorneys?)
- Merck is admitting no wrongdoing and is essentially repeating that it withdrew Vioxx as soon as it came to know of Vioxx related deaths and other injuries.
- Merck has not made any provisions for Vioxx related liabilities that may reach as much as $38 billion. (Related article: Should you accept Vioxx lawsuit related cash advances?)
- The company admits, though, that in the worst case scenario, it will be basically go out of business.
Merck's statement on Vioxx litigation
In his presentation today on VIOXX litigation, Merck Senior Vice President and General Counsel Kenneth C. Frazier stated that the company will vigorously defend against VIOXX-related lawsuits, including taking cases to trial. He also said Merck will oppose any efforts to seek class-action treatment with respect to the personal injury lawsuits because there is no commonality to the cases. "Merck voluntarily withdrew VIOXX from the marketplace and believes the company has acted appropriately at all times," Mr. Frazier stated.
VIOXX Litigation Update
As previously disclosed, federal and state personal injury lawsuits involving individual claims, as well as several putative class actions have been filed against the company with respect to VIOXX. As of Nov. 30, the company has been served or is aware that it has been named as a defendant in approximately 475 lawsuits, which include approximately 1,100 plaintiff groups alleging personal injuries resulting from the use of VIOXX. Certain of these lawsuits include allegations regarding gastrointestinal bleeding, cardiovascular events and kidney damage. The company has also been named as a defendant in several putative class actions seeking medical monitoring as a result of the putative class members' use of VIOXX. In addition, certain state court actions seek various remedies under state consumer fraud and fair business practice statutes, including recovering the cost of VIOXX purchased by individuals and third-party payers such as union health plans (all of the actions discussed in this paragraph are collectively referred to as the "VIOXX Personal Injury Lawsuits"). The actions filed in the state courts of California and New Jersey, respectively, have been transferred to a single judge in each state for coordinated proceedings. In addition, the company has filed a motion with the Judicial Panel on Multidistrict Litigation seeking to transfer to a single federal judge and consolidate for pretrial purposes all federal cases alleging personal injury and/or economic loss relating to the purchase or use of VIOXX; several plaintiffs in certain VIOXX Personal Injury Lawsuits pending in federal court have made similar requests.
In addition to the VIOXX Personal Injury Lawsuits, a number of purported class action lawsuits have been brought naming as defendants the company and several current or former officers of the company, and alleging that the defendants made false and misleading statements regarding VIOXX in violation of the federal securities laws (the "VIOXX Securities Lawsuits"). As of Dec. 9, 12 VIOXX Securities Lawsuits have been filed. In addition to the VIOXX Securities Lawsuits, shareholders have brought derivative lawsuits against the company. As of Dec. 9, six such lawsuits have been filed. Also, lawsuits asserting claims under the Employee Retirement Income Security Act have been brought against the company. As of Dec. 9, 10 such lawsuits have been filed. The company has filed a motion with the Judicial Panel on Multidistrict Litigation to transfer to a single federal judge and consolidate for pretrial purposes all federal lawsuits discussed in this paragraph.
In addition to the lawsuits discussed above, the company has been named as a defendant in actions in various countries in Europe, Canada, Brazil, Australia and Israel related to VIOXX. Based on media reports and other sources, the company anticipates that additional VIOXX Lawsuits will be filed against it and/or certain of its current and former officers and directors in the future.
The company currently anticipates that one or more of the VIOXX Personal Injury Lawsuits may go to trial in the first half of 2005. The company cannot predict the timing of any trials with respect to the VIOXX Shareholder Lawsuits. The company believes that it has meritorious defenses to the VIOXX Lawsuits and will vigorously defend against them. In view of the inherent difficulty of predicting the outcome of litigation, particularly where there are many claimants and the claimants seek indeterminate damages, the company is unable to predict the outcome of these matters, and at this time cannot reasonably estimate the possible loss or range of loss with respect to the VIOXX Lawsuits. The company has not established any reserves for any potential liability relating to the VIOXX Lawsuits. A series of highly unfavorable outcomes could have a material adverse effect on the company's financial position, liquidity and results of operations.
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