Huge news on legal strategy for Vioxx litigation.

As the NJ trial of Humeston v. Merck moves to it's possible conclusion later this week, most recent news here, the real news on this litigation is happening in Louisiana in federal court as a group of 10 trial lawyers have filed papers to remove themselves and their clients from the MDL, and thus free themselves to pursue cases in state court in their various jurisdictions and areas of practice.

This was discussed earlier here at Settlement Channel, and initially reported by The Wall Street Journal on Monday of this week.  

The impact of this group splitting off will have a profound impact on the global settlement strategy, and dramatically saps the negotiating leverage and power of the MDL group and plaintiff steering committee. Again, the WSJ has done a fantastic job reporting this and be sure to look at this October 4th , 2005 article on PSC's, how the Vioxx one works, and you can see the early grumbling of one of the gang of ten, Attorney Mark Lanier, on the issues of working in the constraints of the current system. Obviously this issue has been building behind the scenes for some time and has now burst into the open.

From a strategic point, regardless of the motivation or reasons, it puts Merck into a more difficult position. Instead of handling one case at a time, hopefully in Federal court where rules of evidence favor them over state courts, they are now required to face multiple attacks and trials from coalitions of top flight, well financed trial lawyers who can spread Merck's resources and energy over a broad front. This again points to Merck's missed opportunity at the outset to approach the trial lawyers at the beginning when they were united and cooperating to work out a global settlement, and instead embarking on the financially suicidal path of defending one case at a time. The price just exploded for Merck regardless of the NJ and Louisiana trial's outcome as they now face a fractured trial bar each carving out their own cases and litigation strategy. At some point the institutional holders of Merck stock are going to bring incredible pressure to bare on Merck's management to "put a number" on this debacle and get it settled, or the stock price and earnings are going to be in a perpetual tail spin.

As for the trial lawyers, i'm not at liberty from my sources to identify all of them, but if you go back and look at the major national players in asbestos, that will give you a significant head start on the firms that have chosen to break away.  In short, well financed, top quality trial lawyers who know how to price, try and settle cases on their own, and who don't necessarily need the resources or assistance of a PSC to get the job done.

I will continue to report on this as news becomes available. 

Posted on October 26, 2005 .