NJ Vioxx trial goes to the jury, deliberations begin.

The conclusion of the second major Vioxx trial is at hand, with the plaintiffs closing arguments earlier today and the beginning of jury deliberations. The reporting on this case has been sporadic in the major national press, with the notable exception of the Wall Street Journal, which has stayed on top of this trial. I think they sense, as I do, that Merck is in a desperate situation if they don't win this first NJ case, as it was not the strongest plaintiff case they are going to see. So a loss here, and Merck is facing an almost insurmountable hole to climb out of.

For more back ground ,and a time line on the case ,I recommend you check out these articles in particular.

Still, as intriguing as this case is on it's own merits, and as an aside it is widely reported from observers that both plaintiff and defense attorney's in this matter did an excellent job in representing their clients with a great deal of passion, the most fascinating aspect of Vioxx litigation right now is the huge division in the trial bar and it's implication on the next set of cases to be tried.

There is a lot going on with this "group of ten", which is actually more like 350 attorney's from around the country that partner with lead firms, and the MDL down in Louisiana. If you look at the names of the firms involved, it's a who's who of asbestos firms, and I firmly believe, but can not yet prove, the proposed Asbesto's settlement legislation in Congress is driving this process as well. Lets face it, the proposed legislation on the asbestos fund will cut legal fee's to 10%, dramatically impacting the revenue models of these major firms. If they have a large inventory of Vioxx or other pharmaceutical mass torts, and they are in an MDL situation, they are not only not going to maximize verdict and settlement value on a case per case basis, but they are also sending 3% or more to the plaintiff steering committee for the privilege. If you are talking 3000 to 15,000 cases, thats some serious money, and I have no doubt the calculators at the big firms have all been doing the same math.

Not to put too fine a point on it, but they need to feed the beast here, and pay cuts to 10% and diminished values and slow outcomes on Vioxx don't add up to an exciting revenue model.

What impact will this have on Merck? Well, by embarking on the suicidal one case at a time strategy, and "defending them all" they have killed any easy opportunity to settle for a reasonable figure with a high degree of certainty it would cover all claims, to one that now will cost them at least double what it would have taken early on to put this to bed. I can assure you that had Merck offered the MDL and other groups $16 billion in the spring we would be on our way to working out the details of settlement today, instead, if they lose a few more major cases, and with the talent and state court jurisdictions they are about to face from the gang of ten, they will lose MANY major cases, their cost of settlement will be closer to $30 billion by the time this is done. Someone at Merck will lose their job on this one, it just isn't going to happen just yet.

As for the impact on the mass tort lawyers and settlement community, we still need to wait to see how the first MDL cases go down south and then the picture should be a little more clear.


Posted on November 1, 2005 .