In a front page story in today's New York Times, a review of the status of the Vioxx litigation is presented in the story " Plaintiffs find payday elusive in Vioxx cases." It is essentially what most of us working in mass torts and settlements already know, which is that the tactical decision by Merck to force plaintiffs into Federal Courts or a few key states and then try their cases one at a time has clearly been a winner for the defendants so far.
Some of the highlights of the story are the fact that Carol Ernst, the widow of one of the first big death cases to reach trial with Attorney Mark Lanier, has yet to receive a dime of her $26.1 million verdict back in 2005 for her husbands wrongful death. As we all know Merck is appealing virtually every case they lose and according to Attorney Lanier his client will probably not see a dime of that money until 2010 at the earliest.
Of further interest are some of the numbers and facts highlighted in the story, among them:
1. Merck has spent over $1 billion in defense litigation costs to fight these cases and claims. A number that surely dwarfs the funds spent and resources available to plaintiffs.
2. Where there liability was once estimated to be $25 billion for Vioxx claims some analysts calculate their ultimate exposure is closer to $5 billion. I don't quite get how any analyst can make that claim given that Merck certainly will spend at least another $1 billion in defense costs and even at reduced figures their liability for damages will in my estimation be far above $10 billion even with modest settlement amounts.
3. The number of cases pending in back log are about 45,000, although those will be reduced as fact finding and discovery continues and the weaker cases are weeded out by both sides.
4. Merck's stock has risen over 80% since the initial verdicts, indicating that Wall Street thinks their management of this liability will continue to keep their costs and exposure with in reasonable limits.
Essentially what we have is Merck skillfully using the federal tort reform legislation and it's unlimited war chest of money to tie up cases, contest virtually every claim, appeal every verdict and slow down the process to such a degree that the cost of bringing a case is punitive for a plaintiff unless they have a perfect case. Never mind that the science is pretty clear as to the cardiac risks of the drug and that it was widely prescribed, used and often misused by a huge cross section of society. Lets remember, the FDA pulled the drug for a reason.
If you look at where the cases are in the process and the tactics of the defendants it is clear that the trial lawyers are never going to be able to outspend or outlast the defendants in this matter. This is one of the nations largest public companies and it is a profit making machine even with the drag of this litigation against it. To compound the problem most of the mass tort firms approached this case with the old tactical style of advertising heavily, signing up tons of cases, establishing a steering committee to negotiate and coordinate litigation in the belief that this case would move quickly given the science on their side and the risk to Merck. The judges involved in the two consolidated venues, Judge Higbee in NJ State court and Judge Fallon in Federal court, while trying to move things along toward settlement have limited ability to force Merck to discuss settlement, and quite frankly if I was Merck i'd refuse all settlement offers at this point as well. Basically the plaintiffs are in a war of attrition that they are doomed to lose if they continue to use the same tactics and strategy they have followed so far.
Lets be clear, Merck's strategy was born out of desperation and necessity and the over reach of the trial lawyers. They were faced with a flood of claims, cases all over the country, no clear leaders to talk with to consolidate and settle cases with so they did what they had to do. Consolidate venues to favorable locations, drag out the process, fight every case and appeal every loss knowing the two advantages they had were time and money. They played the hand dealt them beautifully so far.
So what can the plaintiffs and trial lawyers do now given their mistakes and waste of resources to date?
In military tactics, if faced with an enemy with superior resources but who is essentially attempting to hold ground or is in a defensive posture you typically don't keep pounding your self into their strongest position and deplete your resources. Of course you need to keep up pressure through trials and by selecting the strongest cases to bring early on. However, you have to look at what is going to cause the greatest pain to Merck in order to force them to the settlement table and start the process of determining fair value for legitimately injured plaintiffs.
1. Force them to defend more territory and expend more resources. Essentially trial lawyers need to get their cases out of these consolidated disasters, move them back to their states and do what Merck is doing. That being try your best cases one at a time. Stop hoping for a few big wins and a mass settlement, but bring your best cases and let local juries decide the facts. Consolidation favors Merck in a major way and they know it.
2. Look at alternatives to mass torts as it's been practiced for the last 15 years. It's a broken system for trial lawyers, the defendants know it and they are exploiting the new realities of mass torts to their advantage while trial lawyers continue to fight "the last war." There are methods to consolidate clients into litigation groups other then MDL's and my blog and others affiliated with LBN know exactly what i'm referring too. Start looking at creative methods.
3. Create a structure that allows Merck to reasonably assess it's liability in the event they do choose to settle and certainty that once they do settle they won't have the same cases and claims resurface later. Again, this is doable but it takes some bold leadership on the part of progressive trial lawyers as well as creative solutions by the settlement industry.
I'll get into the specifics in a later blog, but as this story points out, Merck is winning so far and winning big. Plaintiffs haven't seen a dime and won't see a dime for years, all while their attorneys are being bled white through the successful tactics of Merck and it's defense team. Stop attacking the fortress people and take the fight to them out in the fields, thats the only real chance these plaintiffs have at this point.