Drug giant Merck lost the first of 4000-odd Vioxx suits pending against it. The odds that Merck eventually ends up pulling a Johns Manville and resolving these cases via bankruptcy reorganization just went up - a lot.
The verdict was a whopping $253 million, split $24 million in compensation for wrongful death and $229 million in punitive damages. The plaintiff's lawyer conceded that the punitive component likely will be reduced in post-trial proceedings or on appeal.
Jim Copland comments:
... in essence, the jury expropriated Merck's Vioxx sales from Oct. 2001 through Feb. 2002. Though the verdict seems not to have been structured as a punitive award (Texas has a strict limitation on punitives at twice economic damages and $750,000 above noneconomic awards), it sure sounds like one.
And thousands of other Vioxx suits are pending--for which this expropriative penalty won't have any preclusive effect.
Jonathan Wilson has more on why the punitive component won't hold up. Walter Olson has links to prior discussion on the tort reform blogs. Finally, Evan Schaeffer (who I gather is litigating Vioxx cases on the plaintiff's side) writes:
One important thing to take away from today's verdict, even though it will presumably be reduced by virtue of the Texas law on punitive damages, is that this was a case perceived to have causation problems that made it virtually unwinnable for the plaintiffs. The verdict is very good news for victims of Vioxx and a terrible omen for Merck.
There has to be a better way of running the tort railroad than this.
