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Don't bet on Merck's homefield advantage
While drugmaker won't face anti-corporate hostility it did in Texas, jurors will still be skeptical.
September 8, 2005: 5:11 PM EDT
By Aaron Smith, CNN/Money staff writer

NEW YORK (CNN/Money) - After falling flat on its face in the first Vioxx trial in Texas, Merck is likely to face a less hostile group of potential jurors when the drugmaker heads to court next week in its home state of New Jersey.

But New Jersey jurors are unlikely to rally behind the nation's No. 2 drugmaker out of Garden State solidarity, according to legal experts.

"Some companies are more hated in their home area than they are in other parts of the country," said Phil Anthony, an attorney and CEO of trial research firm DecisionQuest.

"My guess is that the jurors aren't going to stand up and say we have to defend our home town company. My guess is that it's going to be a neutral jury pool."

But Dr. Bryan Liang, an expert in health law at California Western School of Law, said that in the upcoming case Merck (down $0.06 to $29.19, Research) could benefit since many drug companies, including Johnson & Johnson (down $0.70 to $64.10, Research), Schering-Plough (up $0.07 to $22.45, Research) and Wyeth (down $0.57 to $45.94, Research), are based in New Jersey.

"In Texas, you don't have any of that," said Dr. Liang. "In Texas, there's significant bias against what's considered an out-of-town evil drug company. But in New Jersey, you actually know people who work at Merck and Pfizer, so it puts a human face on it. It's not big, bad pharma; it's my neighbor Joe."

Merck faces more than 4,200 lawsuits related to Vioxx, the arthritis painkiller it pulled off the market nearly a year ago after studies showed increased risk of heart attacks and strokes for patients taking the drug for at least 18 months. More than half of the suits have been filed in New Jersey, many of them by out-of-state plaintiffs.

The first of these, whose case is going to trial next week, Idaho postal worker Frederick Humeston, blames Vioxx for his 2001 heart attack. Jury selection in the civil trial is due to start on Monday in state court in Atlantic City.

Merck is based in Whitehouse Station, an affluent community of 2,000 residents in the northern part of the state. The jury pool will come from Atlantic City, a resort town of 40,000 people known for its casinos along the state's southern coast.

Many of the potential jurors in the first Vioxx case to go to trial, in Angleton, Texas, a city of about 20,000 near Houston, tend to hate corporations, said Anthony, a factor that was understood by plaintiff lawyer Mark Lanier but seemed lost on Merck.

"Juries outside Dallas and Houston are fairly well known to be anti-big business, anti-big corporation and very focused on wanting to know about the corporate behavior of any given party," said Anthony. "You've got a frustrated population that's at the lower end of the economic scale and they find reasons to be angry at the corporations. It's surprising to me that Merck was not aware of that fact."

Lanier spent much of his court time focusing on Merck's alleged misdeeds. Asked about his legal strategy in a recent interview, Lanier said, "Merck's behavior, in my mind, was tantamount to negligent homicide. They were going to kill people and they knew it."

The jury awarded plaintiff Carol Ernst $243 million, though Texas law prevents her from collecting damages that high. "When the dust settles there will be $26.3 million at 10 percent interest annually," said Lanier. "I'm not sure Ms. Ernst will see any of that for the next five years."

Winning minds, not hearts, in Jersey

Legal experts say Texas jurors proved susceptible to Lanier's portrayals of Ernst as a struggling, sympathetic underdog whose true love was killed by a rich, uncaring corporation, largely ignoring Merck's scientific arguments that the company felt exempted it from blame.

"In the actual verdict, there was no causation," said Liang, the legal expert from California. "Merck was arguing the law and jurors were listening to the human story. Juries are made of human beings and that's what they [Merck's legal team] missed."

In the end, Lanier's portrayal proved more powerful than Merck's insistence on using numbers and science to try to prove that it was not to blame.

"[Lanier] knew he was going to be in an environment that would be enormously hostile to big corporations," said Anthony. "That's why he filed the case in Angleton, Texas. And it looks like Merck did nothing to inoculate themselves against what they should have known to be the hostility that would exist against corporations."

Tugging the heartstrings of New Jersey jurors is unlikely to produce the same affect, said Anthony, adding, however, that jurors probably won't give Merck the home field advantage either.

"There isn't going to be the negative emotion and hostility towards Merck in Atlantic City that you would find in Texas," said Anthony. "[The jurors] are not going to start out with an instantaneous negative view of Merck as a corporation. They're going to be more likely to listen to the statistics."

Humeston, a twice-wounded Vietnam veteran, took Vioxx as a painkiller after he suffered a work injury to his right knee and continued to take the drug when it reduced pain in his shrapnel-peppered left knee, according to papers filed by Merck lawyers. Humeston blames Vioxx for causing a blood clot that lead to his 2001 heart attack.

"It's a sympathetic case," said Humeston's lawyer, Chris Seeger. "It's a guy who survived everything: Vietnam, mountain climbing, and then he got knocked out by Vioxx."

As far as playing to the sympathies of the jurors, Seeger is not expecting to run into Texas-style anti-corporate bias in Atlantic City. "The jury in Atlantic County is truly a middle of the road jury," said Seeger. "There is not a anti-company bias and there is not anti-plaintiff bias. It's neutral."

Merck lawyers insist that Vioxx did not cause Humeston's heart attack.

"The clinical study Merck conducted that lead it to voluntarily withdraw the drug only revealed an increased risk after 18 months of daily use," said Jim Fitzpatrick, an outside counsel representing Merck in the New Jersey trial. "Mr. Humeston only took Vioxx intermittently for less than two months. The science just isn't there to support his claim."

Federal cases sunk in Big Easy

Merck also faces about 1,800 federal cases, filed through New Orleans district court under Judge Eldon Fallon, who projected that the number of lawsuits could eventually swell to 100,000. The first federal case was originally slated to begin on Nov. 28, but that was before Hurricane Katrina. The courthouse phones were still down Thursday.

Based on Fallon's projection, David Moskowitz at Friedman, Billings, Ramsey & Co. has projected that total product liability from Vioxx could total $50 billion. And while Merck lawyers have vowed to fight each case, they've said recently they might settle some cases involving long-term Vioxx users.

Merck stock, meanwhile, has lost more than a third of its value over the last year.

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