No class-action status for federal Vioxx suits

Federal judge in New Orleans denies motion to combine personal injury and wrongful death cases.


NEW YORK (CNN/Reuters) -- A federal judge on Wednesday denied a motion for class-action status for personal injury and wrongful death cases involving Merck's withdrawn Vioxx painkiller.

Judge Eldon Fallon of New Orleans, who is overseeing federal lawsuits involving Vioxx, denied a request by plaintiffs' attorneys for the class-action status. Analysts said this could provide a boon for Merck, and it's what the company's been going for all along.

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"Obviously that benefits Merck," said Jon LeCroy, analyst for Natexis Bleichroeder. "This essentially eliminates the super-frivolous lawsuits. This reduces the total number of claimants that are out there."

About 24,000 lawsuits have been filed by former users of Vioxx who allege to have been harmed by the drug, which Merck (Charts) withdrew in 2004 after it was shown to increase the risk of heart attacks.

LeCroy said that lumping together all the federal lawsuits wouldn't work, since the thousands of plaintiffs have varying degrees of healthiness - ranging from obese to healthy - and have taken Vioxx for different periods of time.

"To block all those together wouldn't be appropriate legally," said LeCroy.

Merck has vowed to fight the lawsuits one by one rather than agree to a costly group settlement with the plaintiffs - such as the one struck by Wyeth (Charts) over its withdrawn "fen-phen" diet drugs.

Ted Mayer, an outside counsel for Merck, told CNNMoney.com that he was pleased with Judge Fallon's dismissal of the class action status because it "is very consistent with what we've been saying all along and our strategy in addressing each of these cases one by one on individual merit."

Class-action status would have given the Vioxx plaintiffs more leverage in their fight against Merck, by allowing attorneys to sue on behalf of all individuals alleging harm.

"[Elimination of class-action status] is going to make it harder for plaintiffs to come through with one big settlement," said Bryan Liang, professor of health law studies at California Western School of Law. "[Merck] wants to make it difficult and as costly as possible to fight each case. The more barriers they put up, the more of a disincentive it is for plaintiffs to fight the case."

Liang said that Judge Fallon's action was probably prompted by the verdict handed down in his courtroom on Nov. 15, when the jury found that Merck had adequately warned of the risks associated with Vioxx.

Of 11 Vioxx lawsuits that have gone to jury verdicts, Merck has won seven. However, a New Jersey state court judge ordered one of the victories to be retried after ruling that some new evidence had come to light.

Some industry analysts have speculated Merck's eventual liability over Vioxx will exceed $5 billion. To date, the company has taken combined charges of about $1.28 billion to cover litigation expenses but has not yet paid any damages to plaintiffs.

Merck shares traded up 0.6 percent in afternoon NYSE trade, after being in negative territory earlier.

CNNMoney.com staff writer Aaron Smith contributed to this report.

LeCroy and Liang do not own shares of Merck stock and are not involved in the litigation.


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-- Reuters contributed to this story.
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.