Merck's Future Rides on Jury

In New Jersey, Merck may have the better lawyers. Merck certainly isn't facing any pushover. Plaintiff's attorney Chris Seeger is fresh off a June victory over Eli Lilly(LLY Quote), in which he won a $690 million settlement in a case involving Lilly's anti-psychosis drug Zyprexa, and he's the lead plaintiff's lawyer for 2,475 Vioxx lawsuits pending in New Jersey.

But in Merck defense attorney Diane Sullivan, the drug company has someone who can more than hold her own. Sullivan repeatedly has been willing to push the envelope. On the trial's first day, she earned Judge Carol Higbee's rebuke for reminding the jurors that Merck was a hometown New Jersey company.

She has made repeated attempts -- with partial success -- to get a long U.S. Food and Drug Administration memo (saying that Vioxx doesn't appear to cause heart attacks in short-term users like Humeston) in front of jurors. On occasion, she has made Higbee look hostile to Merck. That can't hurt with jurors, who might sympathize with the company if they think it is not getting a fair hearing, and it lays the grounds for a future appeal if the verdict goes against the company.

New Jersey legal rules favor corporate defendants like Merck. Under the state's product liability law, to win punitive damages the plaintiff needs to prove that the company knowingly withheld or misrepresented information material relevant to the harm in question. So much of the New Jersey trial has hinged on what Merck told the FDA. If Merck passed along all reliable, relevant data to the agency and the agency approved the drug without seeking a warning label, that would go a long way to making the drug giant's case. (This is also why Sullivan fought so hard to get the FDA memo in front of the jury.)

Even if Merck loses, the New Jersey system requires a separate proceeding, with jury, to set punitive damages. One part of the New Jersey law that Merck won't like, if it loses this trial, is a provision that requires the court to refer the case to state and local prosecutors to determine whether Merck committed a criminal act.