Merck's Future Rides on Jury

Stock quotes in this article: MRK  

Riding on the Verdict

For these five reasons, the playing field is tilted in Merck's favor in Humeston v. Merck. If Merck loses despite that edge (or at least, that edge relative to the Texas trial), the consequences are immense.

First, 2,570 of the 6,400 Vioxx cases filed by the end of September have been moved to Judge Higbee's Atlantic City court. A loss in Humeston v. Merck will be a bad sign for Merck's ability to win these cases.

Second, while another 2,900 Vioxx cases have been consolidated in federal court, where the rules are much more favorable to defendants than they are in most state courts, a win in New Jersey would accelerate plans by lawyers for Vioxx plaintiffs to bury the company under a wave of state-court Vioxx cases.

A team of plaintiff lawyers, headed by Mark Lanier -- who else? -- and New York attorney Perry Weitz, is developing a plan to put 10 teams of lawyers to work in state courts, simultaneously. That would keep Merck in court constantly -- not an insignificant problem for a company that has set aside only $675 million for litigation expenses.

It's not clear the strategy will work. Merck can move in state courts to have cases filed outside of New Jersey moved to federal court under most circumstances, but the aggressive tactics of plaintiff lawyers before the New Jersey verdict don't bode well for Merck if it loses the Humeston case in Judge Higbee's court room.

Trial lawyers are often compared to sharks. And we all know how sharks behave once there's blood in the water.

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At the time of publication, Jim Jubak did not own or control any of the equities mentioned in this column. He does not own short positions in any stock mentioned in this column.

Jim Jubak is senior markets editor for MSN Money. He is a former senior financial editor at Worth magazine and editor of Venture magazine. Jubak was a Bagehot Business Journalism Fellow at Columbia University and has written two books: "The Worth Guide to Electronic Investing" and "In the Image of the Brain: Breaking the Barrier Between the Human Mind and Intelligent Machines." As an investor, he says he believes the conventional wisdom is always wrong -- but that he will nonetheless go with the herd if he believes there's a profit to be made. He lives in New York.





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