Pharmaceutical company Merck & Co. must now face a shareholders’ lawsuit over its former blockbuster painkiller Vioxx. A federal appeals court reinstated the lawsuit which had been dismissed by a lower court. A three-judge panel from the Third Circuit Court of Appeals voted 2-1 to reinstate a class action securities lawsuit that had been dismissed in April 2007 by U.S. District Judge Stanley R. Chesler in Newark, New Jersey. The ruling will give thousands, perhaps tens of thousands, of Plaintiffs an opportunity to finally have a court hear their claims that Merck concealed the risks of Vioxx.
Judge Chesler had dismissed the lawsuit, filed in November 2003, ruling that all the Plaintiffs’ claims were time-barred under the statute of limitation. Investors had charged Merck with providing misleading information or omitting information about the risks involved with Vioxx. In the ruling, two appellate judges concluded the Plaintiffs filed suit within the legal time limit to do so because amid early signs of trouble with Vioxx, Merck was still reassuring investors about the safety of Vioxx and financial analysts were projecting growth in sales.
Unless Merck is able to get the full Court of Appeals or the U.S. Supreme Court to review the divided decision to change the result, this case would return to Judge Chesler. Lawyers on each side will then begin trial preparation. This result has no effect on the $4.85 billion settlement that would end roughly 50,000 personal injury lawsuits from Vioxx users or their survivors. That is an entirely different matter.
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