Saturday, April 22, 2006

Merck got a slap on the wrist

Starr County is known to give out ridiculous awards in civil suits. If you are going up against deep pockets, you want to somehow fall under the jurisdiction of one of their courts. Juries are likely to find against the deep pockets whether or not they had anything to do with the wrong and give out a huge award.
In the $1 Billion Vioxx case, the jury found against Merck and awarded $32 million in damages. The award breaks down into $25 million for punitive damages and $7 million for actual damages. However, since we have a cap on punitive damages at $750,000, Merck won't have to sweat most of the $32 million. This is a long ways off from the $1 Billion the family was seeking. Combined, the award is 0.775% of what they sought. It's a loss, but not a major loss. Of course, there will be appeals, which could overturn the decision or send it back for retrial. What will definitely be changed is the punitive damages award. The appeals court will reduce that to the maximum allowable.
This is bad for Merck because it lowers the bar for future lawsuits. In this case, the Vioxx user had only taken the drug for one month. In similar cases, juries found Merck not liable.
Adj. Prof. Israel Ramon, my Biz Law teacher, tells us that you never know how things will turn out in a trial. In his estimation, all you can do is take a shot and hope for the best. Many times, it's not a legal question, it's how the jury perceives the case.

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