Securities class action filed on behalf of a class of persons and entities who purchased or otherwise acquired Merck & Co. Inc. (“Merck” or the “Company”) securities between May 21, 1999 and October 29, 2004, inclusive (the “Class Period”) arising out of the Company’s materially false and misleading statements concerning VIOXX, which was withdrawn from the market in the Fall of 2004.
On September 9, 2008, the United States Court of Appeals for the Third Circuit reversed the District Court’s dismissal of this action on statute of limitations grounds. BLB&G argued the appeal on behalf of the Plaintiffs and the Class, including Co-Lead Plaintiff and BLB&G client The Public Employees’ Retirement System of Mississippi, which intervened in the action on January 25, 2007. The Third Circuit’s decision is available here.
On January 15, 2009, in an effort to appeal the Third Circuit’s decision, the Defendants filed a petition for a writ of certiorari with the United States Supreme Court. While Defendants’ petition was pending before the Supreme Court, Co-Lead Plaintiffs continued their prosecution of the action and, on March 10, 2009, filed with the U.S. District Court for the District of New Jersey a Consolidated Fifth Amended Class Action Complaint. The Fifth Amended Complaint is available here. On March 23, 2009, Co-Lead Plaintiffs opposed the Defendants’ petition for a writ of certiorari, and on May 26, 2009, it was announced that the Supreme Court had granted Defendants’ petition. Accordingly, the issue of when the statute of limitations began to run in this action will be presented to the Supreme Court during its October 2009 term.
Background
In 2004, as the truth concerning VIOXX’s cardiovascular risks, and the diminished commercial viability of the purported “blockbuster” drug became known, the trading price of Merck securities dropped sharply. This significantly harmed investors who had purchased Merck securities during the Class Period. For example, between the worldwide withdrawal of VIOXX on September 30, 2004, and the public confirmation of Defendants’ long-held concerns about the life-threatening risks posed by VIOXX on November 1, 2004, Merck’s market capitalization fell by tens of billions of dollars.
The United States District Court for the District of New Jersey dismissed this action on statute of limitations grounds in early 2007. Merck had argued that investors had a duty to investigate the wrongdoing at Merck due to “storm warnings” of possible misconduct by Merck as early as October 2001, and that since the first investors to sue did not do so until more than two years later, the case was untimely and should be dismissed. The District Court sided with Merck, but the Third Circuit reversed that decision as erroneous. The Court of Appeals held that, as of October 2001, market analysts, scientists, the press and the U.S. Food and Drug Administration all agreed that Merck’s public explanations for the potential side effects of VIOXX were “plausible,” and “none suggested that Merck believed otherwise,” which left investors completely in the dark as to Merck’s true beliefs. As Lead Plaintiffs have alleged, Merck’s public statements that reassured investors in fact misrepresented the Defendants’ true understanding – that VIOXX caused cardiovascular events.
