Vioxx Shareholders Suit on U.S. Supreme Court’s 2009-2010 Docket

The fate of Merck & Co. shareholders who sued the drug maker for securities fraud after its blockbuster pain pill Vioxx was pulled from the market amid reports of heart attack risks will be decided next year by the highest court in the land.

The landmark lawsuit is among the high-profile cases the U.S. Supreme Court announced Monday that it will consider during the next term, which began today. A ruling on the lawsuit is expected before June 2010. No date has been announced for attorney arguments.

The Supreme Court is expected to rule on a lawsuit centered on the question of whether Merck provided adequate information about Vioxx’s risks to company shareholders. More specifically, the court is being asked to decide whether the shareholders violated a statute of limitations by waiting too long to file their suits.

Some court watchers say the Supremes could use the Merck case to decide the broader legal question of what constitutes proper notice to investors under securities laws.

Vioxx was approved in 1999 but pulled from the United States market in 2004 after medical studies found it more than doubled the risks of heart attack and stroke. From 1999 through 2003, the painkiller was linked to at least 27,000 heart attacks and sudden cardiac deaths in the U.S.

Did Investors Sit on their Rights?

Merck says it publicized Vioxx’s dangers two years before the lawsuit was filed and that the plaintiffs therefore waited too long to bring their lawsuit on fraud claims. Congress has set time limits for when investors can sue companies for securities fraud, but the Supreme Court must decide when the clock starts ticking, according to the Associated Press.

“The business community wants that to start very early — as soon as there are warnings in the press,” said Donald Langevoort, an expert in securities law at Georgetown University Law Center. “The argument in this case says that if you apply that too strictly, you’ll have a rush to bring lawsuits.”

Statutes of Limitation

Statutes of limitation are in place for a reason. Primarily, the filing deadlines are designed to encourage parties to lawsuits to bring their legal claims to court sooner rather than later in order to encourage the interests of justice. When a plaintiff waits too long to bring their claims to court, key evidence and witnesses may be lost or destroyed and other problems may arise that can interfere with the rights of the parties to have a fair trial.

The deadlines can be controversial, too. Sometimes, victims of defective products or dangerous drugs wait too long to file their claims, only to have their cases thrown out of court on a legal technicality.

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