Supreme Court Agrees to Hear Vioxx Case
The Supreme Court has agreed to hear Merck's appeal of a 3rd Circuit decision allowing a shareholder suit over the painkiller Vioxx, in what will likely become an important case for shareholder suits of all kinds.
The question presented is when the two year statute of limitations period for shareholder suits commences. More precisely, exactly how much notice of wrongdoing is required before the statute begins to run?
Investors sued over the failed drug once product liability suits against the company began rolling in over the drug's increased risk of a heart attack, stroke or death.
The district court originally dismissed the action, but the 3rd Circuit reinstated it, saying that an internal study demonstrating the dangers of the drug and the filing of lawsuits against the company did not amount to "storm warnings" that would cause the two-year limitations period to commence.
The company claims that the statutory standard for inquiry notice has been applied "in inconsistent and irreconcilable ways." Investors argue, on the other hand, that they should not be responsible for investigating securities fraud just because a product has liability issues.
Court to consider whether to allow Vioxx lawsuits (AP)
Supreme Court Picks up Merck Appeal in Vioxx Suit (Blog of Legal Times)
Supreme Court Grants Cert in Vioxx Investor Class Action (ABA Journal)