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Manhattan Moment: Win or lose, trial lawyers get millions in Vioxx fees

Washington Examiner, August 17, 2011

By:Ted Frank 

A final sordid chapter in the tort litigation over Vioxx closed, as Judge Eldon Fallon divvied up $315 million to be paid to the plaintiffs' attorneys who worked on the class-action suit.

This sum was in addition to the more than $1.2 billion already paid to such attorneys. When you add in what Merck paid to plaintiffs and for its own attorneys, the Vioxx litigation cost it more than $7 billion.

Yet Merck almost certainly did not do anything wrong. Even as an unsympathetic corporate defendant, it won the vast majority of cases that went to trial, and another dozen or more that plaintiffs' attorneys dismissed on the eve of trial rather than risk the publicity of a certain loss.

Even in the handful of cases that Merck lost at trial, such as the $253 million verdict in the Ernst case that generated much of the publicity that led to tens of thousands of cases being filed, Merck won reversals of most of those on appeal because the verdicts were based on conclusory junk-science expert testimony that should not have been admitted into evidence.

Take, for example, the case of Leonel Garza, one of the few cases plaintiffs won at trial. Garza, who was said by plaintiffs to have taken Vioxx for three weeks, was a 71-year-old overweight smoker, with high cholesterol, decades of heart disease, and a history of a heart attack and a quadruple bypass, yet a jury awarded his survivors $7 million in "compensatory" damages, and punitive damages to boot.

But even that story understates how ludicrous the verdict was. Garza never had a prescription for Vioxx. Garza's widow testified that Dr. Michael

Evans gave her husband an eight-day sample of Vioxx in a brown vial, and that then Dr. Juan Posada gave her husband two more vials filled with 15 pills each and told him to return in 30 days.

But the Garza family never produced these brown vials: Garza's son testified at trial he threw them away. (Both Garza family members' testimony contradicted their deposition testimony.)

In turn, Posada testified that he never gave 30 day's worth of Vioxx, and never gave Vioxx to Garza. Evans testified he gave out samples only in eight-pill blister-packs. Nevertheless, the jury bought the "brown vial" theory, and held Merck liable.

How could the jury possibly vote 10-2 against Merck based on such evidence? One possible reason was that Garza's widow had given one of the jurors an interest-free loan, and was in regular contact with him by cell phone during the trial. This juror misconduct resulted in a reversal on appeal.

Yet, despite the fact that Garza lost in Texas state court, Judge Fallon awarded his attorneys $2.7 million for their "salutary effect on the Vioxx litigation" in federal court. It now seems that contingency-fee attorneys' "contingencies" entitle them to millions even when they lose.

We can't be happy with this system. Merck settled cases it would have won because it would have cost far more than $5 billion for them to defend the lawsuits; attorneys who brought these meritless claims walked away with more than $1.5 billion, receiving millions even for plainly bogus cases like Garza's.

Even if you think Vioxx users should receive compensation, the "victims" of Vioxx received less than half of the $7 billion spent on the litigation, with the rest going to attorneys.

In these desperate economic times, we're looking for ways to stimulate the economy. One cheap way to do so without increasing government debt is to stop making it profitable for class-action trial lawyers to bring meritless cases that impose what is effectively a multibillion-dollar litigation tax on productive sectors of the economy.

We can't litigate our way to prosperity.

Ted Frank is an adjunct fellow with the Manhattan Institute's Center for Legal Policy and editor of the institute's award-winning web magazine, PointofLaw.com.