JURIST Guest Columnist Benjamin Zipursky of Fordham University School of Law says that the ongoing Vioxx litigation is exposing serious shortcomings in America's products liability system…

In August, a jury in Texas arrived at a huge verdict of $253 million against Merck Pharmaceutical Company, reportedly aiming to “send a message” to Merck that it is wrong to put profits over human life. The wife of Robert Ernst alleged that Merck’s top-selling pain reliever, Vioxx, had killed her husband by causing him to have a heart attack. Her lawyers presented evidence that Merck knew that Vioxx greatly increased the risk of blood-clotting and heart attacks, but concealed this information to maintain its lucrative share of the pain-killer market. The jury, a fairly educated group from the suburbs of Houston who heard weeks of testimony and saw numerous Merck documents, was ultimately persuaded by the plaintiff’s case and unimpressed by Merck’s counterarguments. Although more than 85% of the verdict will be thrown out because of a Texas statutory cap on punitive damages, Mrs. Ernst’s verdict may still remain over $25 million.

The Ernst case might therefore seem to be a vindication of American products liability law. After all, a major company was found out, and the people of the community were permitted to see the evidence and then make their decision. A widow was compensated and a big company called to task. There are many — perhaps thousands — of trials ahead, but Merck will not lose as resoundingly in all of them. Indeed, in two recent cases Merck obtained a clean victory in one and a mistrial in the other. So the Vioxx litigation — at least at the moment — might seem troubling for Merck, but not necessarily indicative of a product liability law that needs to be fixed. In fact, one might argue that we are seeing the system in action, producing results, sending incentives to companies, and compensating victims.

Unfortunately, the Vioxx litigation does not merit such complacency. On the contrary, it serves once again to expose numerous serious shortcomings in our system.

First, and most importantly, products liability law is supposed to guide companies to make the safest products they can and, where significant risks remain, our legal system is designed to lead companies to warn and educate consumers of those risks. Although not all of the evidence is in, it now appears that these critical safety and information disclosure goals of our system failed in the case of Vioxx. Reporters and plaintiffs’ lawyers have put forward broad and powerful allegations that Merck deliberately refrained from disclosing information that might have greatly benefited patients and physicians. Merck had intelligent lawyers and business people who were aware that our products liability system expects companies to air concerns that reasonable physicians and patients would want to weigh in the balance. Surely, Mercks’ lawyers and executives knew what liability could look like if their fears played out the wrong way, and the evidence came in concretely against Vioxx. Whether they were right or wrong, imprudent or prudent, Mercks’ decision makers were not effectively guided by tort law’s incentives. In that sense, the very existence of this batch of cases is some evidence that our tort law — and the FDA regulatory system with which it works in tandem — is not functioning well.

Second, those aspects of Merck’s behavior that do appear to have been precipitated by the products liability system — their decision to pull the drug off the market for everyone — are troubling in the other direction. It may be that there are patients and physicians who would reasonably select Vioxx, even when fully informed, because their constellation of health problems and risk factors is such that the increased risks of cardiovascular disease does not undermine the reasonableness of taking the drug, all considered.

Third, the compensation of victims and the liability for Merck are rough justice in only the very roughest way. Mrs. Ernst, the only successful plaintiff so far, had just over $450,000 in actual lost income but managed to receive $24 million in non-pecuniary damages. Texas, unlike most jurisdictions, permits a surviving family member to ask the jury for two separate sums of money relating to non-pecuniary loss — one that supposedly represents the value of loss of companionship, and one that supposedly represents compensation for grief. The jury conveniently awarded $12 million for each. Mrs. Ernst had been married to her husband for less than one year. There is nothing reasonable about this compensation, which will make Mrs. Ernst an extremely rich woman. The very next plaintiff to go trial received 0.

Perhaps more surprising than the amounts in the first two trials was the weakness of each case. Both plaintiffs had taken the drug for much shorter periods of time than those which would support a strong causal connection between their cardiac events and the Vioxx. So both were weak cases. There are, of course, much stronger cases on causation out there, but they have not yet come to trial. It appears, thus far, that we have had a gargantuan victory, a complete defeat, and a mistrial in three cases, all of which were weak on liability. And the aforementioned concerns do not even address the social costs, industry costs, and ultimately consumer costs that this massive litigation generates, and its inefficiency as a system of indirect insurance.

In brief, while the Vioxx litigation is a splashy spectacle that importantly attracts the public’s attention to dangers in pharmaceutical products and corporate concealment, our system gets lower grades on its capacity to achieve other values: deterrence-capacity, fair compensation, truth, and efficiency. Which is not to say that we should diminish or eliminate such actions: on the contrary, it is the power of private parties to jar an entrenched regulatory structure that plays a critically important political role. But we should be more sanguine about the need to look to other forms of law to accomplish what are usually seen as goals of products liability law: greater regulation, greater insurance, and more intelligent crafting our products liability doctrine.

Benjamin Zipursky is a professor at Fordham University School of Law.
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