As widely reported in the press last week, the Supreme Court of Texas has reversed a pro-plaintiff jury verdict in one of the bellwether trials in the Vioxx pharmaceutical litigation and rendered judgment itself that the plaintiffs take nothing. See Merck & Co., Inc. v. Garza, No. 09-0073 (Aug. 26, 2011). Standing alone, the decision is notable for its discussion of whether epidemiological evidence is scientifically reliable to prove causation. Applying its version of the Daubert standard for expert evidence, the Supreme Court of Texas held that the plaintiffs’ epidemiological evidence was unreliable because the underlying studies did not show a “statistically significant doubling of the relative risk” for patients exposed to ”substantially similar” usage/dosage conditions as the decedent. But the decision also illustrates a broader point that should not be forgotten as courts are increasingly utilizing bellwether trial procedures in complex mass tort litigation.
During the course of the Vioxx litigation, approximately 19 bellwether trials were held (6 in the federal MDL, the remaining 13 in various state courts). The Garza case in Texas state court was one of the few that the plaintiffs won; the jury awarded the plaintiffs $32 million, though the trial court reduced the award to the statutory maximum of $750,000 based on a state law limiting non-economic damages to that amount. Because the purpose of bellwether trials is to provide the parties with real-world information about the strengths and weaknesses of those claims and defenses that are presented in a wider collection of related lawsuits, there is no doubt that the plaintiffs’ liaison counsel tasked by the federal MDL judge with attempting to negotiate a global settlement of the Vioxx litigation pointed to the Garza verdict to strengthen their hand in the negotiations. And, indeed, the Vioxx litigation was settled in November 2007, almost four years before the ruling last week that the Garza plaintiffs take nothing.
Although we may never know how Merck’s counsel handled the Garza verdict during the Vioxx global settlement negotiations, the lesson for future mass tort defendants is clear: pro-plaintiff verdicts in bellwether trials may need to be discounted in settlement negotiations to account for the possibility of reversal on appeal. Notwithstanding the benefits of bellwether trials, all too often the appeals process can drag on for many years, such that appeals may still be pending when an MDL judge begins to threaten to dissolve the MDL and remand cases to local federal courts if a global settlement cannot be reached. The decision by the Supreme Court of Texas in Garza is an important reminder that a nuanced approach to valuing pro-plaintiff verdicts in bellwether trials may be necessary during global settlement negotiations.
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