The U.S. Supreme Court has ruled that a securities fraud lawsuit can proceed against Merck over the pharmaceutical company's disclosures to investors about its withdrawn Vioxx pain drug. Find the opinion here.
A full discussion is on Wiki here.
The justices unanimously upheld a ruling by a U.S. appeals court that allowed the lawsuit seeking billions of dollars in damages to go forward. The appeals court held the claims were not time-barred under the statute of limitations.
The securities fraud lawsuit was unrelated to the $4.85 billion settlement in 2007 between Merck and plaintiffs who filed personal injury lawsuits against the company over Vioxx.
A federal judge initially dismissed the lawsuit and ruled the investors had waited too long, more than two years, to file the lawsuit after the first warnings that Vioxx might be unsafe.
But the appeals court in Philadelphia disagreed and ruled the two-year limitations period does not begin to run until the plaintiffs have actual knowledge the defendant intended to mislead investors.