Unanimous Supreme Court Allows Vioxx Securities Class Action to Proceed

NEW YORK, NY--(Marketwire - April 27, 2010) -  The United States Supreme Court, in a unanimous opinion issued today in Merck & Co., Inc. v. Reynolds, et al., No. 08-905 (U.S.), held that investors' federal securities fraud claims against defendant Merck & Co., Inc. (NYSE: MRK) were not barred by the statute of limitations. In their complaint, plaintiffs-investors allege that Merck and its senior officers fraudulently misrepresented the serious cardiovascular risks to patients associated with the use of Vioxx, the pharmaceutical company's new blockbuster drug. Merck ultimately withdrew Vioxx from the market citing safety concerns in the fall of 2004. As a result of defendants' fraud, plaintiffs allege that investors in Merck shares were misled about Vioxx, and suffered billions of dollars in losses.

In a joint statement today, the court-appointed Co-Lead Counsel for plaintiffs commented on the decision as follows:

The Supreme Court's decision today, which holds that the two year statute of limitations for securities fraud actions under the "discovery rule" does not begin to run until a plaintiff actually discovers or reasonably should have discovered that a defendant had defrauded him, represents a significant victory for Merck investors. We are very pleased that the plaintiffs and other Merck investors will have their day in court, and we look forward to pursuing their claims on the merits.

We especially applaud the portion of the Supreme Court's decision which unanimously rejected Merck's arguments that the statute of limitations for fraud can begin to run even when there is little or no evidence that a defendant acted with scienter (i.e., acted intentionally or recklessly to commit fraud). As the Supreme Court appropriately recognized, a contrary rule would effectively reward defendants who successfully conceal their involvement in fraudulent conduct, because otherwise (as Justice Breyer wrote for the Court) "so long as a defendant concealed for two years that he made a misstatement with an intent to deceive, the limitations period would expire before the plaintiff had actually discovered the fraud."

As investors have been reminded all too often in recent years, modern frauds are often highly complex and deliberately designed by corporate wrongdoers to obscure and conceal the truth. Moreover, even when there may be grounds to suspect fraudulent conduct, determining the scope of an alleged fraud -- and collecting sufficient facts to adequately plead fraud in a complaint against all culpable persons in a fraudulent scheme -- will often be a difficult and time-consuming task. By holding that the two year "discovery rule" statute of limitations period does not begin to run until a plaintiff could reasonably be expected to adequately plead all the key elements of his claim (including the defendant's fraudulent intent), the Court's ruling is a significant victory not only for Merck investors, but for all investors.

The decision is Merck & Co, Inc. v. Reynolds, et. al., No. 08-905 (U.S.)

The Co-Lead Counsel in the action are Bernstein Litowitz Berger & Grossmann LLP; Brower Piven (a professional corporation); Milberg LLP; and Stull Stull & Brody.

Contact Information:

For more information:

William C. Fredericks
Bernstein Litowitz Berger & Grossmann LLP
(212) 554-1405
wfredericks@blbglaw.com

David Brower
Brower Piven (a professional corporation)
(212) 501-9000
Brower@browerpiven.com

Richard Weiss
Milberg LLP
(212) 594-5300
rweiss@milberg.com

Mark Levine
Stull Stull & Brody LLP
(212) 687-7230
Mlevine@ssbny.com