Merck May Face Criminal Probe in New Jersey

Although New Jersey is the home state of Merck & Co., there is very little else about the “Garden State” that favors the pharmaceutical giant these days.

In addition to being the site of some 5,000 Vioxx personal injury and wrongful death cases, a Vioxx-related class-action involving treble damages by third-party drug plans, and a judge (who just doesn’t seem to like Merck, its attorneys, or its “damn the torpedoes” approach of refusing to discuss the possible settlement of any Vioxx case), New Jersey may also present another obstacle to the drug maker’s efforts to regain credibility and financial stability.

As we pointed out only yesterday, the $9 million punitive damage award in the latest Vioxx personal injury trial carries with it a host of extremely onerous implications from an economic perspective. In addition, however, that finding by the jury has another potentially damaging and embarrassing aspect for Merck.


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Some states, like New Jersey have statutes that require cases where punitive damages are awarded to be referred to prosecutorial agencies for investigation into whether any crimes were committed.

In New Jersey, the statute states: “2A:15-5.17. Record referred for criminal investigation …Upon the conclusion of any action in which punitive damages have been awarded, the court shall refer the record of that action to the prosecutor of the county in which the case was tried and to the Attorney General for investigation as to whether a criminal act has been committed by the defendant.”

This is the first time punitive damages have been awarded against a pharmaceutical manufacturer pursuant to the 11-year-old New Jersey Punitive Damages Act. Nonetheless, the “referral” provision with respect to the criminal investigation requirement is absolute and does not provide for exceptions.

Merck’s stated intention to appeal both the compensatory and punitive aspects of the jury’s verdict does not stay the referral to the Attorney General. It may, however, delay action by the state’s highest law enforcement officer until a final determination is made as to whether the punitive damage finding is affirmed.

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