Illinois Lawyer Blog

Pharmaceutical giant Merck has agreed in principle to settle all remaining Vioxx lawsuits. The company has agreed to pay $4.85 billion to plaintiffs in 27,000 pending cases. The settlement was cobbled together after juries from New Jersey to California had heard about 20 cases. In the very first case a jury awarded $253 million dollars, but Merck had prevailed in the other cases.

According to published reports, Merck's legal bills for the Vioxx litigation were running over $600 million dollars a year. The proposed agreement has to be accepted by 85% of those persons with pending cases. Lawyers involved in the litigation have indicated they are confident the deal will be finalized. Each plaintiff will receive an amount of money commensurate with the severity of his injuries. Published reports have estimated that the remaining 27,000 cases involve 47,000 plaintiffs. On average, each plaintiff then would receive approximately $100,000. Those persons who don't want to take the deal can pursue their own claims.

The settlement does not, however, terminate pending criminal investigations against Merck. Several states, as well as the Department of Justice, are investigating Merck's behavior. Although Merck withdrew the drug from the market in 2004, internal Merck documents showed the Merck scientists had voiced concerns about potential adverse health consequences years earlier. In addition, a large clinical trial in 2000 raised concerns about Vioxx.

The kicker? The settlement represents less than one year's profits for Merck.

The Louisiana Attorney General, Charles Foti, recently filed suit against Allstate and State Farm, accusing the two companies of conspiring to limit payments to policyholders after Louisiana was pounded by hurricanes Katrina and Rita. The lawsuit alleges that the two companies worked together to manipulate damages estimates and to low ball claimants who suffered damages. Specifically the lawsuit alleges that the companies edited engineering reports and delayed payments, forcing policyholders to go to court to challenge estimates. In the event Mr. Foti needs any help with these varmints, he should get in touch with Mississippi Senator Trent Lott. Senator Lott recently pledged a solemn vow to go medieval on those nasty insurance companies for the way they have mistreated policyholders.

The First Appellate Court recently came down with an interesting decision involving the Illinois Whistleblower Act, 740 ILCS 174/1. In Callahan v. Edgewater Care, the plaintiff, Melissa Callahan, claimed that she was fired from her position as an admissions clerk in a nursing home for reporting activity that she felt was in violation of state law. Specifically, Callahan alleged that she was discharged for reporting to two supervisors that one of the residents was being kept in the facility against his will. After her discharge, plaintiff filed a retaliatory discharge lawsuit. The defendants filed a Motion to Dismiss, arguing that the enactment of the Whistleblower Act preempted her retaliatory case. Defendant's Motion was granted. Ms. Callahan appealed.

The Appellate Court noted that the Whistleblower Act[effective 1/1/04] prohibits an employer from retaliating against an employee for disclosing information to a government or law enforcement authority where the employee believes the information discloses a violation of State of Federal law. The Court went on to note that a violation of the Act may result in 1) reinstatement of the employee; 2) back pay, with interest; and 3) compensatory damages including litigation fees, expert fees and attorney fees. The Defendant argued that the Whistleblower Act had, by implication, preempted existing common law remedies available to employees discharged for their activities. The Court found absolutely no support for defendant's position and reversed the trial judge's decision.

The enactment of the Whistleblower Act will provide some additional relief to employees who report misconduct to superiors. Traditionally, in order to prevail in a retaliatory discharge claim, an employee had to show 1) he was discharged for his activities and 2) that the discharge violated public policy. Certain courts however, were overly strict in exactly what constituted a violation of public policy and otherwise valid claims were dismissed. Now employees have another avenue of recovery available.