Wednesday, August 17, 2011

Our broken legal system on display

I'm infuriated to read about the ongoing compensation awarded to lawyers and law firms in connection with tort litigation over Vioxx, an anti-inflammatory drug produced by Merck & Co. that allegedly caused injury and death to some who took it. The Washington Examiner reports:

Merck almost certainly did not do anything wrong. Even as an unsympathetic corporate defendant, it won the vast majority of cases that went to trial, and another dozen or more that plaintiffs' attorneys dismissed on the eve of trial rather than risk the publicity of a certain loss.

Even in the handful of cases that Merck lost at trial, such as the $253 million verdict in the Ernst case that generated much of the publicity that led to tens of thousands of cases being filed, Merck won reversals of most of those on appeal because the verdicts were based on conclusory junk-science expert testimony that should not have been admitted into evidence.

Take, for example, the case of Leonel Garza, one of the few cases plaintiffs won at trial. Garza, who was said by plaintiffs to have taken Vioxx for three weeks, was a 71-year-old overweight smoker, with high cholesterol, decades of heart disease, and a history of a heart attack and a quadruple bypass, yet a jury awarded his survivors $7 million in "compensatory" damages, and punitive damages to boot.

But even that story understates how ludicrous the verdict was. Garza never had a prescription for Vioxx. Garza's widow testified that Dr. Michael Evans gave her husband an eight-day sample of Vioxx in a brown vial, and that then Dr. Juan Posada gave her husband two more vials filled with 15 pills each and told him to return in 30 days.

But the Garza family never produced these brown vials: Garza's son testified at trial he threw them away. (Both Garza family members' testimony contradicted their deposition testimony.)

In turn, Posada testified that he never gave 30 day's worth of Vioxx, and never gave Vioxx to Garza. Evans testified he gave out samples only in eight-pill blister-packs. Nevertheless, the jury bought the "brown vial" theory, and held Merck liable.

How could the jury possibly vote 10-2 against Merck based on such evidence? One possible reason was that Garza's widow had given one of the jurors an interest-free loan, and was in regular contact with him by cell phone during the trial. This juror misconduct resulted in a reversal on appeal.

Yet, despite the fact that Garza lost in Texas state court, Judge Fallon awarded his attorneys $2.7 million for their "salutary effect on the Vioxx litigation" in federal court. It now seems that contingency-fee attorneys' "contingencies" entitle them to millions even when they lose.

We can't be happy with this system. Merck settled cases it would have won because it would have cost far more than $5 billion for them to defend the lawsuits; attorneys who brought these meritless claims walked away with more than $1.5 billion, receiving millions even for plainly bogus cases like Garza's.

Even if you think Vioxx users should receive compensation, the "victims" of Vioxx received less than half of the $7 billion spent on the litigation, with the rest going to attorneys.

There's more at the link. Bold print is my emphasis.

So lawyers pocketed more than $3.5 billion of the settlement, leaving less than that to be divided among the victims of the Vioxx blunder. If that isn't an absolutely sickening miscarriage of justice in itself, I don't know what is! More and more, I find myself in agreement with those calling for swingeing and drastic tort reform in the USA. It's no longer an issue of legal fairness or justice - it's a financial albatross around the economy's neck. When doctors have to pay well into six figures annually for malpractice insurance; when companies have to take out insurance against lawsuits and/or set aside large sums of money against such contingencies; when lawyers siphon off so much money that the productive sector of the economy suffers; and when damages awards bear little or no relation to the actual costs incurred by, or expected to be incurred by, the plaintiffs . . . it's long gone time for reform.



Anonymous said...

The chilling effect gets worse: an art teacher of thirty years carries extra insurance for the possibility that she might be sued for malpractice, people refuse to volunteer for town commissions over fear of law suits against the town, a historical society carries extra insurance for a fundraiser, a farmer's market refuses to allow a church to sell baked goods at its table. All directly due to the fear/cost of legal action, all things that I observed or happened to me. The monetary and social cost is very great.

Old NFO said...

I agree, and acair is right! The costs are untold due to this.

Anonymous said...

A friend of mine used to work for the same law firms that dealt with women who claimed that they had suffered harmful side effects as a result of taking birth control.

Believe it or not, women who smoked, had high blood pressure, family history of blood clots, etc., were thrown out of the suit.

As I said, small consolation...