Judge throws out $51 mln Vioxx award as excessive

By Peter Henderson and Bill Berkrot

NEW ORLEANS/NEW YORK (Reuters) - A judge on Wednesday threw out a $51 million jury award against Merck & Co. Inc., calling it excessive for a former FBI agent who suffered a heart attack while using the drug maker's Vioxx painkiller and ordered a new trial on damages.

In a written ruling, U.S. District Court Judge Eldon Fallon found that the jury's findings on Merck's liability were reasonable, but that their $50 million compensatory damage assessment was not.

The new trial will also reconsider the punitive damages award of $1 million in the case, although the federal judge did not take issue with that award.

"The court finds that the $50 million compensatory damages award is excessive under any conceivable substantive standard of excessiveness," Fallon wrote.

The federal jury on August 17 awarded the $51 million to Gerald Barnett -- a 62-year-old retired Federal Bureau of Investigation agent who had a heart attack in 2002 after taking Vioxx for 31 months -- after finding that Merck knowingly misrepresented or failed to disclose a material fact regarding Vioxx safety to the plaintiff's physician.

Fallon ruled that a new trial on all damages was necessary, citing a previous case requiring reconsideration of both awards when compensatory damages are reviewed.

Steve Brozak, an analyst at WBB Securities, said the judge's decision to throw out the award sends a message to other Vioxx plaintiffs that they will need to fight long and hard to get money out of Merck.

"It's hard enough for plaintiffs to win a jury verdict, but today's ruling is a reminder they also have to deal with the uncertainty and expense of the appeals process," Brozak said.

The judge's action is further validation of Merck's defense strategy of fighting each Vioxx case one by one, rather than agreeing to a costly national settlement, Brozak said.

"We are pleased that the court agreed that the compensatory damages awarded were excessive and bore no relationship to the evidence presented in trial," Merck's outside counsel Phil Beck said in a statement.

Merck, which pulled Vioxx from the market in September of 2004 after a study found the drug doubled the risk of heart attack and stroke in long-term users, is facing more than 14,200 Vioxx product liability lawsuits.

Fallon wrote that the evidence suggested Barnett may have lost nine or 10 years of life expectancy as a result of using Vioxx. Barnett was due compensation for medical bills, pain and suffering and intangible losses, but he was retired and could not claim for lost wages, the judge wrote.

"It appears that he has been able to return to many of his daily activities. Therefore, no reasonable jury could have found that the plaintiff's losses totaled $50 million," Fallon concluded.

Merck shares closed down 9 cents at $40.80 on the New York Stock Exchange.

(Additional reporting by Ransdell Pierson in New York and Matt Daily in Houston)

Source Reuters