U.S. Supreme Court Hears Arguments Regarding Merck Shareholder Suit
The U.S. Supreme Court heard oral arguments recently overheard oral arguments for a proposed statute of limitations for shareholder suits stemming from Merck’s withdrawn painkiller, Vioxx. Attorneys for Merck argued that the plaintiffs waited too long to file their securities fraud class action.
The Supreme Court justices did not seem persuaded by Merck’s arguments and pointed out that it would have been difficult for the plaintiffs to detect the alleged fraud within the time period as argued by Merck.
Justice Ruth Bader Ginsburg, noting that Merck initially insisted there were other explanations for the increased risk, said, “How would the most diligent plaintiffs have gone about finding out whether Merck really had no good-faith belief” in those alternate theories.
Justice Antonin Scalia also suggested that in the early stages there was “simply substantial evidence of inaccuracy,” not of the kind of fraud needed to trigger a securities suit.