The downside of empathy.

Merck was hit by a $235 million dollar judgment in the first Vioxx case tried to a jury verdict. While Texas has caps and that judgment will be reduced on appeal to roughly $25 million, Merck's stock price took a big hit because this was only the first of over 4,000 similar lawsuits in the pipeline. Moreover, Merck hand-picked this case to set the tone for future litigation because it was perceived as winnable, in light of the defects in the plaintiff's evidence on causation, as well as the relatively minimal compensatory damages involved--the decedent was already 59 years old, and of the working class. This excerpt features selective quotations by the wsj, but it makes a very strong case for why our products liability tort system fails to maximize economic utility by institutionalizing jury trial procedures that are susceptible to massively aberrant results:

"Merck argued that Vioxx couldn't have caused Mr. Ernst's death because, according to his death certificate, he died of an arrhythmia or irregular heartbeat, not a heart attack. While scientific evidence suggests Vioxx can promote blood clots leading to a heart attack, no data have linked the drug with arrhythmias.

Jurors who voted against Merck said much of the science sailed right over their heads. 'Whenever Merck was up there, it was like wah, wah, wah,' said juror John Ostrom, imitating the sounds Charlie Brown's teacher makes in the television cartoon. 'We didn't know what the heck they were talking about.'"

I hate to be an elitist, but this is just wrong. Causation is a required element of every personal injury lawsuit; I could pound a man's skull flat with a baseball bat, but if he was already dead before I laid my hands on him, I'm not legally responsible for his death. It's not that complicated. Moving on to one of the more substantive potential reasons for the jury's verdict:

"One juror, Ms. Blas, had written in her questionnaire that she loves the Oprah Winfrey show and tapes it. 'This jury believes they're going to get on Oprah,' Ms. Blue told Mr. Lanier. 'They only get on Oprah if they vote for the plaintiff.'

Two days later, facing the jury with his final argument, Mr. Lanier ... hammered home the point that they would be sending a message that would be heard widely. 'I can't promise Oprah,' he said, but 'there are going to be a lot of people who'll want to know how you had the courage to do it.'

As he made the Oprah reference, Mr. Lanier looked at Ms. Blas in the eye. She says she broke out into laughter and liked the lawyer's attention to her. 'That told me he read those profiles and tried to assess each and every one of us,' Ms. Blas said."

Pathetic. I'm not advocating that every drug which makes it through the FDA approval process should have an absolute defense to products liability. I also think that Merck was ill-advised to pimp out Vioxx with a full-on marketing blitz if it had, in fact, conducted internal studies that raised issues as to product safety. There may well be a lawsuit out there where $235 million in damages is legally justifiable. But it wasn't this one. This was a shitty plaintiff's case, and one that Merck most certainly would have won had the case been tried to a judge, rather than a jury.