FRANKFORT, Ky. (Legal Newsline) -- A federal judge on Friday sided with Kentucky Attorney General Jack Conway in a lawsuit filed by Merck & Co. over the state's contract with private attorneys.
Judge Danny Reeves, for the U.S. District Court for the Eastern District of Kentucky Central Division, ruled in his 33-page opinion that Merck failed to establish that Conway relinquished control over the underlying litigation.
Reeves concluded that Conway has retained and exercised "decision-making authority" in the litigation; thus, Merck's due process rights were not violated. The judge granted the attorney general's motion for summary judgment.
Merck challenged the contingency fee contract Conway entered into with private attorneys to sue the pharmaceutical company over the anti-inflammatory drug Vioxx. That case is before a state court.
In September 2009, the attorney general filed a lawsuit against Merck over alleged violations of the state's Consumer Protection Act.
The drugmaker was charged with violating the law by marketing their anti-inflammatory drug Vioxx without revealing all the facts.
The suit, Commonwealth ex rel. Conway v. Merck & Co. Inc., alleged that in May 1999 Merck began an aggressive and deceptive promotional campaign of the drug directed at both consumers and health care professionals, without mentioning warnings of increased risk of cardiovascular events listed as a side effect.
Conway alleged that Merck was aware of the dangers through internal studies that were not disclosed to the FDA or the public.
The lawsuit also accused Merck of engaging in an elaborate scheme to create or publish scholarly articles under fake or ghost authors in order to drum up support for Vioxx.
In 2004, Merck admitted that Vioxx caused serious side effects and pulled the product from the market.
A year after filing his case, Conway hired Garmer and Prather PLLC, a plaintiffs firm in Lexington, Ky.
Merck alleged that, in entering into such a contract with private lawyers, Conway granted them a stake in the outcome of the lawsuit.
The company also alleged that Conway's outside counsel has assumed the lead role in the prosecution of the suit and has "made or influenced myriad decisions about the prosecution, large and small."
Reeves noted that an attorney general does not necessarily violate a defendant's due process rights by hiring outside counsel on a contingency-fee basis -- that is, if the "required safeguards" are in place.
"There is no constitutional requirement that the AG's office be involved in any particular hands-on work in the litigation, as long as he retains control over the critical decisions in the case. Lack of involvement in the legwork of a case does not prove or even imply a lack of
control," the judge wrote. "The legal system would cease to function efficiently if the person with ultimate control over a case was required not only to oversee and approve all the actions taken in the matter, but also take part in every minute detail of those actions.
"The AG need not be involved in the day-to-day work done in all the cases being prosecuted by his office. Indeed, it would be virtually impossible for him to do so."
Reeves said it is "similarly illogical" to require Assistant Attorney General Elizabeth Natter to take part in the in-depth work that the outside counsel was hired to do.
"This would not only be too onerous a standard for 'maintaining control over the litigation,' it would also defeat the purpose of hiring outside counsel to begin with," he wrote.
"In summary, the court concludes that the AG's office does not need to be intimately involved in all of the everyday work or decision-making that occurs in the Merck I litigation to exercise meaningful control over the proceedings.
"As long as the AG's office is reviewing the contingency-fee counsel's work before adopting or approving it -- and Merck has cited no evidence in the record to convince the court that it is not -- the AG has retained and exercised his decisional authority."
The judge said he will not second-guess the AG's decision to "grant a certain amount of 'room for the outside attorneys to... exercise their professional skills in putting a lot of [the litigation] together.'"
"Because these decisions are 'generally internal to the preparation of the litigation' and the AG does not allow outside counsel to dictate the direction or goals of the action, the arrangement has not violated Merck's due process rights," Reeves wrote.
Click here to read the judge's full opinion.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.