Merck Loses Privilege Challenge In Vioxx Litigation

Last week, Judge Eldon Fallon (the Louisiana district judge overseeing the Vioxx MDL) rejected Merck’s assertion of attorney-client privilege, and ordered Merck to start producing documents.  A copy of the comprehensive opinion is available here.   

Merck had argued that “because the drug industry is so heavily regulated by the FDA, virtually everything a member of the industry does carries potential legal problems vis-a-vis  government regulators.”  (Op. at 18).  The district court, adopting the Special Master’s Report (prepared by Paul Rice (American)), rejected this argument: 

Without question, the pervasive nature of governmental regulation is a factor that must be taken into account when assessing whether the work of the in-house attorneys in the drug industry constitutes legal advice, but those drug companies cannot reasonably conclude from the fact of pervasive regulation that virtually everything sent to the legal department, or in which the legal department is involved, will automatically be protected by the attorney-client privilege.  While such an argument is intriguing because it would minimize the time and expense involved in both corporations asserting and documenting privilege and judges ruling upon those claims, the theory is unrealistic.

Accepting such a theory would effectively immunize most of the industry’s internal communications because most drug companies are probably structured like Merck where virtually every communication leaving the company has to go through the legal department for review, comment, and approval.  The fact that the industry is so pervasively regulated does not justify dispensing with each company’s burden of persuasion on the elements of attorney-client privilege. . .

– SBS