Jury Finds for Merck and Other Defendants on the Key Issue in an Environmental Contamination Lawsuit


March 31, 2011 7:08 am ET

The Company Will Appeal Portion of Finding In Favor of Plaintiffs

Merck is pleased a federal court jury in California found that
plaintiffs were not exposed to contamination in drinking water or ground
water in the Abarca, et al. v. Merck & Co., Inc., et al. case.

The company disagrees with the jury’s finding about whether plaintiffs
possibly could have been exposed to contamination transported by air
between 1969 and 1994 or in canal water that may have left the canal
during a 2006 flood. Merck will appeal that portion of these Phase 1
trial results, which the company believes were not supported by the
evidence and are inconsistent with well-established legal principles.

Merck’s role in this litigation relates to its ownership of the stock of
Baltimore Aircoil Company until 1985. Defendants include Baltimore
Aircoil Company, Amsted Industries Incorporated – a corporation to which
Merck sold the stock of Baltimore Aircoil Company in 1985 – and Merck.
Plaintiffs in the case are individuals who live or lived in the
Beachwood neighborhood in Merced County, Calif., near a former
wood-treating facility operated by BAC-Pritchard, a subsidiary of
Baltimore Aircoil Company.

“We are pleased that the jury found that no neighbor of the site was
adversely affected through drinking water or ground water by
BAC-Pritchard’s past wood-treatment operations. We strongly disagree
with the jury’s findings, regarding air or flood water contamination,
which are contrary to actual testing data collected at or near the
former BAC-Pritchard facility,” said Stephen Lewis of Barg Coffin Lewis
and Trapp, LLP, outside counsel for Merck.

The litigation in this case remains in the early stages. Notably, the
Phase 1 trial did not address whether any particular person actually was
exposed to contamination or developed any health problems, nor did this
phase of the proceeding address whether Merck or any other defendant is
liable or whether any plaintiff should be entitled to damages. Should
the portions of the Phase 1 verdict in the plaintiffs favor not be
reversed on post-trial motion or appeal, such matters would be addressed
in subsequent phases of litigation.

Merck, which is a research-based pharmaceutical company, has never
operated any wood-treatment facility. Its role in this case arises
solely from its ownership of the stock of Baltimore Aircoil Company
until 1985. Since selling the stock of Baltimore Aircoil Company to
Amsted in 1985, Merck has worked closely with Amsted and state and local
environmental regulators to investigate and remediate groundwater and
soil at the site. Indeed, the agency overseeing the remediation, the
California Regional Water Quality Control Board, in 2009 found that the
remediation activities at the site were proceeding in a satisfactory
manner and that the public was not being exposed to chemicals previously
used at the site.

Judge Oliver Wanger of the Fresno Division of the U.S. District Court
for the Eastern District of California presided over the Phase 1 trial.
Merck is represented by John Barg, Stephen Lewis and Morgan Gilhuly of
the law firm of Barg Coffin Lewis and Trapp, LLP.

About Merck

Today’s Merck is a global healthcare leader working to help the world be
well. Merck is known as MSD outside the United States and Canada.
Through our prescription medicines, vaccines, biologic therapies, and
consumer care and animal health products, we work with customers and
operate in more than 140 countries to deliver innovative health
solutions. We also demonstrate our commitment to increasing access to
healthcare through far-reaching policies, programs and partnerships. For
more information, visit www.merck.com.

Forward-Looking Statement

This news release includes “forward-looking statements” within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Such statements may include,
but are not limited to, statements about the benefits of the merger
between Merck and Schering-Plough, including future financial and
operating results, the combined company’s plans, objectives,
expectations and intentions and other statements that are not historical
facts. Such statements are based upon the current beliefs and
expectations of Merck’s management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward-looking statements.

The following factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements: the
possibility that the expected synergies from the merger of Merck and
Schering-Plough will not be realized, or will not be realized within the
expected time period; the impact of pharmaceutical industry regulation
and health care legislation; the risk that the businesses will not be
integrated successfully; disruption from the merger making it more
difficult to maintain business and operational relationships; Merck’s
ability to accurately predict future market conditions; dependence on
the effectiveness of Merck’s patents and other protections for
innovative products; the risk of new and changing regulation and health
policies in the U.S. and internationally and the exposure to litigation
and/or regulatory actions.

Merck undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Additional factors that could cause results to differ
materially from those described in the forward-looking statements can be
found in Merck’s 2010 Annual Report on Form 10-K and the company’s other
filings with the Securities and Exchange Commission (SEC) available at
the SEC’s Internet site (www.sec.gov).

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