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New Jersey Supreme Court unanimously rejects abusive class action

In a cheering blow for the cause of the rule of law, the New Jersey Supreme Court decertified the nationwide class in International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., Inc., which sought "damages" of over $10 billion without alleging personal injury or even alleging that Vioxx didn't work. I discussed the case in the March 2007 Class Action Watch. Press coverage: Wall Street Journal; New Jersey Law Journal; AP/Washington Times; Bloomberg; Merck press release. Most significantly, the Court rejected the "fraud on the market" theory of damages for consumer fraud. The news wasn't all good for Merck; the Court did dodge the issue of extraterritorial application of state consumer fraud law, unfortunately, which means that plaintiffs can still attempt to go forward with a variety of individual suits on behalf of sympathetic union health plans on the questionable theory of overbroad application of New Jersey consumer fraud law.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.