By Nate Raymond
NEW YORK (Reuters) - A federal judge overseeing consolidated litigation against Merck & Co over jaw injuries allegedly caused by the osteoporosis drug Fosamax has ordered hundreds of cases be dispersed to courts across the country for trial.
The decision by U.S. District Judge John Keenan in Manhattan marks an unusual and potentially costly development for Merck.
Companies often find it easier to reach settlements in mass tort cases that are consolidated before one judge.
"It's a big deal as it changes the cost paradigm for Merck exponentially," said Timothy O'Brien, a partner at Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor and lawyer representing Fosamax plaintiffs.
The judge's order Thursday requires that 200 cases per month be sent to back to courts where they were initially filed, beginning with the oldest ones.
Lainie Keller, a spokeswoman for Merck, said the company "is committed to defending its conduct in regard to Fosamax and has confidence in its defense strategy that has had so much success in the courts."
The cases before Keenan comprised roughly one-fifth of the 5,075 lawsuits pending nationally in federal and state courts related to Fosamax, a one-time blockbuster medication.
Lawsuits alleging that plaintiffs developed osteonecrosis of the jaw from Fosamax were consolidated before Keenan in 2006.
The judge conducted a series of "bellwether" trials, allowing the parties to assess trends and outcomes in similar cases. A series of wins for plaintiffs, for example, can put them in a better position for settlement talks.
The final Fosamax bellwether trial before Keenan ended in February with a $285,000 verdict for plaintiff Rhoda Scheinberg.
Merck lost just one other of the five bellwether trials before Keenan, when a jury in 2010 awarded Florida resident Shirley Boles $8 million, a sum the judge reduced to $1.5 million.
Keenan's order on Friday came after mediation to resolve 370 cases broke down two weeks ago. O'Brien's law firm and another firm represented plaintiffs in those cases.
Another 104 lawsuits brought by another firm could have been added to the talks if a deal on value was reached, O'Brien said.
Lawyers for the plaintiffs had sought to have 300 cases transferred every four months, while Merck sought to have just 100 cases scheduled for discovery over a six-month period.
Merck has benefited from having the litigation consolidated.
Keenan had thrown out 430 cases after he issued an order last November, which Merck had sought, requiring them to put forth expert reports showing scientific proof of their claims.
But in his order Friday, Keenan said Merck's latest proposal would "unnecessarily prolong" the proceedings before him.
Keenan ordered plaintiffs to recommend by October 11 where to sent the first batch of cases.
An order moving so many personal injury cases home at once is rare, O'Brien said. He noted that Merck reached a $4.85 billion settlement with over the painkiller Vioxx in 2007 only after a federal judge threatened a similar order.
"I anticipate Merck will continue talking and seek to resolve the cases," O'Brien said. "The opportunity is there."
The case is In Re Fosamax Products Liability Litigation, U.S. District Court, Southern District of New York, No. 06-md-01789.
(Reporting by Nate Raymond in New York; Editing by Bernard Orr)