In Attorney General v Merck Sharp & Dohme Corp, the Court of Appeals panel majority held that “plaintiffs’ allegations fall within the statutory definition of “product liability action,” because plaintiffs have asserted legal and equitable theories of liability for damage to property resulting from the production of a product. MCL 600.2945(h).” The Court determined that “plaintiffs’ claim of monetary loss based on alleged misrepresentations regarding the safety and efficacy of Vioxx constitutes ‘damage to property.’” Judge Fitzgerald dissented stating that the trial court properly determined that plaintiffs’ claim under the MCFA is not a product liability action subject to the absolute defense established by the product liability statute MCL 600.2946(5).
Merck is the manufacturer of the prescription pain reliever Vioxx, which the Food and Drug Administration (FDA) approved in May 1999. After approval, clinical trials and independent studies showed an increased risk of heart attack in persons who used Vioxx. Merck voluntarily removed Vioxx from the market in 2004.
Michigan’s attorney general and Carbology Inc filed this action under the Medicaid False Claims Act (MFCA) against Merck for the expenses Michigan incurred through Medicaid payments for the drug Vioxx. The complaint alleged that as early as 2000, Merck knew that Vioxx was associated with an increased risk of heart attack, and Merck concealed or misrepresented the scientific data. Plaintiffs asserted that if Merck had been truthful about the safety and efficacy of Vioxx, they would not have paid all or part of the cost of Vioxx prescribed to Michigan Medicaid beneficiaries, which cost them more than $20 million. Plaintiffs also sought recovery under a theory of unjust enrichment. Merck moved for summary disposition pursuant to MCR 2.116(C)(8) claiming that plaintiffs’ claims were a “product liability action” pursuant to MCL 600.2945(h) and therefore barred by MCL 600.2946(5). The trial court denied summary disposition stating that Plaintiffs claims did not constitute a products liability action because they did not require proof of a defective or unsafe product. In a split decision the Court of Appeals reversed, concluding that Plaintiffs claims were indeed a products liability action because the monetary loss alleged constitutes “damage to property.” Read more »