Merck & Co., Inc., et al. v. Reynolds, et al.

Merck & Co. (defendant) marketed the pain drug Vioxx. A 2000 study showed Vioxx users suffered four times as many heart attacks as those taking a competing drug, naproxen; Merck explained this away with a naproxen hypothesis attributing the difference to naproxen's benefits rather than any harm from Vioxx. In 2001, the FDA sent Merck a warning letter saying Merck hadn't adequately acknowledged that Vioxx itself might be the cause, and several product-liability suits followed alleging Merck downplayed Vioxx's risks. In November 2003, investors (plaintiffs) sued, alleging Merck had fraudulently pushed the naproxen hypothesis while secretly knowing it was false. Merck argued the two-year statute of limitations had already run because the FDA letter and the earlier lawsuits should have put investors on notice more than two years before they filed. The district court agreed and dismissed; the Third Circuit reversed.