Merck and/or Medco Retirement (401k) Plans
Practice Area: Employee Benefits
Lawsuit Filed To Recover Losses in Merck Stock by Retirement (401k) Plans
October 22, 2004 – Cohen Milstein Sellers & Toll PLLC, Vianale & Vianale LLP and Sarraf Gentile LLP have filed a lawsuit on behalf of participants in retirement (401k) plans sponsored by Merck and/or its subsidiary Medco that invest in Merck stock (the "Plans"). The suit alleges violations of the federal pension law (ERISA) in connection with the loss of value in Merck's stock acquired and held by present and former employees of Merck and Medco through the Plans. The goal of this lawsuit is to restore losses in Merck stock to the Plans and the accounts of employees in the Plans.
The lawsuit alleges that fiduciaries of the Plans violated their fiduciary duties from May 21, 1999 to September 30, 2004, by failing to disclose material information concerning the safety profile of its drug Vioxx to participants of the Plans (the “Disclosure Claims”), and by continuing to acquire and hold Merck stock when it was no longer a prudent investment because of safety issues related to Vioxx (the “Prudence Claims”). As a result, Merck stock may have been acquired by the Plans at artificially inflated prices, as demonstrated by the precipitous decline in the stock price following the disclosure of this information related to the safety profile of Vioxx.
The case was consolidated with a number of other actions alleging ERISA violations with respect to the acquisition and holding of Merck stock in the Plans and on May 4, 2005 Cohen Milstein Sellers & Toll PLLC was appointed as a member of the co-lead counsel committee responsible for the litigation of the action. On August 2, 2005, a consolidated amended complaint was filed in the action, a copy can be found to the left under "Case Documents".
Merck and the other defendants moved to dismiss the consolidated amended complaint, but on July 11, 2006, the Court rejected the motion to dismiss and permitted the action to go forward. A copy of the Opinion can be found to the left under "Case Documents". The case is now currently in discovery.
On October 19, 2007, Plaintiffs filed a motion for Class Certification.
On February 9, 2009, the Court issued an Opinion granting class certification of the Prudence Claims and related claims based upon allegations that the fiduciaries of the Plan breached their fiduciary duties by failing to prudently manage the Merck Plans. The definition of the class certified by the Court is as follows:
Every person, other than Defendants:
- who was a participant in, or beneficiary of, the Merck & Co., Inc. Employee Savings & Security Plan, the Merck & Co., Inc. Employee Stock Purchase & Savings Plan, the Merck Puerto Rico Employee Savings & Security Plan and the Merck-Medco Managed Care, LLC 401(k) Savings Plan (collectively, the “Plans”) at any time between October 1, 1998 and September 30, 2004; and
- whose Plan accounts invested in the Merck Common Stock Fund and/or Merck common stock; and
- who sustained a loss to his or her Plan account as a result of the investment in the Merck Common Stock Fund and/or Merck common stock; and
- who has not executed a settlement agreement releasing these claims.
A copy of the Class Certification Opinion can be found to the left under “Case Documents”.
On May 11, 2009 the Court issued an Order denying Plaintiffs’ Motion for Partial Summary Judgment. A copy of the Order can be found to the left under “Case Documents”. Currently both parties are engaged in the discovery process which is scheduled to continue through the end of September 2010.
If you are a current or former employee of Merck, Medco Health Solutions or a subsidiary who acquired Merck stock through Merck & Co., Inc. Employee Stock Purchase and Savings Plan, Merck & Co., Inc. Employee Savings & Security Plan, Medco 401(k) Plan, Merck-Medco Managed Care 401(k) Savings Plan, or the Medco Health Solutions, Inc. 401(k) Savings Plan ("the Plans"), between May 21, 1999 and the present, interested in recovering losses, or if you have information which might assist us in the litigation of these allegations or information regarding the individuals responsible for the management of the Plans, please contact one of the following persons:
Marc I. Machiz, Esq.
Bruce Rinaldi, Esq. brinaldi@cohenmilstein.com
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 or 202-408-4600