Jury Finds for Merck and Other Defendants on the Key Issue in an Environmental Contamination Lawsuit

The Company Will Appeal Portion of Finding In Favor of Plaintiffs

Category:

Thursday, March 31, 2011 8:08 am EDT

Dateline:

WHITEHOUSE STATION, N.J.

Public Company Information:

NYSE:
MRK

Merck is pleased a federal court jury in California found that plaintiffs were not exposed to contamination in drinking water or ground water in the Abarca, et al. v. Merck & Co., Inc., et al. case.

The company disagrees with the jury's finding about whether plaintiffs possibly could have been exposed to contamination transported by air between 1969 and 1994 or in canal water that may have left the canal during a 2006 flood. Merck will appeal that portion of these Phase 1 trial results, which the company believes were not supported by the evidence and are inconsistent with well-established legal principles.

Merck's role in this litigation relates to its ownership of the stock of Baltimore Aircoil Company until 1985. Defendants include Baltimore Aircoil Company, Amsted Industries Incorporated - a corporation to which Merck sold the stock of Baltimore Aircoil Company in 1985 - and Merck. Plaintiffs in the case are individuals who live or lived in the Beachwood neighborhood in Merced County, Calif., near a former wood-treating facility operated by BAC-Pritchard, a subsidiary of Baltimore Aircoil Company.

"We are pleased that the jury found that no neighbor of the site was adversely affected through drinking water or ground water by BAC-Pritchard's past wood-treatment operations. We strongly disagree with the jury's findings, regarding air or flood water contamination, which are contrary to actual testing data collected at or near the former BAC-Pritchard facility," said Stephen Lewis of Barg Coffin Lewis and Trapp, LLP, outside counsel for Merck.

The litigation in this case remains in the early stages. Notably, the Phase 1 trial did not address whether any particular person actually was exposed to contamination or developed any health problems, nor did this phase of the proceeding address whether Merck or any other defendant is liable or whether any plaintiff should be entitled to damages. Should the portions of the Phase 1 verdict in the plaintiffs favor not be reversed on post-trial motion or appeal, such matters would be addressed in subsequent phases of litigation.

Merck, which is a research-based pharmaceutical company, has never operated any wood-treatment facility. Its role in this case arises solely from its ownership of the stock of Baltimore Aircoil Company until 1985. Since selling the stock of Baltimore Aircoil Company to Amsted in 1985, Merck has worked closely with Amsted and state and local environmental regulators to investigate and remediate groundwater and soil at the site. Indeed, the agency overseeing the remediation, the California Regional Water Quality Control Board, in 2009 found that the remediation activities at the site were proceeding in a satisfactory manner and that the public was not being exposed to chemicals previously used at the site.

Judge Oliver Wanger of the Fresno Division of the U.S. District Court for the Eastern District of California presided over the Phase 1 trial. Merck is represented by John Barg, Stephen Lewis and Morgan Gilhuly of the law firm of Barg Coffin Lewis and Trapp, LLP.

About Merck

Today's Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships. For more information, visit www.merck.com.

Forward-Looking Statement

This news release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period; the impact of pharmaceutical industry regulation and health care legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck's ability to accurately predict future market conditions; dependence on the effectiveness of Merck's patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.

Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck's 2010 Annual Report on Form 10-K and the company's other filings with the Securities and Exchange Commission (SEC) available at the SEC's Internet site (www.sec.gov).

Business Wire NewsHQ℠