Vioxx and Corporate Apologies
posted by Elizabeth Nowicki
Every time I see in the WSJ a mention of the Vioxx litigation or the Bausch & Lomb eye solution situation or any similar recent potential mass tort situation, I think back to my clerkship with Judge Jack B. Weinstein, EDNY, and I call to mind his opining about the value of apologies in the mass torts context.
As most of you might know, Judge Weinstein is famous for (among other things) facilitating the resolution of many major mass torts disputes, including those related to DES, Agent Orange, silicone breast implants, tobacco, and asbestos. Judge Weinstein is a wizard at managing the litigation of these sorts of cases, but he is equally masterful at assisting in the settlement process. When talking about some of these cases and about mass torts generally, in speeches, law review articles, and opinions, the Judge has often alluded to value corporate-level apologies might have in the context of resolving mass tort litigation. Indeed, the Judge often references (seemingly favorably) the role corporate-level apologies have had in the Japanese legal realm. While I do not purport to speak for the Judge, my impression is that he thinks that apologizing – by corporate officials to persons injured by the use of the corporation’s product – is something that is perhaps considered too infrequently (either in the absolute sense or in facilitating settlements and/or less costly resolution of mass torts disputes).
As we all know, however, the notion of apologizing publicly for a mass tort situation raises the hair on the back of most corporate litigators’s necks. The job of a litigator, some might say, is to *clear* the corporate name, not impugn the corporation by suggesting that corporate officials take responsibility by apologizing. Indeed, back in my younger days, when everything was black and white, I might have taken exception to the Judge’s comment, when speaking about the ethical dilemmas lawyers face in mass tort litigation when counseling their corporate (tortfeasor) clients:
I do not pretend to have the answers, but I ask you to consider the possibility that the old rules promoting the ideal of the zealous, adversarial lawyer may be stretched beyond their limitations in the mass tort case. If that is so, some new ways must be found to light our way through this dark, uncharted territory.
Now that I am older and wiser, I am beginning to take the Judge’s words more to heart. Every time I read a WSJ article about the Vioxx litigation (for example), I think to myself “if I were a Merck director, what would I do? Would I seriously suggest to my colleagues that we consider apologizing and settling these cases? Would I advocate for continued litigation, even if I suspected that maybe we did drop the ball by not making heart complication disclosures as needed? What am I required to do, to do right by the shareholders while still being a moral person? Would I resign if I did not have the option to apologize on behalf of the corporation?” In hindsight, I see now that Judge Weinstein had been raising a compelling, complex, and critical question all of these years: When *should* corporate counsel suggest that a corporate client essentially roll over and apologize for something such as not recalling a product earlier (Bausch & Lomb), not making forthright medical risks disclosure (Vioxx), overtly concealing critical medical information (Dalkon Shield), or treating the risk of serious bodily harm as a purely economic matter (Ford Pinto)?
Back when I was young and overzealous, when my vision as a lawyer was crystal clear and everything was black or white, I would have taken the position that lawyers for Merck in the current Vioxx litigation should not retreat. The notion that the Merck lawyers might want to consider discussing with the Merck directors an apology to be issued to the users of Vioxx would have made me recoil a decade ago.
I seem to have stepped back from my line in the sand over the past several years, however. No longer is it so clear to me that issuing a corporate apology is always contraindicated. No longer am I clear that it is absolutely indefensible for directors to make that sort of corporate liability . . . concession (for lack of a better word). No longer am I clear that the best interests of the shareholders mandate resolutely denying any notion of liability or responsibility. I am now wondering if there is something to be consistently said – from a shareholder wealth maximization standpoint and from a director fiduciary duty standpoint and from a “good faith” standpoint – for corporate apologies.