Fraud on the Market Takes It on the Chin – Again


We can’t say all that much about Merck & Co. v. Ratliff, ___ S.W.3d ___, 2012 WL 413522 (Ky. App. Feb. 10, 2012), because of our involvement in the Vioxx litigation, but we’d be remiss not to point out that the Kentucky appellate court joined the vast majority of other jurisdictions in rejecting “fraud on the market” outside of the securities area while reversing (overcoming a tough abuse of discretion standard) class certification in RatliffId. at *7.  No fraud on the market theory was appropriate for:  (1) consumer fraud, (2) regular fraud, (3) negligent misrepresentation, and (4) unjust enrichment.

Three other points of interest about Ratliff:  First the court recognized that “class certification is typically not granted in prescription drug cases because of the individualized inquiries such litigation typically involves.”  Id. at *6 n.6.  Our class action cheat sheets – state and federal – underscore the accuracy of this point.  Second, the court recognized the similarities between fraud on the market and agency fraud theories such as fraud on the FDA.  Id. at *7.  Third, the court held that the “inequitable conduct” element of unjust enrichment would require an individualized determination of medical risk and benefit for every user of the drug.  Id.

Please see article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dechert LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.