Merck Sharp & Dohme Corp. v. Conway

861 F. Supp. 2d 802, 2012 WL 966948, 2012 U.S. Dist. LEXIS 38390
CourtDistrict Court, E.D. Kentucky
DecidedMarch 21, 2012
DocketCivil Action No. 3:11-51-DCR
StatusPublished
Cited by9 cases

This text of 861 F. Supp. 2d 802 (Merck Sharp & Dohme Corp. v. Conway) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merck Sharp & Dohme Corp. v. Conway, 861 F. Supp. 2d 802, 2012 WL 966948, 2012 U.S. Dist. LEXIS 38390 (E.D. Ky. 2012).

Opinion

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is before the Court for consideration of Plaintiff Merck Sharp & Dohme Corporation’s (“Merck”) motion for [806]*806a preliminary injunction. [Record No. 2] Merck asserts that Kentucky Attorney General Jack Conway (the “AG” or “Kentucky AG”) violated its right to due process when he retained outside counsel on a contingency fee basis to aid in the prosecution of Merck under the Kentucky Consumer Protection Act (“KCPA”). [Record No. 1] For the reasons discussed below, the Court will deny Merck’s motion.

I. Background

This matter arose from Merck’s marketing and distribution activities involving the prescription medication Vioxx. The AG filed suit against Merck on September 28, 2009, pursuant to the KCPA, located in Chapter 367 of the Kentucky Revised Statutes (“KRS”). [Record No. 2-1, p. 7] The complaint alleges that “Merck has willfully engaged in acts and practices which are unfair, false, misleading and/or deceptive and has committed acts or practices in trade or commerce in violation of KRS 367.170.” [Record No. 2-2 ¶ 34] The requested relief includes civil penalties of “two thousand dollars ($2,000) for each violation of KRS 367.170, and ten thousand dollars ($10,000) for each violation targeted to consumers over the age of 65.” [Id., p. 8] These amounts represent the maximum civil penalties recoverable under the KCPA. See KRS § 367.990(2). The AG filed the complaint in the Franklin Circuit Court; however, the case was removed to this Court on October 30, 2009. [Civil Action No. 3: 09-54, Record No. 1] The case was then transferred to the Eastern District of Louisiana on April 15, 2010, as part of the multidistrict litigation (“MDL”) captioned In re Vioxx Product Liability Litigation, MDL No. 1657. [Civil Action No. 3: 09-54, Record No. 15]

Approximately one year into the action, the AG retained outside counsel to assist with the Vioxx litigation. [Id., p. 3] On July 28, 2010, the AG “issued a Request for Proposals,” and a panel reviewed the six proposals that were submitted. [Record No. 15, p. 7] Thereafter, on September 30, 2010, the AG entered into a contract with the firm Garmer & Prather, PLLC. [Record No. 2-3] The contract was approved by Governor Steven L. Beshear through Executive Order 2010-823. [Id., p. 1; Record No. 15, p. 7] Under the contract, the firm agreed to be compensated by contingency fees “to be withheld from any settlement award resulting from th[e] litigation.” [Record No. 2-3, p. 3]

Garmer & Prather agreed to “assist the [Office of the Attorney General (OAG) ] with investigation and potential litigation involving Merck & Co. Inc., manufacturer of the pharmaceutical drug Vioxx and any other potentially liable parties.” [Id., p. 5] The contract contains the following relevant provisions:

Legal services will include, but may not be limited to:
Performing an assessment of the OAG’s proposed litigation against Merck & Co. Inc.
Assuming lead role in investigating and, if warranted, preparing litigation against Merck & Co. Inc. and other potentially responsible entities, if any. [The AG] will conduct all phases of investigation and litigation including responding to motions, including motions to dismiss;
... [Drafting and answering discovery propounded to the Commonwealth; tracking documents obtained in discovery; coordinating] litigation with other states and the federal government to promote, to the extent beneficial, a unified approach to these cases; taking of depositions; defending depositions noticed by the defendants; preparing Commonwealth witnesses for depositions; responding to motions for summary judgment or other pretrial dispositive motions; identification of experts to testify in [807]*807favor of the Commonwealth; preparation of expert witnesses for deposition or trial testimony; assessing the strength of legal arguments propounded by the litigants; preparation of legal arguments on motions; dealing with discovery disputes; represent the Commonwealth in trial or in any settlement negotiations that may occur; represent the Commonwealth in responding to post-trial motions; represent the Commonwealth in the appeal of any judgment or verdict rendered in any such action(s) and, if applicable, the remand from appeal(s).

[Id., pp. 5-6] Importantly, the agreement also provides:

The OAG retains the right at all times to direct the litigation in all respects, including but not limited to, whether and when to initiate litigation, against whom actions will be taken, the claims to .be made in said litigation, approval and/or rejection of settlements and the amount and type of damages to be requested.

[Id., p. 5 (emphasis omitted) ]

Merck filed the instant action against the AG on August 16, 2011, seeking a declaratory judgment and injunctive relief. [Record No. 1] In its complaint, Merck alleges that the AG has “delegated [its coercive powers] to private lawyers' having a clear, direct and substantial financial stake in the outcome of Commonwealth ex rel. Conway v. Merck & Co., Inc., a punitive enforcement action that must be prosecuted in the public interest or not at all.” [Id. ¶ 29] As a result, Merck asserts, its “right to due process under the Fourteenth Amendment has been infringed.” [Id. ¶ 30] Merck filed its motion for a preliminary injunction on August 16, 2011.1 [Record No. 2] The Court held a scheduling conference on September 13, 2011, during which the parties indicated that a motion to remand was under advisement in the Eastern District of Louisiana and that a ruling was' imminent. [Record No. 27, pp. 6, 10] On January 3, 2012, the District Court for the Eastern District of Louisiana remanded the action to the Franklin Circuit Court. In re Vioxx Prods. Liab. Litig., 843 F.Supp.2d 654, 670, MDL No. 1657, 2012 WL 10552, at *14 (E.D.La. Jan. 3, 2012). Merck moved for permission to appeal the decision, but that motion was denied on February 24, 2012. See In Re: Vioxx Prods. Liab., No. 12-90002 (5th Cir.2012).

II. The Standard for a Preliminary Injunction

A preliminary injunction is an extraordinary equitable measure. It has been characterized as “one of the most drastic tools in the arsenal of judicial remedies.” Am. Civ. Liberties Union of Ky. v. McCreary Cnty., Ky., 354 F.3d 438, 444 (6th Cir.2003) (internal quotation marks and citation omitted). For this reason, it should not be extended to cases which are doubtful or do not come within well-established principles of law. See id. The Sixth Circuit has identified the following factors to be considered in evaluating a motion for injunctive relief: (1) the likelihood of success on the merits; (2) whether the injunction will save the plaintiff from irreparable injury; (3) whether the injunction would cause substantial harm to others; and (4) whether the public interest would be served by the injunction.

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861 F. Supp. 2d 802, 2012 WL 966948, 2012 U.S. Dist. LEXIS 38390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merck-sharp-dohme-corp-v-conway-kyed-2012.