3rd Circuit Revives Shareholders' Claims that Merck Hid Vioxx Risks

PHILADELPHIA - A general rule barring the use of after-acquired information to supplement demand futility allegations is inapplicable where the parties voluntarily agree to permit such discovery, a federal appeals court has ruled in reinstating a shareholders derivative action charging Merck & Co. Inc. officers and directors with violating their duties by concealing Vioxx's purported cardiovascular risks. In Re: Merck & Co. Inc. Securities, Derivative & ERISA Litigation, No. 06-2911 (3rd Cir.).

The 3rd Circuit U.S. Court of Appeals on July 18 said the U.S. District Court for the District of New Jersey erred in denying the shareholders' request for …