Vioxx, Merck and McDonalds

The big headline in the business news today is that Merck company has settled with 47,000 plaintiffs regarding it's Vioxx which according to the plaintiffs caused heart attacks. That at first blush seems to mean that the 47,000 who were awarded a total of 4.85 billion according to my math should be getting a check in the mail for say, a hundred thousand dollars each. You'd think that but then you wouldn't understand how these deals really work.

I'm not discussing the merit or lack of in this case. I am discussing the injustice system that allows lawyers to take all the money without a gun or mask. I have personally known these lawyers who chase down and mug big companies. One was a big time lawyer in Florida who was a key lawyer in the Tobacco settlement of some years ago. He became an incredibly rich man overnight as a result of this settlement. It's all a scam to enrich the legal trade.

This wasn't a class action suit like tobacco exactly, but it acted like one. The plaintiffs "Won" $4,850,000,000. Sounds like a lots doesn't it.

Hold on, Have you EVER been part of one of these mass settlement cases? I have. Class action. Three times.

The one that was the most discouraging was after the settlement, I got a letter from the class action attorneys that said in essence, "here's the settlement, here's how much money we took, and here's what you get".

I got enclosed in the envelope, and this is no lie, a coupon to get a discount on McDonalds hamburgers amounting to about ten bucks. The settlement was for billions. In all three class action suits the biggest I ever got was a check for $18.

So, let's see how this goes.

$4,850,000,000 ( a little over a hundred grand per plaintiff average)

• Lawyers get about a third off the top
• minus Administrative expenses
• minus Costs to Distribute the Money (the settlement is paid into a fund)
• Then is comes to you, it comes as a structured settlement, that means over time, like winning a million dollars at a dollar a year for a million years
• and there will be rules on who and how the payouts happen.

The average payout is expected to be between $10-40,000 paid over several years. What happened to the Million each. The lawyers got most of it. Oh, there will be a half dozen instant millionaire stories as fodder for the press that will make everyone think everything worked out. It didn't.

Merck made a good deal,

The lawyers made a better one.

Only the plaintiffs got screwed. The Understatement of the year is from this story:

"I think many individual plaintiffs are going to be disappointed with the amounts."

YA THINK?

I hope they don't eat up all their hamburger discounts at one time, that might cause a heart attack and then we'd have to sue McDonalds. Wait, I take that back, I'll bet right now some lawyer is punching up his spreadsheet to see how much money he could skim off a deal like that.