The papers are reporting that the Supreme Court today unanimously ruled that the plaintiffs' suit under Section 10(b) against Merck in the Vioxx litigation is not time barred.  The article can be found online.  In this case, investors alleged that Merck misrepresented the safety of the drug Vioxx, which it removed from the market in 2004. Merck argued that the clock on the statute of limitations began when investors should have known that problems existed, that is, when issues with Vioxx were made public in September 2001. The investors argued that they had no reason to suspect a possible fraud (which would involve scienter) until publication of a WSJ article in November 2004 disclosing internal Merck emails showing that the company had long been concerned about the safety of Vioxx.

Writing for the Court, Justice Stephen Breyer agreed with the investors: the clock begins "when the plaintiffs did in fact discover, or when a reasonably diligent plaintiff would have discovered 'the facts constituting the violation' - whichever comes first," Breyer said. "We also hold that the 'facts constituting the violation' include the fact of scienter, 'a mental state embracing intent to deceive, manipulate or defraud.'"

The case is Merck v. Reynolds, 08-905.

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