[JURIST] The US Supreme Court [official website] on Tuesday granted certiorari [orders list, PDF] in Merck & Co. v. Reynolds [docket; cert. petition, PDF], in which the Court will decide when the statute of limitations begins to run in a securities fraud case under the "inquiry notice" standard. Investors brought a class action suit against the drug maker Merck & Co. [corporate website] in November 2003, alleging that it had deliberately concealed information about the safety record of its painkiller Vioxx [JURIST news archive]. The case was dismissed by US District Court Judge Stanley Chester in April 2007 after he determined that investors were on "inquiry notice" of the alleged fraud in September 2001 when the Food and Drug Administration (FDA) [official website] released a warning letter [text] about the painkiller. The Third Circuit Court of Appeals reinstated the case [opinion, PDF] in September 2008, finding that Chester had "acted prematurely in finding as a matter of law that [the investors] were on inquiry notice of the alleged fraud."

Merck pulled Vioxx from the market in September 2004 after a study showed that it could double the risk of heart attack or stroke if taken for more than 18 months. The price of Merck stock jumped by almost 10 percent following news of the class action dismissal.