IN THE COURTS

MERCK SUED BY NEW YORK FUND OVER VIOXX ISSUE The New York state comptroller sued Merck & Company, claiming the drug maker hid certain risks associated with the painkiller Vioxx.

Merck pulled its Vioxx pain medication from shelves September 30 after a clinical trial showed patients taking the drug showed an increased risk for heart attacks and strokes after 18 months.

The move came after several physicians and other studies raised concerns about the drug’s potential health risks.

The company has been the subject of several investor lawsuits since it pulled Vioxx off the market, mostly because its stock has lost well over a third of its value since the recall. One of the losers has been New York state’s pension fund, which has recorded $171 million in paper losses related to Merck, according to state Comptroller Alan G. Hevesi.

The majority of the state’s Merck stock was held by the pension fund in an internally managed index fund.As of September 30, the fund held a total of 9.4 million Merck shares, with 7.8 million in the index account, according to a spokesman for the New York comptroller.

Mr. Hevesi filed a suit against the Whitehouse Station, N.J., company seeking class-action status in a federal district court in New Jersey, as well as related federal motions in Louisiana. He also is seeking to consolidate all other purported class actions into one case in New Jersey.

A Merck spokesman, Tony Plohoros, said the company couldn’t comment on the specific allegations in the lawsuit because it hadn’t seen it.

– Dow Jones Newswires

‘TRUTH IN LENDING’ DAMAGES LIMITED BY TOP COURT The U.S. Supreme Court, siding with the financial services industry, tightened the limits on damages consumers can get from companies that violate the federal Truth in Lending Act.

The court yesterday ruled that the 1968 consumer-protection law generally caps damages at $1,000 when the customer hasn’t proven the amount of actual harm. The 8-1 ruling overturned a $24,192 award to a man who won a lawsuit against a Virginia auto dealership over a loan for a used truck.

The ruling may save lenders as much as $1.1 billion a year in increased damage awards on new auto loans and $1.8 billion a year on used-car loans, according to a brief filed by the American Bankers Association and two other industry groups. Total outstanding American consumer credit was $1.95 trillion in August 2003, the brief said.

Banks, auto dealers, and other lenders urged the high court to impose the $1,000 ceiling, which will apply to most loans and credit other than home mortgages. Consumer groups had called on the justices to permit larger awards. For mortgages, the damage limit is $2,000.

The Truth in Lending Act requires lenders to disclose the terms for such credit transactions as mortgages, home-equity loans, auto loans, and credit card purchases. Borrowers can sue over violations.

– Bloomberg News

INTERNATIONAL

ADMINISTRATION UPHOLDS PENALTY TARIFFS AGAINST SHRIMP IMPORTS

The Bush administration yesterday upheld the imposition of penalty tariffs on shrimp imports from China and Vietnam, handing a victory to beleaguered American shrimp producers.

The action affirmed with slight modifications a preliminary ruling by the Commerce Department’s International Trade Administration last summer. The penalty tariffs have been collected by border agents since July.

The department is scheduled to make a final decision on shrimp imports from four other countries – Brazil, Ecuador, India, and Thailand – in late December.

Together, the six countries provide about 75% of the shrimp that Americans eat. American food distributors contend that the penalty tariffs will drive up shrimp prices at restaurants and grocery stores.

In the decision yesterday, the government set duties on Chinese exports of frozen and canned warm-water shrimp at levels ranging from 27.9% to 112.8%. Vietnamese shrimp exports will be hit with duties ranging from 4.1% to 25.8%.

The tariffs were imposed because a government investigation found the shrimp from those nations was being sold in the American market at unfairly low prices, a practice known as dumping.

The ruling came in a case brought by the Southern Shrimp Alliance, which has been dealing with rock-bottom prices for shrimp since 2001. It alleged that the American industry was on the brink of destruction because of the flood of cheap foreign shrimp.

– Associated Press

NATIONAL

GM WILL LAY OFF LINDEN PLANT WORKERS IN EARLY ‘O5 General Motors will lay off most of its workers at its Linden assembly plant early next year, months ahead of its original plans to stop making two vehicles there, a company spokesman said yesterday.

GM is in the process of notifying employees and union officials about the planned layoffs, which is required under federal law, said a spokesman, Dan Flores.

The company had initially planned to end production on the Chevrolet Blazer and GMC Jimmy next summer due to slowing sales of the two sport-utility vehicles. The Linden plant has assembled the two vehicles since 1995.

The layoffs will affect most of the approximately 900 to 950 hourly workers and 110 salaried employees at the plant, Mr. Flores said.

Decreasing sales of the two vehicles have led to frequent shutdowns at the plant. GM cut the second shift at Linden two years ago, leading to about 1,000 layoffs.

– Associated Press

AUDIT SHOWS LOWER CIRCULATION AT HOY A final audit released by a circulation reporting group yesterday showed that Hoy, a Spanish-language newspaper owned by Tribune Co., overstated its daily circulation by nearly 50%, in line with an earlier estimate from the company.

Hoy is one of several newspapers found this year to have inflated their circulation numbers, which affect the rates charged to advertisers. Tribune’s Newsday also overstated its circulation, as did Belo Corp.’s Dallas Morning News and Hollinger International Inc.’s Chicago Sun-Times.

The Audit Bureau of Circulations said Hoy’s daily circulation for the 12-month period ending September 30, 2003, was found to be 49,681.That was 46.4% lower than the originally reported 92,604 but within the adjusted range of 45,000 to 55,000 announced by Tribune in September.

Sunday circulation was 25,465, or 23.3% lower than Hoy’s original report.

The industry group has been probing Hoy’s circulation practices since February and is still reviewing the two most recent six-month periods. It said it expects to complete those audits by early 2005.

The ABC’s board censured Hoy and the other papers last summer, after the discrepancies were first discovered, for circumventing circulation reporting rules.

– Associated Press

PRICELINE.COM STOPS SALE OF NORTHWEST AIRLINE TICKETS Priceline.com Inc., a seller of discount-travel services on the Internet, stopped offering Northwest Airlines Inc. tickets yesterday because of a dispute over distribution terms.

Priceline had sold Northwest tickets since it began offering traditional airfare sales early this year. A spokesman, Brian Ek, declined to comment.

Norwalk, Conn.-based Priceline disclosed the discontinued sales in a Securities and Exchange Commission filing. A Northwest spokesman didn’t return a telephone call seeking comment. Major American carriers including Northwest have been seeking to cut ticket distribution costs as oil prices surged after three straight years of losses.

– Bloomberg News