In March 2000, after reviewing the results of a clinical study of the pain-reliever Vioxx, Merck's research chief, Edward Scolnick, typed an email. In it he said that evidence of heart-related risks from Vioxx was "clearly there". Merck did not mention Scolnick's conclusion publicly, however, and it kept selling Vioxx for four more years.
Several months ago, after Merck withdrew Vioxx from the market and Scolnick's email was revealed, the events seemed a clear case of fraud or negligence: Merck knew its drug was risky and didn't say so. Plaintiffs' lawyers pounced, and criminal and regulatory investigations began. Subsequent explanations, however, have shown that the case might not be clear.
In recent years, email has been heralded as a miraculous new detection tool, one that enables regulators to peer through public statements and see the "unvarnished truth" beneath. The impact of email on corporate reputations and pocketbooks has indeed been breathtaking, but not always because it reveals the truth. Sometimes, email doesn't reveal anything more than the appearance or possibility of impropriety. This appearance alone, however, can create massive liability.
Warning beacon
Before going further, I should acknowledge the obvious: on this topic, I'm not just an armchair observer (please see below).