* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-30802

AVMED INC; AETNA INC; ARKANSAS BLUE CROSS AND BLUE SHIELD,

A Mutual Insurance Company; HMO PARTNERS INC doing business as, Health

Advantage; USABLE LIFE; ET AL

Plaintiffs - Appellants

v.

BROWNGREER PLC; US BANCORP INC; UNIDENTIFIED PARTIES

Defendants - Appellees

Appeal from the United States District Court 

for the Eastern District of Louisiana

Before DAVIS, STEWART, and DENNIS, Circuit Judges.

PER CURIAM:*

Before this court is an appeal of the district court’s denial of two motions

for preliminary injunctive relief arising out ofthe Vioxx Multidistrict Litigation.

The plaintiff-appellants are a group of non-governmental, self-funded, ERISA

health benefit providers. The appellants seek to enjoin distribution of interim

payments from the settlement of the Vioxx Multidistrict Litigation until such

time as the appellants are able to assert equitable rights against any of their

United States Court of Appeals

Fifth Circuit

F I L E D

November 17, 2008

Charles R. Fulbruge III

Clerk
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clients who are involved in the settlement negotiation process and for whom they

have paid Vioxx-related medical expenses.The appellants requested preliminary

injunctive relief pursuant to § 502(a)(3) of the Employee Retirement Income

Security Act of 1974, as amended, 29 U.S.C. 1132(a)(3) (“ERISA”), (1) mandating

the disclosures of the identities of the Vioxx claimants participating in the

settlement; and (2) enjoining distribution of interim settlement funds until such

time as the appellants are able to assert reimbursement rights against those

claimants for whom they have paid medical expenses related to Vioxx. 

To put this matter in perspective, a brief review of the undisputed facts

pertaining to this litigation is appropriate. This multidistrict products liability

litigation involves the prescription drug Vioxx. Merck, a New Jersey

corporation, researched, designed, manufactured, marketed, and distributed

Vioxx to relieve pain and inflammation resulting from osteoarthritis, rheumatoid

arthritis, menstrual pain, and migraine headaches. On May 20, 1999, the Food

and Drug Administration approved Vioxx for sale in the United States. On

September 30, 2004, Merck withdrew Vioxx from the market after data from a

clinical trial indicated that the use of Vioxx increased the risk of cardiovascular

thrombotic events.Thereafter,thousands of individual suits and numerous class

actions were filed against Merck in state and federal courts throughout the

country alleging various products liability, tort, fraud, and warranty claims. It

is estimated that 105 million prescriptions for Vioxx were written in the United

States between May 20, 1999 and September 30, 2004. It is also estimated that

approximately 20 million patients have taken Vioxx in the United States. 

On February 16, 2005, the Judicial Panel on Multidistrict Litigation

conferred multi-district litigation status on Vioxx lawsuits filed in federal court

and transferred all such cases to the United States District Court for the

Eastern District of Louisiana. On November 9, 2007, after extensive litigation,
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Merck formally announced thatit had reached a Settlement Agreement with the

plaintiffs representing the injured Vioxx patients. The private Settlement

Agreement establishes a pre-funded program for resolving pending or tolled

state and federal Vioxx claims against Merck as of the date of the settlement,

involving claims of heart attack, ischemic stroke, and sudden cardiac death, for

an overall amount of 4.85 billion dollars. 

In order to determine eligibility and valuation of individual claims

submitted for enrollment, the Settlement Agreement provides that an

independent Claims Administrator will review claims and calculate the total

number of points awarded to each claimant during the claims valuation process.

An Escrow Agent will hold and disburse the funds as claims adjudication

proceeds. Pursuant to the terms of the Settlement Agreement, BrownGreer,

PLC, the named Defendant herein, was appointed as the Claims Administrator

and US Bancorp, Inc., the other named Defendant herein, was appointed the

Escrow Agent. 

In reviewing whether a claim is eligible for enrollment in the Vioxx

Settlement Program, the Claims Administrator must decide whether the claim

satisfies certain criteria set forth by each of three “gates”: (1) evidence of a

qualifying injury, (2) duration of use, and (3) proximity of injury to usage. Each

claimantis initially awarded a number of points based on such individual factors

as: age, injury, duration of usage, consistency of use, the date of the relevant

usage, whether the claimant used Vioxx pre-or post-label adjustment, and the

claimant’s general health and medical history. Factors in the claimant’s medical

history that might affect the points award include smoking, cholesterol levels,

and whether the claimant or the claimant's family has a history of heart attacks

or ischemic strokes. 

The Settlement Agreement also provides for the disbursement of interim
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settlement payments to eligible claimants. In order to qualify for interim

payments, claimants must fulfill certain registration and filing obligations

according to the terms set forth in the Agreement. Pursuant to the terms of the

Agreement, certain claimants who timely fulfill all oftheir filing obligations may

qualify to receive interim settlement payments beginning on August, 1, 2008, or

the date on which the Claims Administrator has determined pre-review points

awards for a specific number of claimants, whichever is later, conditioned on

Merck’s waiver of its walk away privileges. On July 17, 2008, Merck began

funding the Settlement Program with an initial deposit of $500 million for

interim disbursements.

A preliminary injunction “is an extraordinary and drastic remedy, not to

be granted routinely, but only when the movant, by a clear showing, carries the

burden of persuasion.” Black Fire Fighters Ass'n of Dallas v. City of Dallas, Tex.,

905 F.2d 63, 65 (5th Cir. 1990) (quoting Holland Am. Ins. Co. v. Succession of

Roy, 777 F.2d 992, 997 (5th Cir.1985)).Thus,“the decision to grant a preliminary

injunction is to be treated as the exception rather than the rule.” Miss. Power &

Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir.1985). The

burden of persuasion requires that the movant show the existence of four

separate factors: (1) a substantial likelihood of success on the merits; (2)

irreparable injury; (3) a favorable balance of hardships; and (4) no adverse effect

on the public interest. Black Fire Fighters Ass’n, 905 F.2d at 65. If the movant

fails to sufficiently establish any one of these four factors, the court should

decline to issue the preliminary injunction. See Enterprise Int'l, Inc. v.

Corporacion Estatal Petrolera Excuatoriana, 762 F.2d 464, 472 (5th Cir. 1985).

Applying the foregoing principles, the district court concluded that the

appellants had failed to carry their burden of persuasion as to any of the

requirements for a preliminary injunction. Accordingly, it denied the appellants’
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motions for preliminary injunctive relief. The appellants appealed.

We now review the district court’s decision to deny preliminary injunctive

relief under “an abuse of discretion” standard. Black Fire Fighters Ass’n, 905

F.2d at 65. “The court’s determinations as to each ofthe four elements are mixed

questions of fact and law reviewed according to the clearly erroneous standard.”

Id. After considering the parties’ written and oral arguments, we agree with the

district court’s assigned reasons, and therefore conclude that the district court

did not abuse its discretion. Accordingly, we affirm the district court’s judgment.

In agreement with the district court’s reasoning, we conclude that: 

(A) The appellants failed to demonstrate, for purposes of asserting liens

under ERISA, that an identifiable fund potentially susceptible to such liens are

currently within the possession and legal control of the appellants’ plan

beneficiaries or their agents. See Sereboff v. Mid Atlantic Medical Services, 547

U.S.356 (2006); Great-Western Life & Accident Ins. Co. v. Knudson, 534 U.S. 204

(2002); Bombardier Aerospace Employee Welfare Benefits Plan v. Ferer, Poirot

& Wansbrough, 354 F.3d 348 (5th Cir. 2003). Without a substantive right to

enforce against the defendants, the appellants clearly are not entitled to any of

the extraordinary equitable remedies they seek. The appellants therefore have

no substantial likelihood of success on the merits nor will they suffer any

irreparable harm if equitable relief is not granted. 

(B) The appellants admit that they have no plan-beneficiary relationship

with or potential claim against approximately 31,000 (two-thirds of the total) of

the individual Vioxx claimants in this case. Allowing the appellants to delay the

entire settlement and distribution process and thereby withhold long-awaited

relief to innocent persons, who have no relationship with and owe no possible

debt to the appellants, would constitute a serious miscarriage of justice. The

potential delay and the attendant costs to these innocent persons caused by the
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granting of any equitable relief at this stage outweigh any damage to the

defendant if equitable relief is not granted. Likewise, the granting of equitable

relief would disserve the public interest by stalling and disrupting the longawaited resolution to this massive tort case and the disbursement of muchneeded relief to these numerous innocent persons.

In particular, we are persuaded by the district court’s reasons for

concluding that the appellants had failed to demonstrate that there is a

substantial likelihood of their success on the merits. After reviewing the

principal Supreme Court and circuit court precedents, the district court stated:

As an initial matter, the Court notes that the instant case differs in

both kind and degree from the litigation at issue in the Sereboff and

Bombardier line of cases. In Sereboff, for example, the Supreme

Court dealt with a single plaintiff moving against a single defendant

to enforce the terms of a single contract provision in order to recover

a specified amount of money from a single, identifiable fund in the

possession of the defendant. 547 U.S. at 359. In contrast, the

[plaintiff-appellants] seek to enjoin distribution of an unallocated,

multi-billion dollar settlement fund to enforce an unknown number

of contract provisions against an unknown number of claimants to

recover an unknown amount of money.

The Plaintiffs seek to define the issue more narrowly. Extrapolating

from the Supreme Court’s holding in Sereboff, the Plaintiffs argue

that each individual health plan in the instant action has a

substantial likelihood of success against each individual claimant

who has received Vioxx-related medical benefits from that plan. For

several reasons, the Court declines to accept the Plaintiffs'

characterization. First, there are wide discrepancies between the

provisions in the health plans Plaintiffs seek to enforce. Second,

Plaintiffs attempt to enjoin distribution of funds to claimants who

have no relation to the Plaintiffs, and against whom the Plaintiffs

have no claim whatsoever, let alone a substantial likelihood of

success on the merits. Third, the Court finds that the injunction

sought by the Plaintiffs does not constitute appropriate equitable

relief under the Sereboff and Bombardier line of cases.
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* * *

With little precedent bearing directly on the uncertainties in the

instant case, the Court turns to the fundamental, three-part

analysis set forth in Bombardier to ground its inquiry. In

Bombardier, the Fifth Circuit established three considerations for

determining whether a plaintiff seeks appropriate equitable relief

under § 502(a)(3) of ERISA: “Does the [plaintiff health plan] seek to

recover funds (1) that are specifically identifiable, (2) that belong in

good conscience to the [plaintiff], and (3) that are within the

possession and control of the defendant beneficiary?” 354 F.3d at

373. Pursuant to this analysis, the Fifth Circuit held that the

Bombardier health plan sought appropriate equitable relief under

ERISA when it asserted an equitable lien against settlement funds

held in a trust account by the beneficiary's attorney. Id.

Turning to the case at hand, the Court first looks to see whether the

Plaintiffs are seeking to recover funds that are specifically

“identfiable” within the contemplation of the Sereboff and

Bombardier line of cases. In most of those cases, the specifically

identifiable funds were already awarded to the beneficiary pursuant

to a judicial award or extra-judicial settlement agreement. The

Supreme Court noted inSereboff,for example,thatthe fund atissue

was the same fund that had been “identified” by the terms of the

plan itself--the beneficiary's recovery from the third-party

tortfeasor. 547 U.S. at 364. At this early stage of the Vioxx

Settlement proceedings, however, the Claims Administrator has not

finished determining which claimants are eligible for funds or

allocating points to individual claimants so as to determine the

amount of recovery pursuant to a formula for translating points to

dollar amounts. As a result, the Court has no reliable means of

determining which claimants will even receive funds, much less the

amount of money that they will receive. Further, none of the

exemplar health plans offered by the Plaintiffs designates an

unallocated settlement fund like the one in the Vioxx Settlement as

an “identifiable” fund from which the plan may collect, and this

Court doubts very much whether such a provision would be

enforceable. As a result, the Court finds that there is no

“identifiable” fund against which the Plaintiffs may assert their

liens.
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Proceeding to the second prong of the Bombardier analysis, this

Court is unable to determine whether any portion of the funds at

issue might belong in good conscience to the Plaintiff health plans.

The Court's difficulties in this respect are attributable in large part

to the uncertainties inherent in the Plaintiffs’ request. As a

threshold matter, the Court recognizes that it is possible, even

likely, that a significant portion of the settlement funds do--or,

perhaps more accurately, will at some point in the future--belong to

some of the Plaintiff health plans. Whether those funds belong in

good conscience to the Plaintiffs at this stage of the settlement

proceedings, however, is doubtful. In addition, it is beyond dispute

that the settlement funds of claimants who have not received

benefits from the Plaintiffs do not--and will never--belong to the

plans. Because the Plaintiffs are unable to tailor their proposed

injunctions to apply to only those claimants for whom they have

provided medical benefits, the Court finds that the Plaintiffs'

proposed injunctions will delay disbursement of funds that do notin

good conscience belong to them.

Finally, in response to the third question raised by Bombardier, the

Court finds that the funds in the Vioxx Settlement Program are not

currently within the possession or legal control of the plan

beneficiaries against whom the Plaintiffs seek restitution. In

Knudson, the Supreme Court found that the funds were not within

the beneficiary's control when the funds had been placed in a special

needs trust pursuant to California law. 534 U.S. at 215. Similarly,

claimants in the Vioxx Settlement Program do not have possession

over the lump, unallocated settlement fund currently held by

BrownGreer. At this early stage of the proceedings, with no final

determination regarding valuation of claims or even total points

awarded, the Court harbors serious doubts as to whether any

individual claimant even has a legal right to a portion of the fund.

Even if the claimants do have such a right, however, the Plaintiffs

would not be entitled to enjoin the funds of claimants who are not

their beneficiaries. As a result, the Court finds that the Plaintiffs

seek to enjoin funds that are not within the possession or legal

control of their plan beneficiaries.

For the reasons listed above, the Plaintiffs cannot demonstrate a

substantial likelihood of success on the merits. First, the wide
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discrepancies between some of the plans, including the threshold

determination of whether the plans are governed by ERISA at all,

raise serious doubts as to the enforceability of all plans at issue for

equitable relief. Second, the Plaintiffs’ proposed injunction would

delay distribution of interim payments to claimants against whom

the Plaintiffs have no claim at all. Third, pursuant to the analysis

set forth in Bombardier, there is no identifiable fund; the funds at

this time do not belong in good conscience to the Plaintiffs; and

individual claimants do not have possession or legal control over the

lump, unallocated settlement fund. In consideration of all of these

factors, the Court finds thatthe Plaintiffs in the instant action have

failed to carry their burden of persuasion in showing a substantial

likelihood of success on the merits

In re Vioxx, 2008 WL 3285912, at *11-12, *14-15 (E.D. La. August 7, 2008).

For all of the foregoing reasons, we conclude that the district court did not

abuse its discretion in denying the appellants’ motions for equitable relief. The

district court's judgment is AFFIRMED.