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Libby Pleads Not Guilty; Victory for Merck in Vioxx Case

Aired November 03, 2005 - 10:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: It is indeed a morning where a lot is happening coast to coast.
First to New Jersey. Want to tell you that jurors have reached a verdict in the second product liability lawsuit against Merck and Company. This is over the painkiller Vioxx. In this particular case, it's a postal worker from Idaho, Frederick Mike Humeston. He is saying that Merck misled the public about the former blockbuster arthritis drug's cardiovascular risks. He suffered a heart attack while taking Vioxx. So we're waiting to hear what the jury came to on that case.

Also out of California, there is two missing girls. Two young girls in Chatsworth area in southern California. They had gone horseback riding and left their homes around 5:30 this morning local time to go horseback riding. They never showed up. Police have been called into the case. Any minute, we do expect to hear from the Los Angeles Police Department on the search for these two missing girls.

In fact, I have Kristi Sandoval from the Los Angeles Police Department on the phone with me right now. Kristi, what can you tell me about this case?

KRISTI SANDOVAL, LOS ANGELES POLICE: At this point, we have two young girls, ages 10 and 13, who have been missing since last evening at about 5:30. They left their home, or one of the girls homes, in the Chatsworth area to go horseback riding, which is a regular occurrence for them. It's a few minute walk to the stables.

And their parents became concerned after about 9:30 when they didn't come home. They checked with the stables. The girls apparently never made it to the stables. At which point they called the police department. And since then we have been in a very coordinated effort looking for these two young girls.

KAGAN: So this isn't the case of the girls going out on the horseback ride and getting lost, because, as you said, they never made it that far.

SANDOVAL: No. Our -- the information we have is that they never made it to the stables.

KAGAN: And according to their parents, these are not girls who would have got run away or gotten into trouble in that way.

SANDOVAL: No, as far as we know, this is not a -- running away is not something that the parents would have expected them to do. But at the same time, we also don't have specific information that they have been abducted. We don't have any witnesses who saw any foul play.

So our concern right now is simply finding the girls and bringing them home safely. Like I mentioned, they're 10 and 13. And for those girls of that age to be out all night long is concerning, obviously.

KAGAN: Absolutely. And while I have you on the phone, let me share the description that I've been handed. Grace Freymiller, she's the 13-year-old?

SANDOVAL: Yes.

KAGAN: Five feet tall, 120 pounds, brown hair, hazel eyes, last seen wearing a blue shirt, blue jeans and black boots.

SANDOVAL: Yes.

KAGAN: And then Amanda Quaglino?

SANDOVAL: Quaglino, yes.

KAGAN: Five seven, 190 pounds, brown hair, brown eyes, last seen wearing a pink shirt, blue jeans and tan tennis shoes. Christy, if you could describe for us how -- what this area is like between the home and the stables where they were headed.

SANDOVAL: It's a rural area. It's a residential area, but a lot of horse property and horse stables.

KAGAN: Kristi, let me just jump in here. Because our affiliate...

SANDOVAL: Wait, I'm just telling you. We've got information, actually. I don't have it confirmed, but there is preliminary information that the girls have just been found in...

KAGAN: Right, that's what we're hearing, too.

SANDOVAL: ... Chatsworth area.

KAGAN: Well, that would be excellent news, indeed.

SANDOVAL: Excellent news.

KAGAN: You know what. I'm going to let you go.

SANDOVAL: OK, perfect.

KAGAN: And hopefully we can update this story in just a few minutes. And it does sound like it has a happy ending. Once again, the search for the two girls in Chatsworth in Southern California, it does appear it has a good resolution. They'd been missing since 5:30, when they told -- yesterday, when they told their parents they were going to go horseback riding. All right, let's hope we can put that one to the side. Big story in Washington, D.C., where former White House aide Scooter Libby is in court right now. It's his first court appearance since being indicted in the CIA leak investigation.

Our national correspondent Bob Franken, outside the courthouse, joining us now with more. Bob, good morning again.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning. And inside the courthouse in the large ceremonial courtroom that is being used because of the wide interest in this, the proceedings have just begin, the arraignment proceedings. This is the first step following the indictment in the legal process for Lewis "Scooter" Libby.

This is where he will be -- make his plea to the charges that have been leveled against him, obstruction of justice, perjury, false statements. These are the charges that he's expected to plead not guilty to in this investigation into the CIA leak.

As I said, the proceedings have just begun, literally within the last minute, just gavelled to order. It is part of a normal process now, where the charges will be laid out or he can waive the reading of the indictment. As Jeff Toobin told us earlier, he will make his plea. Unless there is some incredible surprise, that plea will be not guilty to all of the charges -- Daryn.

KAGAN: All right, Bob, we're back with you in just a couple of minutes. Let's get some perspective now on the Libby case and its impact on the White House.

For that we turn to our CNN senior political analyst Bill Schneider in our Washington bureau. Bill, always good to see you.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Good morning, Daryn.

KAGAN: So interesting to talk to both sides on this case, isn't it? And what the Democrats are doing for what could -- some say would be a disappointment that they did not get the kind of indictment they might have hoping for from this special counsel investigation.

SCHNEIDER: Well, a lot of Democrats and critics of the White House were expecting to hear an indictment of the White House Deputy Chief of Staff Karl Rove. That didn't happen, though Rove is still under investigation by the special prosecutor. He's not out of the woods yet, but he has not been charged.

What Democrats are doing is trying to keep this case in the public's attention, keep it on the front burner, because they believe this case raises a central issue which hasn't, in their view, gotten a lot of discussion. And that is the Iraq issue. Somebody in the White House leaked the name of a CIA secret agent. We don't know who. Nobody has been charged.

The crimes that Scooter Libby is being arraigned for today all making false statements and perjury to -- in the process of the investigation. The responsibility for the CIA leak has never been assigned.

KAGAN: Bill, let me just add this. We're getting word from inside the courthouse that, indeed, as expected, Scooter Libby has entered a plea of not guilty on all of these charges. And our John King is in the courtroom and he'll be out in just a minute.

But, while I still have you, I want to ask you a question that I asked Ed Henry yesterday. Depending who you watch and who you listen to on this, either the Democrats are imploding or the Republicans are imploding. And you're able to spin all of these stories kind of any way you want it. How do you see it, Bill?

SCHNEIDER: Look, both sides see a very hot issue here. It's a legal issue. It involves criminal charges. There's a lot of spinning going on in all directions here. With the White House attempting to carry on business as usual, giving -- hoping to give the president a fresh start. He nominated Judge Alito on Monday. On Tuesday, he talked about bird flu. Today he's going to Latin America and the White House theme is move on. They want to get this behind him.

The Democrats don't want to move on, because they believe that this issue raises squarely the question of how did the United States get involved in the Iraq war? Was there misrepresentation of the evidence? Who is responsible for the intelligence failures? They're trying to pressure the Republicans in Congress to pursue that investigation and they believe this issue has a lot of political mileage in it.

KAGAN: Bill, stay with us. I want to go back and bring Jeffrey Toobin back in from New York City, once again, on this news we're just getting into CNN. Scooter Libby pleading not guilty, as expected.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Indeed. You know, one thing I forgot to mention earlier that they will deal with today is the issue of bail. He is, after all, charged with a crime and he will have to be released on bail.

It will be interesting to see whether the judge simply releases him on his own recognizance, which is quite possible, given the fact that the prosecutors are unlikely to say that he is a danger to the community or likely to flee. Those are the two factors that usually come up in bail. Or will he make him sign -- will he make Scooter Libby sign a bond which says I promised to pay $100,000, $500,000 if I don't come back to court. It will just be an interesting indication of how Judge Walton is approaching the case. I don't have any doubt that Scooter Libby will be released on bail, however.

KAGAN: We can't say he'll walk out because of those crutches. Fleeing might be a little bit of challenge.

TOOBIN: Yet another reason why he'll get out of...

KAGAN: With the cameras and the crutches, he may not be going...

TOOBIN: I don't think he's going anywhere. KAGAN: ... too far. I heard you talking earlier, Jeff. You were saying that even the issue of who the lawyers will be in this case has still to be decided. That seems incredible to me.

TOOBIN: Well, throughout this investigation, Scooter Libby has been represented by Joseph Tate, who is a Philadelphia-based lawyer at a firm where Libby himself used to be a partner. He is not someone who's experienced in trying a lot of white collar criminal cases, especially in Washington.

You know, through all of the Washington scandals that we've covered, whether it's Monica Lewinsky or going back to Iran-Contra, there is a group of lawyers in Washington who specialize in these cases. And sometimes they win and sometimes they lose, but they tend to be the people who are retained to do the actual trials. And it will be interesting to see if Libby brings in one of those people or someone from outside Washington, who is a more experienced trial lawyer.

I do know that Tate -- Libby has been talking to people about joining the team. That's one of the things that will -- we may learn something more about today. But given the pace at which this is likely to go, the slow pace, that may not be resolved today.

KAGAN: A bunch of hurry up and stop -- hurry up and wait.

Bob Franken, I want to bring you back in here. Jeffrey Toobin was mentioning Monica Lewinsky. Give us some historical perspective here on this courthouse.

FRANKEN: This courthouse...

KAGAN: How this is some place you're very familiar with.

FRANKEN: Yes, I think I've spent more time here than just about any building in Washington, regrettably including my house, I think. But this is a building that has been the site of trials such as the Watergate trials that were conducted here. It was the grand jury, home of the grand jury that pondered such cases as Monica Lewinsky. There have been any number of historical things that have been taking place here.

By the way, you get to ask Jeff Toobin, one of the questions I was wondering, is whether the passport, Scooter Libby's passport, would be taken away as a normal procedure.

I want to point out, by the way, that when he entered the not guilty plea -- everything about this is detailed in the high drama that's occurring -- Scooter Libby himself said that he was not guilty on each of the five counts. He did not rely on his lawyer to do it.

And one other point that Jeff was talking about a moment ago, and it's the group of lawyers in this town that specializes in such cases, I've been told by several of them, the like of Plato Cacheras (ph) and the like, that they have really two jobs. Number one is the to protect the person legally, but also to try and make sure that his reputation that is so, so important in Washington, that his reputation is protected or restored. So these people who have the specialty have a very delicate dance to perform as wind their way through the legal system.

KAGAN: All right, Bob, I will back to the passport question when I get back to Jeffrey Toobin, Bill Schneider and John King, who's inside the courthouse. We do expect to hear from him in just a moment. They're going to stay with us.

Before we go to break, I want to pass on to you the verdict in the Vioxx case. This was the second big Vioxx case taking place. This one in New Jersey, and this is a big win for Merck. In this major victory for Merck and Company, this jury in New Jersey ruling today that the drugmaker did properly warn consumers about the risks of the painkiller Vioxx. That finding does mean Merck will not be held liable for the 2001 heart attack that was suffered by the man who was taking the drug.

This is a different outcome than the first round which took place in Texas. The plaintiff there, the woman of a man who died while taking Vioxx. She was awarded over $200 million. That case on appeal. So more on Vioxx. Much more from Washington D.C. We'll get to that after this break.

(COMMERCIAL BREAK)

KAGAN: Once again, this breaking news out of New Jersey. It is a major victory for drug company Merck and Company on a trial concerning Vioxx and a mail carrier who said he was taking Vioxx for a couple of months and in 2001 suffered a heart attack. The verdict going against that mail carrier, and instead toward Merck and Company.

Our Chris Huntington is covering the trial and joins us now from New Jersey. Actually you look like you're in our New York bureau.

CHRIS HUNTINGTON, CNN CORRESPONDENT: I'm in New York, Daryn.

We're getting excerpts here from the decision reached by the jury. This is indeed, as you pointed out, a turn of events in favor of Merck, because there are some 7,000 lawsuits out there, claiming that Merck did not adequately warn doctors. The first trial that came through to deliberation was one in flavor of the plaintiff and a big award. That was in Texas. This trial in Atlantic City, New Jersey, the jury finding that Merck did indeed provide adequate warning to doctors that Vioxx could potentially lead to cardiac problems.

The whole issue here is whether or not Merck was truthful with the medical community, with patients that Vioxx could indeed lead to strokes and heart attacks. Merck finally, as you may recall, a little more than a year ago, finally admitted to those conclusions on its own and pulled Vioxx from the market, but the crucial conclusion that Merck had reached is that the heart attack problems, the cardiac problems, really only showed up after people had been taking Vioxx for 18 months. In the case of this gentleman, a gentleman known as Fred, who's known as Mike Houston (ph), from Boise, Idaho, is that he'd only been taking Vioxx for two months. So that may have been a factor in the jury's decision.

But the word from the Atlantic City jury is that Merck did provide adequate warning, and apparently not liable for the problems that led to the postal worker's heart attack.

KAGAN: Any indication, Chris, about why this verdict in the trial would go so differently than what took place in Texas? Is it Merck learning lessons from that trial and presenting his case differently?

HUNTINGTON: Well, Merck, has -- in a sense, as these trial goes on, both sides, plaintiff's sides and Merck, learned more about how to plead their cases. In this particular trial, Merck relied on expert testimony of a doctor from Harvard who basically testified on behalf of Merck, that indeed there was adequate warning out there in the medical community.

And indeed from our research, Daryn, and our reporting, there was, in some sense, warning out there to cardiologists. It seems that there was a split. The cardiologists became aware that Vioxx might have been a problem. The rheumatologists treating arthritis apparently were not so aware, and that may have been where the split was. Merck has been able to sort of exploit that, if you will, that kind of rift in the medical community, apparently to its advantage in this case.

All right, Chris Huntington from New York, thank you. More on that ahead. Also a lot more from Washington D.C. Just moments ago, Scooter Libby entering the plea of not guilty on all five charges that he faces in the special counsel investigation.

Our John King making his way out of the courthouse. We'll be to him in just a moment.

Meanwhile, we' check the markets one more time. They've been open about an hour and 15 minutes. Still continuing to look strong. The Dow is up 70 points, and Nasdaq continues to climb as well. It is up 17 points.

We are back after this.

(COMMERCIAL BREAK)

KAGAN: Just moments ago, former chief of staff for Vice President Dick Cheney, Scooter Libby, entering the plea of not guilty to the crimes he has been indicted for in the wake of the 22-month special counsel investigation.

No cameras in the courtroom because it is a federal courtroom, so our eyes and ears today, John King, who just made his way out of the federal courthouse in Washington, D.C. John, hello.

JOHN KING, CNN CORRESPONDENT: Hello to you, Daryn.

Lewis Libby, Scooter Libby, as many of us have known him for many years, is generally a man of a few words in public. Of course, words he may or may not have spoken to reporters will be an issue when this case comes to trial. He spoke 15 words in the courtroom today. He, of course, being arraigned on a five-count indictment, charging him with obstruction of justice and perjury.

Lewis Libby is his formal name. He stepped up to the podium and said, "Yes, I do," when the judge asked him if he wished to enter a plea. And then he said, "With respect, your honor, I plead not guilty." Eleven words there. Then he spoke four more words during the proceedings later when the judge asked him if he was waiving his right to a speedy trial.

There are a number of issues involving classified information. Attorneys on both sides indicating it could take weeks, if not months, just to resolve access to that information, nevermind how that information then will result in motions by the defense and the like.

You see the special prosecutor, I'm told, Pat Fitzgerald, leaving the U.S. Courthouse. He spoke for the government today, obviously. Scooter Libby also said "I am, your honor" when asked if he was waiving his right for a speedy trial. The next court date will be February 3rd. The judge making clear, though, he expects only a status hearing because of the complicated issues in this case.

And, Daryn, as he left the courtroom, Mr. Libby is now at the U.S. Marshal's office. He is being processed, like any criminal defendant would be. He must fill out paperwork and other things, essentially to make himself a defendant before the court. He signed many papers in the courtroom, has to now be processed in the Marshal's Office.

As he was leaving, he's still on crutches with a broken foot. I asked him how he was holding up. He nodded and smiled and he said, this isn't where I'm used to seeing you. In the courthouse today, obviously someone who I deal with usually at the vice president's office at the White House. He, of course, has resigned because of this indictment.

KAGAN: That would be an understatement. Jeffrey Toobin earlier brought up the question of bail. Is he free to go after he's finished at the Marshal's office?

KING: He is free to go. He was released on his personal recognizance. The special prosecutor, Patrick Fitzgerald, said that he was not going ask for any monetary bail. He said he was fine with Mr. Libby being released on his personal recognizance. And as Mr. Fitzgerald was telling the court that, the judge made clear -- he interjected, saying I was going release him on personal recognizance.

Obviously, this is someone who was a public servant for a long time. He is charged with very serious crimes in this indictment, but he is also given the benefit of the doubt that he, of course, is not a risk to flee. Released on personal recognizance. Again, the next date, February 3rd.

One of the more fascinating discussions, though, Daryn -- it was only a nine minute hearing, but one of the more fascinating discussions was the issue of classified information. So much of the evidence Pat Fitzgerald told the court is classified government information. So not only are they trying to have some of that declassified -- the special prosecutor said that process has already begun and he hopes it turn over that evidence. The process is called discovery. Turn over that evidence to lawyers, the defense lawyers, as soon as possible.

But he also brought ten stacks of documents for the defense lawyers to fill out so that they can get a security clearance, so that they can have access to more classified information. That process alone could take four to six weeks. So this case will not be on a fast track.

And I should note, as I say, lawyers, plural. Mr. Libby was with Joseph Tate, who represented him during the grand jury proceedings. But he also had several new attorneys today. William Jeffress was the defense attorney who spoke in court most frequently. Another defense attorney, Ted Wells. They were the two lawyers who flanked Scooter Libby today. So it is clear as this goes forward, other lawyers will become more prominent, much more prominent, in his defense.

KAGAN: All right, John, you stay with us. I want to bring Jeff Toobin back in from New York City and give us your take of what you hear of what John King has reported of what took place in that nine- minute hearing, as he described.

TOOBIN: Just a couple of things. Ted Wells. I did not know Ted Wells was going to be involved in the case. He is a very successful lawyer. Used to be based in New Jersey, now based here in New York. He is a superb trial lawyer, has won very important acquittals in white collar cases. Scooter Libby, obviously got a lot of good advice about which lawyer to hire in Ted Wells. I'm sure will be a very important presence in the case.

Classified information, as I mentioned. That was obviously going to be a big deal. And think about this. I was one of the prosecutors long ago in the Oliver North case in that very courthouse. And one of -- there was lots of classified information there. The defense in that case had to set up an entire separate office to store the classified information.

Because you can't just -- even if a private lawyer has a security clearance to get access to classified information, you can't just put it in your desk drawer in a miscellaneous office building. You have to have what's called a skiff, which is a place that's secured and guarded for classified information. That's something that takes up -- takes a lot of time to set up.

And John said the next status conference is February 3rd. February 3rd is a pretty long time from now.

KAGAN: That's true.

TOOBIN: And you know, nothing much, it sounds like, is going to happen between now and February 3rd. So this case sounds like it is going to be months in the making. And it just shows that the complexity, pre-trial, is going to be considerable and the delay will be as well.

KAGAN: Well, and as you were predicting, not a surprise that Scooter Libby waiving his right to a speedy trial.

One more point from John King here -- John.

KING: And Daryn, I hope you can keep Jeff Toobin standing by. Because one of the interesting things -- Jeff's right, February 3rd is not right away. But that is because -- in part because of the classified information.

But another quite interesting point. Mr. Jeffress, speaking for Mr. Libby in court, said that would be one reason he believes it will take some time for the defense to be ready in this case. And remember, the defense will challenge this indictment. Once it sees the evidence, it will come forward with a flurry of motions, challenging the very basis of the indictment.

But the other point Mr. Jeffress said is that he expects perhaps extended litigation on First Amendment issues. So the defense signaling at the hearing today they are going to want to talk to, and perhaps get access to the notes, the phone records and other records of the reporters who could be involved as key witnesses in this case. Matthew Cooper, Judith Miller, to name two who we know will be pivotal when it comes to the charges against Mr. Libby. So the defense saying it expects extended litigation on First Amendment issues that could drag this case out as well.

KAGAN: And I see Jeff chomping at the bit. You brought up some fascinating issues, both of you. We'll continue our conversation in the next hour. Got to fit in a break. We're back in just a minute.

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