Salvatore J. Graziano

Learning What the Fact Finder Needs

Salvatore J. Graziano’s path into trial work began during his third year at New York University School of Law. An intensive criminal-law clinic put him in court and led, unexpectedly, to the Manhattan District Attorney’s Office. He later described that period as the place where he learned what judges needed to know and what jurors expected to see. He learned to master the record, select the decisive facts, and present them in the order a judge or jury could use.

Investor litigation kept the prosecutorial work Graziano valued after he left public service. He could investigate alleged wrongdoing, test a company’s account against documents and witnesses, and present a civil case that government agencies might lack the resources to bring. Securities actions added another burden. The underlying subject could be a clinical trial, the economics of a bank’s sales program, a company’s accounting judgments, or the effect of cryptocurrency demand on a chip maker’s revenue. Counsel had to understand the industry before asking a court or jury to understand the claim.

Graziano is a partner and member of the Executive Committee at Bernstein Litowitz Berger & Grossmann. His work is performed with case teams, institutional plaintiffs, co-lead counsel, appellate specialists, experts, and claims administrators. His documented contribution has often been to lead the BLB&G team and keep that group moving toward a record that can survive legal challenge and be used at trial. The results described below came from years of work by those teams.

Staying With Vioxx

The Vioxx securities litigation began with allegations that Merck and several officers and scientists misled investors about the cardiovascular risks and commercial prospects of the prescription pain medicine. Merck withdrew Vioxx worldwide on September 30, 2004. Investors alleged that earlier public statements had concealed material safety evidence and inflated the price of Merck securities. The defendants contested liability, and the eventual settlement contained no admission of wrongdoing.

The first decisive dispute concerned time. A district court dismissed the action as untimely, but the Third Circuit reversed. In 2010, the Supreme Court unanimously allowed the investors’ case to proceed. The Court held that the two-year limitations period for a federal securities-fraud claim begins when a reasonably diligent plaintiff discovers the facts constituting the violation, including facts showing the defendant’s state of mind. Suspicion that would prompt an investigation did not, by itself, start the clock. Graziano led BLB&G’s work during the decade-long litigation; the Supreme Court briefing and argument were the work of the investors’ broader appellate team.

After remand, the investors still had to prove the case. The district court sustained the central allegations at the pleading stage and later certified a class. Fact and expert discovery included fifty-nine depositions, fourteen of them expert depositions, and review of more than thirty-five million pages produced by defendants and third parties. The experts addressed biostatistics, cardiology, drug regulation, gastroenterology, damages, and other subjects. Each field supplied a different link between the clinical record, the challenged statements, and losses in the market.

In May 2015, the district court largely denied Merck’s summary-judgment motions. It found evidence from which a reasonable jury could conclude that defendants knowingly or recklessly misled investors when discussing studies and data bearing on Vioxx’s cardiovascular safety. The court narrowed other statements out of the case. Expert motions followed, and trial was set for March 1, 2016. By the time the parties reached an agreement in principle, they had submitted a proposed joint pretrial order containing contested facts, deposition designations, witness lists, and exhibits.

The settlement separated compensation from fees and expenses. Merck paid $830 million into a fund for the class and another $232 million into a fund for court-awarded attorneys’ fees, litigation expenses, and the special master’s fees. Any unused balance in the second fund, after specified costs and taxes, was to be credited to the class fund. The court granted final approval on June 28, 2016. The claims process later concluded and the net fund was fully distributed.

The investors preserved their claim in the Supreme Court, developed the scientific and market evidence, defeated most of the summary-judgment challenge, and prepared witnesses and exhibits for trial. Graziano led BLB&G’s work within the broader team.

The ENHANCE Clinical Record

The coordinated ENHANCE litigation required a different account of pharmaceutical evidence. Schering-Plough and Merck marketed Vytorin, a combination of Zetia and generic simvastatin. The ENHANCE clinical trial compared Vytorin with simvastatin alone and found no statistically significant difference in the study’s measure of atherosclerosis. Investors alleged that the companies withheld the result while making statements about the drugs’ prospects. The defendants denied liability.

The Schering and Merck actions remained separate even as the courts coordinated them. The district court denied dismissal, certified classes, and denied summary judgment; the Third Circuit declined interlocutory review of the certification orders. Trial was scheduled for March 4, 2013. The Schering action settled for $473 million, and the related Merck Vytorin/Zetia action settled for $215 million. The court approved both settlements on October 1, 2013, for a combined $688 million.

Graziano led BLB&G’s team in the Schering case alongside co-lead counsel and the institutional plaintiffs. The proof had to connect the design and timing of a clinical study, the companies’ public descriptions of two cholesterol drugs, and the market’s response when results emerged. The related Merck action presented a distinct causation problem because Merck’s shares did not decline significantly after the initial disclosure. Keeping the two funds and their proof separate preserved the actual legal record.

Operations Behind the Disclosures

Wells Fargo moved the inquiry from a laboratory to a branch network. Investors alleged that the bank praised its cross-selling model and sales culture while employees opened millions of unauthorized accounts to meet performance targets. Union Asset Management Holding AG served as lead plaintiff, and BLB&G served as lead counsel. Graziano was one of the firm’s named case leaders with Adam Wierzbowski, Rebecca Boon, and Scott Foglietta.

The court refused to dismiss most of the claims in February 2018. The parties reached an agreement in principle that May and later executed a $480 million cash settlement. On December 18, 2018, the court approved the settlement and allocation plan; judgment followed on December 20. The administrator began distributing the net fund in 2020 and made later rounds. The settlement resolved disputed claims and did not convert every allegation in the complaint into a judicial finding.

The liability theory depended on a connection between daily operations and investor-facing statements. Cross-selling figures could appear to describe customer demand. The complaint alleged that pressure inside the bank produced unauthorized accounts and made that public explanation misleading. Documents, employee accounts, regulatory findings, executive testimony, and market evidence had to be assembled into one chronology. The evidence connected conduct inside the company to the meaning of its statements to investors.

Kraft Heinz required the team to trace cost cutting into brand value and reported financial results. After the 2015 merger of Kraft and Heinz, the company reported higher margins associated with cost reductions. Investors alleged that cuts to research, quality control, and the supply chain weakened brands and customer relationships while public statements overstated the sustainability of the savings. In February 2019, Kraft Heinz announced a $15.4 billion goodwill impairment and disclosed an SEC subpoena concerning procurement accounting. Defendants contested the investors’ claims.

Graziano and Katherine Sinderson were the firm’s named case leaders, with Erika Connolly on the case team and Kessler Topaz serving as co-lead counsel. The plaintiffs overcame renewed motions to dismiss, served subpoenas on twenty-three third parties, and reviewed more than 14.7 million pages produced by defendants and others. Mediation before former federal judge Layn Phillips produced a recommendation the parties accepted in February 2023. The court approved a $450 million cash settlement and entered judgment on September 12, 2023. The record reached from internal projections and procurement practices to the carrying value of household brands.

General Motors placed product safety inside the same disclosure inquiry. In February 2014, GM first recalled 779,000 vehicles and then another 842,000 because defective ignition switches could move out of position, shut off the car, and disable critical safety features. New York State Teachers’ Retirement System served as lead plaintiff. Graziano was one of the firm’s named case leaders with Gerald Silk, James Harrod, Adam Wierzbowski, and Rebecca Boon. The parties reached a $300 million cash settlement in September 2015 while a motion to dismiss remained pending. The district court granted final approval on May 19, 2016, and entered judgment four days later. An objector’s appeal and petition for Supreme Court review concluded without disturbing that judgment, and the claims administrator later made several distributions. Because the resolution arrived before a merits ruling on the complaint, the public record supports the allegations, settlement, approval, and distribution history; it does not establish the pleaded conduct as adjudicated fact.

Keeping Investor Claims in Court

Two Supreme Court matters in 2024 returned Graziano to the pleading rules that determine whether investors receive discovery. In the Facebook case, the dispute concerned risk disclosures that described data misuse as a possible event after Cambridge Analytica had obtained information from millions of users. In the NVIDIA case, the questions concerned how specifically investors must plead internal records, falsity, and scienter when alleging that cryptocurrency demand drove gaming revenue. Graziano appeared on the respondents’ briefs with lawyers from BLB&G, other investor firms, and Supreme Court specialists.

The Court heard argument in both cases and then dismissed each writ of certiorari as improvidently granted: Facebook on November 22 and NVIDIA on December 11, 2024. The Court announced no new rule in either order. The Ninth Circuit judgments remained in force, and the lower courts continued with each action on the records the investor teams had preserved.