Court rules insurers aren't liable for Rite Aid opioid defense
The Delaware Supreme Court ruling absolving the pharmacy chain's insurance companies of liability passed 4-1.
A ruling by the Delaware Supreme Court has declared two insurers will not have to defend Rite Aid against opioid claims in an Ohio federal court.
The two Ohio counties that sued Rite Aid were only seeking economic damages from the pharmacy chain, wrote Chief Justice Collins J. Seitz in the majority opinion Monday, January 10, 2022, and specifically didn’t prove what costs were incurred by those who treated individuals affected by opioid use.
The opinion reverses a Superior Court September 2020 summary judgment that found a causal relationship existed between the counties’ economic damages and the injuries suffered by the citizens of those counties, with the lower court’s decision holding the insurance company responsible for coverage of the latter.
“Three classes of plaintiffs are within the scope of the insured’s personal injury coverage—the person injured, those recovering on behalf of the person injured, and people or organizations that directly cared for or treated the person injured,” Seitz wrote. “To recover under the insured’s policy as a person or organization that directly cared for or treated the injured person, the plaintiff must prove the costs of caring for the individual’s personal injury. Here the plaintiffs, governmental entities, sought to recover only their own economic damages, specifically disclaiming recovery for personal injury or any specific treatment damages.”
Insurers headed by Chubb Limited were represented by Ross Aronstam & Moritz, White & Williams, O’Melveny & Myers and Holwell Shuster & Goldberg, with Rite Aid represented by Morgan, Lewis & Bockius.
Both sides agreed Rite Aid’s 2015 insurance policy with Chubb held Chubb responsible for defending Rite Aid in any lawsuits seeking damages “for” or “because of” personal injury. What Chubb argued before the Superior Court was that whether that provision applies depends on whether such a personal injury was suffered by a plaintiff themselves or by someone asserting bodily injury liability derivatively.
Justice James T. Vaughn was the only Supreme Court justice to dissent, writing the court could have found the insurers had broader obligations in the full context of the MDL allegations. In addition to “personal injury” encompassing opioid addiction itself, Vaugn wrote, because the MDL complaint claims the opioid epidemic as an alleged public nuisance could be taken care of in part by providing addiction treatment, it can be interpreted as asking Rite Aid to pay for treatment of patients to do so.
“It appears plain to me that the counties intend to prove that Rite Aid, along with other drug distributors and others, caused the personal injury, that is, the alleged opioid-addiction epidemic, that is at the heart of their claims. It also seems plain that the counties intend to seek damages for costs incurred by them for the care, loss of services or death resulting from opioid addiction,” Vaugn wrote. “By insuring damages because of personal injury, and defining such damages to include amounts spent by any organization for the care, loss of services or death resulting from the personal injury, the policy extends coverage to what can be termed economic costs associated with that care, loss of services or death. Therefore, some of the relief sought by the counties, at least potentially, falls with the policy’s coverage.”