The Ohio Court of Appeals on June 24 enforced liability insurance for a company that had distributed opiates, finding that the insured had a duty to defend the insured in lawsuits filed by government agencies and pending in the Opioid Multidistrict Litigation.  Acuity v. Masters Pharm., No. C-190176 (Ohio Ct. App. June 24, 2020).  A unanimous three-judge panel overturned a trial court decision that had accepted arguments of insurers that, because the underlying suits were brought by government entities seeking to recover for “their own economic loss,” the damages sought did not qualify as “damages because of or for a ‘bodily injury.’” Relying on the Seventh Circuit’s decision in Cincinnati Ins. Co. v. H.D. Smith, L.L.C., 829 F.3d 771 (7th Cir. 2016), the Court of Appeals acknowledged that “[t]he governmental entities are seeking their own economic losses,” but concluded that some losses at issue “(such as medical expenses and treatment costs) are arguably ‘because of’ bodily injury,” bringing policyholder claims “potentially within the policies’ coverage.”  Slip op. ¶ 30.  The trial court thus had erred in finding that the insurer had no duty to defend in the underlying opioid cases.

Continue Reading Insurers Have Duty to Defend Opioid Cases According to Ohio Appellate Court

Claims stemming from the manufacture, sale, distribution and prescription of opioid products continue to proliferate, fueling opioid liability as an historic mass tort.  Claims asserted in lawsuits brought by state and local governments include allegations of negligence, fraudulent misrepresentation, violation of consumer protection statutes, public nuisance, unjust enrichment, antitrust violations, and claims for medical monitoring and injunctive relief, among others.  In December 2017, the U.S. Judicial Panel on Multidistrict Litigation ordered the consolidation of approximately 200 then pending opioid related cases into a multidistrict litigation before the U.S. District Court for the Northern District of Ohio, styled In Re: National Prescription Opiate Litigation (MDL No. 2804) (the “MDL”). It was recently reported that two pharmacy chains involved in the opioid MDL are suing 500 physicians alleging it is the doctors, not the pharmacists, who are to blame for faulty prescriptions.  At the end of last week, the judge handling the MDL allowed claims against opioid companies by union benefit plans to proceed, concluding that the plans’ claims of harm differed from the injuries to health and safety suffered by the public at large.

Continue Reading Insurance Coverage for Claims Stemming From the National Opioid Crisis

A federal court in Illinois ruled recently, in Cincinnati Insurance Company v. H.D. Smith Wholesale Drug Company, that Cincinnati Insurance Company was required to indemnify H.D. Smith for a $3.5 million settlement it reached with the State of West Virginia.  The settlement resolved an action in which West Virginia alleged that H.D. Smith contributed to the state’s opioid addiction epidemic through its negligent distribution of opioid prescription drugs.

Continue Reading Opioid Settlement Triggers Insurer’s Duty to Indemnify Where Covered Claims Are “Primary Focus” of the Action