The Delaware Supreme Court Monday reversed a lower court and held in a divided opinion that Chubb Ltd. units aren't obligated to defend Rite Aid Corp. in opioid litigation filed by two Ohio counties.
Rite Aid units have been named in more than the usual thousand lawsuits by government entities, third-party payors of medical care and people seeking damages for costs arising out of the company's distribution of opioids.
The focus of Monday's ruling was so-called “Track One” lawsuits filed by government entities.
A 2022 policy issued by Chubb units states it'll pay sums the insured becomes legally obligated to pay as damages because of “personal injury” or “property damage,'” based on the ruling in Ace America Insurance Co. et al. v. Rite Aid Corp. et al.
Camp Hill, Pennsylvania-based Rite Aid sought defense coverage for lawsuits filed against it by Cuyahoga and Summit counties in Ohio, the Supreme Court ruling said. The counties' lawsuits “expressly disavow claims for personal injury and seek only their own economic damages,” the ruling said.
The Delaware Superior Court ruled in September 2022 that Chubb was obligated to defend the pharmacy chain “because there was arguably a causal link between the counties' economic damages and the injuries to their citizens from the opioid epidemic,” the final Court ruling said.
A most of the Delaware Supreme Court disagreed. “To recover underneath the insured's policy like a person or organization that directly looked after or treated the injured person, the plaintiff must prove the costs of caring for the individual's personal injury,” the ruling said.
“Here, the plaintiffs, governmental entities, sought to recuperate only their very own economic damages, specifically disclaiming recovery for private injury or any specific treatment damages.
“Thus, the carriers did not have an obligation to defend Rite Aid underneath the governing insurance plan,” the opinion said in overturning the lower court and holding that Chubb had no duty to defend Rite Aid.
The dissenting opinion said Chubb's duty to defend is broader than its duty to indemnify damages.
“I would discover that Rite Aid's policy provides coverage for some of the damages sought by the Counties, at least potentially,” and affirm the lower court's ruling, it said.
Attorneys in the case did not react to requests for comment.
