California Appeals Court Denies Insurance Coverage For Opioid Drug Makers Defense: Will other insurers say no to opioid coverage?

Profits over Patients Continues”

Mark York (November 15, 2017)

Mass Tort Nexus

 

 

 

 

 

 

 

(MASS TORT NEXUS)  On November 6, 2017 California’s Court of Appeals, Fourth Appellate District, ruled that Travelers Property Casualty does not have a duty to defend or indemnify Watson Pharmaceuticals (Activis, Inc), in a long running opioid related lawsuit based in Orange County Superior Court, as well as a second opioid related suit in Chicago.

TRAVELERS FILES DECLARATORY COMPLAINT

Watson Pharmaceuticals aka Activis, Inc., along with several other opioid manufacturers, were sued by two California counties and the city of Chicago in 2014. The claimants were seeking redress for costs related to the opioid epidemic in their respective communities. Travelers denied Watson’s demand to pay for its defense and subsequently brought a lawsuit against the drug company. Travelers filed a Complaint for Declaratory Judgment requesting the court declare that insurance coverage or indemnification of Watson-Activis under policies issued to Watson.

The California Court of Appeal detailed in its 31-page ruling that the policy covers damages for bodily injuries caused by an accident, and that the actions of Watson-Activis were intentional and not subject to policy coverage.

OPINION CLEARLY DENIES COVERAGE

“The California action and the Chicago action do not create a potential liability for an accident because they are based, and can only be read as being based, on the deliberate and intentional conduct of Watson that produced injuries—including a resurgence in heroin use that were neither unexpected nor unforeseen,” Justice Richard Fybel wrote in the ruling.

WATSON CONDUCT IS EXCLUDED

“All of the injuries arose out of Watson’s products or the alleged statements and misrepresentations made about those products, and therefore fall within the product exclusions clause of the policies,” Fybel added.

“The takeaway is that the opioid crisis has gone into the realm of whether there is insurance coverage to pay for some of the costs being incurred by public entities,” commented Larry Golub, a lawyer and partner with Hinshaw & Culbertson who is unattached to the case.

“I think there is a potential for more cases,” Golub told Connecticut Law Tribune. “Big bucks are being spent to deal with the opioids crisis.”

This is the second time Travelers has won a ruling against Watson. In August 2016, the US Court of Appeals for the Eleventh Circuit ruled that the insurer did not have to defend Anda, a division of Watson Pharmaceuticals in a West Virginia federal court case over the “prescription drug abuse” crisis in that state. The court based its decision on the exclusions of the company’s insurance policy.

OPINION EXCERPT IN TRAVELERS vs. ANDA-WATSON

Background: Anda is a wholesale pharmaceutical distributor. The State of West Virginia has sued Anda and other pharmaceutical companies in West Virginia state court, requesting an injunction against their distribution practices and seeking compensation for expenses the state alleges it has incurred as a result of the proliferation of “Pill Mills” and the attendant “opioid epidemic.” Further stating “The judgment of the district court is affirmed, and the liability policy coverage for Anda and Watson in the West Virginia opioid suit is denied.”

Will denial of insurance coverage become a trend in the exploding number od lawsuits filed against opioid manufactures, distributors and will Big Pharma finally be forced to admit the wholesale opioid abuse designed in the boardroom and placed into American commerce by any means necessary over the last 20+ years?

 

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