No Duty to Defend in Opioid Litigation

By Blake Orner, Grant & Grant

On April 5, 2022, California federal judge ruled in favor of insurers, including AIG and Chubb, finding that, under their policies, there was no duty to defend pharmaceutical company policyholders in opioid epidemic lawsuits. This follows a growing trend from courts in finding no coverage owed for opioid-related claims. The Delaware Supreme Court, in a similar ruling in January of this year, held that Chubb Ltd. was not obligated to pay to defend Rite Aid Corp. against thousands of opioid-related lawsuits. Much of the litigation centers on lawsuit allegations that the opioid manufacturers, distributors, and pharmacies created a "public nuisance."

According to insurers, damages resulting from public nuisance are not covered under their policies. Considering that both Delaware and California are key venues for business and insurance disputes, this could certainly have nationwide implications. Read more here regarding the recent California ruling in Law360 and here for the Delaware ruling from Bloomberg.

If you would like to submit content or write an article for the Business Law Section, please email Kara Sikorski at ksikorski@indybar.org.

Subscribe to Business Law Section news here!