WILMINGTON, Del. (Legal Newsline) – Excess insurance will pick up the tab for some of the litigation against Pfizer regarding its anti-inflammatory drug Celebrex.
Judge Paul Wallace of the Delaware Superior Court ruled that way on Sept. 1, ordering U.S. Specialty Insurance Company to live up to the terms of Pfizer’s policy. In question was whether the insurer would pay for shareholder litigation that followed lawsuits alleging side effects from Celebrex and Bextra use.
Pfizer paid billions in settlements and fines, then paid $486 million to a class of investors who suffered when the company’s stock took a major hit while a class period for drug users was pending.
The shareholder litigation wasn’t subject to an exclusion clause, Judge Paul Wallace wrote.
“Simply put, Delaware recognizes no business reason for an excess insurer to care whether the payment in satisfaction of a policy below was for the policy’s full dollar value, so long as the protections afforded by all underlying insurance policies are extinguished and the excess insurer’s liability begins only at its own attachment point,” Wallace wrote.
“An excess carrier cannot avoid coverage under an exhaustion clause due to a settlement below unless that settlement works some additional exposure or prejudice on the excess carrier above the attachment point.”