WILMINGTON, Del. (Legal Newsline) - A Delaware judge has rejected an insurance company’s plea to appeal a ruling that requires it to cover Rite Aid’s costs in defending against more than 1,000 opioid lawsuits, saying that while the dollar amount was potentially large, the contract issues involved were relatively pedestrian.
In a brief decision dated Oct. 13, the Delaware Superior Court denied Chubb Ltd.'s move to make an interlocutory appeal to the state Supreme Court. The insurer wanted certification of a September decision granting summary judgment to Rite Aid on the question of whether its corporate insurance policies covered the opioid litigation.
The decision was based upon “straightforward principles regarding insurance contract interpretation,” the Superior Court ruled in denying to certify its earlier decision, and therefore there was no need to interrupt the litigation before it proceeds to final judgment.
The question of insurance coverage looms large over opioid litigation, as thousands of cities and counties as well as most states have sued the industry for tens of billions of dollars, much of which will almost certainly be paid out by insurers. Several government entities including the State of Delaware have hired attorney Richard Fields, a highly experienced insurance litigator, to represent them on a contingency-fee basis in opioid litigation.
Chubb sought higher-court review of a decision that could wind up costing the insurance industry billions if it is applied by courts in other jurisdictions. The company, whose subsidiaries include ACE American Insurance and Illinois Union Insurance, said the “stakes alone satisfy” Delaware rules governing interlocutory appeals. If Chubb won, the company argued, it could avoid large costs in other litigation as its customers dropped similar claims.
“This case is not exceptional despite the amount in controversy,” said Judge Eric M. Davis of the Superior Court, however. While a successful interlocutory appeal might settle some questions of coverage, he wrote, the litigation would still continue. One key test of whether interlocutory appeals will be allowed is whether they can answer a question that ends the litigation entirely.
The earlier decision does “handle a discrete issue of this litigation but will not necessarily terminate this litigation entirely,” he wrote. “The issue is complex but does not involve novel legal principles applied for the first time in Delaware.”
Insurers have generally argued they shouldn’t be required to cover opioid litigation expenses because the cases don’t involve “bodily injury,” since most plaintiffs are government entities pursuing theories of public nuisance and not suing on behalf of individuals. Insurers have had little success with that approach, however, with federal courts of appeals in at least two districts ruling for policyholders.