St. Paul Fire & Marine Ins. Co. v. Amerisourcebergen Drug Corp.

• Citation: 868 S.E.2d 724
• Decision Date: 15 November 2021
• Docket Number: 21-0036
• Parties: ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant Below, Petitioner v. AMERISOURCEBERGEN DRUG CORPORATION, and Bellco Drug Corporation, Plaintiffs Below, Respondents v. ACE American Insurance Company and ACE Property and Casualty Insurance Company, Defendants Below, Intervenor-Petitioners
• Court: Supreme Court of West Virginia

868 S.E.2d 724

ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant Below, Petitioner

v.AMERISOURCEBERGEN DRUG CORPORATION, and Bellco Drug Corporation, Plaintiffs Below, Respondents

v.ACE American Insurance Company and ACE Property and Casualty Insurance Company, Defendants Below, Intervenor-Petitioners

No. 21-0036

Supreme Court of Appeals of West Virginia.

Submitted: September 29, 2021

Filed: November 15, 2021

Thomas E. Scarr, Esq., Lee Murray Hall, Esq., Sarah A. Walling, Esq., Jenkins Fenstermaker, PLLC, Huntington, West Virginia, Andrew T. Frankel, Esq., Pro Hac Vice.

Charles S. Piccirillo, Esq., Todd A. Mount, Esq., Shaffer & Shaffer PLLC, Madison, West Virginia, Courtney C.T. Horrigan, Esq., Pro Hac Vice.

Bryce L. Friedman, Esq., Pro Hac Vice, Matthew C. Penny, Esq., Pro Hac Vice, Simpson Thacher & Bartlett LLP, New York, New York, Counsel for the Petitioner, St. Paul Fire and Marine Insurance Company.

J. Zak Ritchie, Esq., Hissam Forman Donovan Ritchie PLLC, Charleston, West Virginia, Counsel for the Intervenor-Petitioners, Ace American Insurance Company and Ace Property and Casualty Insurance Company.

Kim M. Watterson, Esq., Pro Hac Vice, Reed Smith LLP, Pittsburgh, Pennsylvania, Counsel for the Respondents, AmerisourceBergen Drug Corporation and Bellco Drug Corporation.

HUTCHISON, Justice:

Over the last two decades, the United States has experienced an epidemic of overdose deaths involving prescription and illicit opioid medications. Governments, businesses and individuals have sued the pharmaceutical distributors that sold prescription opioid medicines and "seek to recover billions in governmental and economic costs allegedly incurred in providing a wide array of public services in response to the influx of opioids into their communities such as increased expenses for first responders, autopsies, morgues, drug rehabilitation, foster care, and drug-related criminal activity."¹ In response, the pharmaceutical distributors have filed suits against their liability insurers seeking to recover, from the insurance policies they purchased over the years, their defense expenses as well as indemnification for settlements.

In this appeal from the Circuit Court of Boone County, we consider the powers of a circuit court to manage a lawsuit by a pharmaceutical distributor against the insurance companies which provided it with liability insurance. Specifically, the circuit court entered an "anti-suit injunction" prohibiting the insurance companies sued in West Virginia from pursuing parallel litigation against the distributor in California. As set forth below, we affirm the circuit court's power to enter an order precluding a party to a West Virginia lawsuit from instituting or prosecuting collateral litigation in a sister state. However, because an anti-suit injunction must be narrowly tailored to protect the court's authority while respecting the sister state court, we reverse the circuit court's injunction order and remand the case to permit the circuit court to reconsider the breadth of its order.

I. Factual and Procedural Background

Plaintiff AmerisourceBergen Drug Corporation ("ABDC") is a wholesale distributor of prescription opioid medication in West Virginia and across the United States.² In 2012, the West Virginia Attorney General filed a lawsuit seeking to hold ABDC liable for the prescription opioid epidemic in West Virginia. After the Attorney General reached settlements in the suit in late 2016, a host of state agencies, counties, cities, hospitals, individuals, and others named ABDC as a defendant in as many as 165 similar prescription opioid lawsuits in West Virginia courts. See generally , State ex rel. AmerisourceBergen Drug Corp. v. Moats , 245 W.Va. 431, 859 S.E.2d 374, 378 (2021) (discussing the more than eighty opioid lawsuits pending before the West Virginia Mass Litigation Panel). Nationwide, thousands of comparable lawsuits are pending in state and federal courts.

The instant case derives from ABDC's efforts to establish that these prescription opioid lawsuits, nationwide and in West Virginia, are covered under primary, umbrella, and excess commercial general liability policies purchased by ABDC (or its predecessors or affiliates). On March 17, 2017, ABDC filed a complaint in the Circuit Court of Boone County, West Virginia, against five insurance companies seeking to establish coverage under sixteen policies issued between 2006 and 2013.³ ABDC subsequently amended its complaint to refine its claims. The complaints generally alleged that the West Virginia opioid lawsuits raised claims within the scope of policy coverage but that the insurance companies had breached the sixteen insurance contracts when they refused to provide defense costs or liability coverage to ABDC.⁴

ABDC's insurance coverage lawsuit specifically sought a declaratory judgment from the circuit court construing primary, umbrella and excess comprehensive general liability policies issued by defendant St. Paul Fire & Marine Insurance Company ("St. Paul") and by defendants Ace American Insurance Company and Ace Property and Casualty Insurance Company ("Ace American").⁵ ABDC requested an order requiring the defendants "to pay for the past, present and future defense costs and liability in connection with prescription opioid lawsuits filed against [ABDC] in this state[.]"

Over the next three-and-a-half years, ABDC and the insurer-defendants participated in extensive discovery. At one point, ABDC produced over ten million pages of documents in response to requests made by the insurer-defendants (because the defendants had sought all documents ever produced by ABDC in all federal and state prescription opioid lawsuits nationwide). After the resolution of numerous discovery disputes by the circuit court, defendant St. Paul filed a motion for summary judgment contending that, as a matter of law, the West Virginia opioid lawsuits did not properly allege damages arising from a "bodily injury" covered by a St. Paul policy. The parties briefed the motion. In early 2020, the circuit court heard argument on St. Paul's summary judgment motion but requested further briefing. Moreover, in an order dated September 28, 2020, the circuit court resolved the last outstanding discovery dispute between the parties.

Then, on November 5, 2020, St. Paul filed a competing insurance coverage action in California state court against ABDC and its corporate subsidiaries and affiliates.⁶ In the California complaint, St. Paul alleged that ABDC has been "named in more than 80 lawsuits originally filed in California state and federal court and hundreds more in other states seeking to hold them responsible for contributing to the opioid crisis in the United States (the ‘Opioid Lawsuits’)." (Emphasis added.) St. Paul noted that while several opioid lawsuits nationwide had settled, even after those settlements are concluded,

there will be hundreds of pending Opioid Lawsuits brought by individuals, companies or governmental entities seeking to hold [ABDC and its affiliates] liable for their role in the opioid crisis, and for which [ABDC and its affiliates] have sought insurance coverage from the St. Paul Insurers ... among others (‘Remaining Suits’).

St. Paul's California complaint alleged that St. Paul issued various insurance policies to ABDC, but sought a declaratory judgment that St. Paul had no duty to defend or indemnify ABDC in any opioid lawsuit filed against ABDC nationwide. Alternatively, St. Paul's complaint named as defendants seventy insurance companies (including companies such as ACE American) "who, on information and belief, issued insurance policies to [ABDC] Affiliates covering periods between 1995 and 2018[.]" The complaint asked the California court to issue a declaratory judgment that, if St. Paul had some obligation to provide coverage for any opioid lawsuit, established the scope and amount of coverage required to be provided by each insurance company to ABDC.

On November 19, 2020, ABDC filed a motion with the West Virginia circuit court seeking an "anti-suit injunction." At the beginning of its motion, ABDC sought injunctive relief solely against St. Paul, asking the circuit court to enjoin St. Paul "from pursuing collateral declaratory judgment litigation in California or elsewhere against ABDC regarding the disputes currently pending" before the West Virginia court. However, ABDC's final request for relief was substantially broader. At the end of its motion, ABDC asked the circuit court to "enjoin St. Paul, and all other parties to this lawsuit " from proceeding with the California lawsuit or from "instituting any further collateral lawsuits regarding the issues pending" before the circuit court. (Emphasis added.)

St. Paul contended that no injunction was necessary because the California complaint exempted the West Virginia lawsuit. St. Paul cited to footnote 11 on page 17 of its California complaint which reads:

In 2017, [ABDC] settled an opioid-related lawsuit brought against it by the Attorney General of West Virginia. Coverage for that settlement and cases brought by certain West Virginia governmental entities against [ABDC] and its affiliates is the subject of litigation pending in West Virginia, styled AmerisourceBergen Drug Corp., et al. v. ACE American Insurance Co., et al. , No. 17-C-36 (W. V. Cir. Ct., Boone Cty.), and is not intended to be the subject of this action.

In response to St. Paul's footnote, ABDC argued that the broad language of the California complaint necessarily subsumed and addressed the coverage questions pending in West Virginia. Further, ABDC argued that the California footnote did not say St. Paul carved out the West Virginia cases, rather, it said St. Paul "intended to" carve them out of the California action.

In the interim, the circuit court made progress toward resolving the West Virginia insurance coverage lawsuit. On November 23, 2020, after months of supplemental briefing, the circuit court entered an order...