St. Paul Fire & Marine Ins. Co. v. AmerisourceBergen Drug Corp., 21-0036

Citation21-0036
Case DateNovember 15, 2021
CourtSupreme Court of Virginia

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

November 15, 2021


Submitted: September 29, 2021

Appeal from the Circuit Court of Boone County The Honorable William S. Thompson, Judge Civil Action No. CC-03-2017-C-36

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

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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

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

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

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SYLLABUS BY THE COURT

1. "West Virginia Constitution, article VIII, section 3, which grants this Court appellate jurisdiction of civil cases in equity, includes a grant of jurisdiction to hear appeals from interlocutory orders by circuit courts relating to preliminary and temporary injunctive relief." Syl. pt. 2, State ex rel. McGraw v. Telecheck Servs., Inc., 213 W.Va. 438, 582 S.E.2d 885 (2003).

2. "The granting or refusal of an injunction, whether mandatory or preventive, calls for the exercise of sound judicial discretion in view of all the circumstances of the particular case; regard being had to the nature of the controversy, the object for which the injunction is being sought, and the comparative hardship or convenience to the respective parties involved in the award or denial of the writ." Syl. pt. 4, State v. Baker, 112 W.Va. 263, 164 S.E. 154 (1932).

3. "In reviewing the exceptions to the findings of fact and conclusions of law supporting the granting of a temporary or preliminary injunction, we will apply a three-pronged deferential standard of review. We review the final order granting the temporary injunction and the ultimate disposition under an abuse of discretion standard, West v. National Mines Corp., 168 W.Va. 578, 590, 285 S.E.2d 670, 678 (1981), we review the circuit court's underlying factual findings under a clearly erroneous standard, and we review questions of law de novo. Syllabus Point 4, Burgess v. Porterfield, 196 W.Va. 178,

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469 S.E.2d 114 (1996)." Syl. pt. 1, State By & Through McGraw v. Imperial Mktg., 196 W.Va. 346, 472 S.E.2d 792 (1996).

4. "When the jurisdiction of a court is asserted over a cause of action, it embraces everything in the case and every question arising which can be determined in it; and, until thus exhausted, or in some way relinquished, the jurisdiction is exclusive and cannot be encroached upon by any other tribunal." Syl. pt. 1, State v. Fredlock, 52 W.Va. 232, 43 S.E. 153 (1903).

5. "A court having jurisdiction in personam, may require the defendant to do, or refrain from doing, beyond its territorial jurisdiction, anything which it has power to require him to do or omit within the limits of its territory." Syl. pt. 2, State v. Fredlock, 52 W.Va. 232, 43 S.E. 153 (1903).

6. An anti-suit injunction is an order barring parties to an action in this state from instituting or prosecuting substantially similar litigation in another state. Whether the foreign state action is substantially similar involves assessing (1) the similarity of the parties; (2) the similarity of the issues; and (3) the capacity of the action in this state to dispose of the foreign state action.

7. The principle of comity requires that a circuit court enter an anti-suit injunction cautiously and with restraint.

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8. An anti-suit injunction is an exceptional remedy but is appropriate when equity compels the circuit court: (1) to address a threat to the court's jurisdiction; (2) to prevent the evasion of an important public policy; (3) to prevent a multiplicity of suits that result in delay, inconvenience, expense, inconsistency, or will be a "race to judgment"; or (4) to protect a party from vexatious, inequitable or harassing litigation.

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OPINION

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.

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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, 859 S.E.2d 374, 378 (W.Va. 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,

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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]

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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

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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...

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