REUTERS/George Frey

State supreme court overturns broad bar against insurers suing over opioid coverage

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(Reuters) – West Virginia’s prime court has dominated a choose went too far by barring AmerisourceBergen Drug Corp’s insurers from pursuing litigation in California over the extent to which they have to cowl a $6.4 billion settlement resolving lawsuits accusing the drug distributor of fueling the U.S. opioid epidemic.

The West Virginia Supreme Court of Appeals on Monday ruled the choose, who was listening to an analogous case by AmerisourceBergen in Boone County state court over what coverage a unit of The Vacationers Cos owed it for opioid litigation prices, may bar associated litigation elsewhere.

However Justice John Hutchison, writing for the five-member court, stated the choose abused his discretion by issuing a very broad injunction that prevented litigation in California and different states involving insurance policies past the 16 at challenge within the West Virginia case or issues with different events.

St. Paul Fireplace & Marine Insurance coverage Co, a Vacationers unit, sued AmerisourceBergen in California in November 2020 after it and fellow distributors McKesson Corp and Cardinal Well being Inc disclosed that they had agreed to pay as much as $21 billion to resolve 3,000 opioid instances nationally by state and native governments.

That features $6.4 billion from AmerisourceBergen, which was already suing St. Paul in West Virginia to safe coverage for a smaller universe of 165 opioid instances there.

The court remanded the case so the injunction may very well be narrowed, opening the door to the stalled California litigation restarting.

St. Paul, represented by Thomas Scarr of Jenkins Fenstermaker and Bryce Friedman of Simpson Thacher & Bartlett, had no remark.

AmerisourceBergen, represented by Charles Piccirillo of Shaffer & Shaffer and Kim Watterson of Reed Smith, declined to remark however has beforehand denied fueling the epidemic.

AmerisourceBergen first sued St. Paul and 4 different insurers in West Virginia in 2017 searching for coverage for opioid instances by native governments and a $16 million settlement it had reached with the state’s legal professional normal. By the point St. Paul filed the California case, then-Boone County Circuit Court choose William Thompson was within the midst of contemplating whether or not AmerisourceBergen was entitled to coverage below 16 insurance policies issued by St. Paul and the opposite insurers.

In mid-November 2020, he dominated AmerisourceBergen was below a normal legal responsibility insurance coverage coverage with St. Paul.

At AmerisourceBergen’s request, he issued an injunction in January barring St. Paul and all different events from pursuing litigation in California or elsewhere, saying that would end in conflicting selections.

Thompson is now the U.S. Lawyer for the Southern District of West Virginia.

The case is St. Paul Fireplace & Marine Insurance coverage Co v. AmerisourceBergen Drug Corp, West Virginia Supreme Court of Appeals, No. 21-0036.

For St. Paul: Thomas Scarr of Jenkins Fenstermaker; and Bryce Friedman of Simpson Thacher & Bartlett

For AmerisourceBergen: Charles Piccirillo of Shaffer & Shaffer; and Kim Watterson of Reed Smith

For Ace American Insurance coverage Co: J. Zak Ritchie of Hissam Forman Donovan Ritchie

Nate Raymond

Nate Raymond reviews on the federal judiciary and litigation. He might be reached at [email protected]