658 F. App'x 955
11th Cir.2016Background
- Anda, a national wholesale pharmaceutical distributor, was sued by the State of West Virginia seeking injunctive relief and monetary damages for costs allegedly caused by over-distribution of opioid medications and the resulting ‘‘Pill Mill’’/opioid epidemic.
- Anda held commercial general liability (CGL) policies issued by Travelers and St. Paul for various policy periods between 2006–2013; policies obligated insurers to defend/indemnify claims for ‘‘bodily injury’’ but contained broad products/completed-operations exclusions.
- Insurers filed this declaratory-judgment action seeking a ruling that they owe no duty to defend or indemnify Anda in the West Virginia Action; Federal and Gemini settled and are no longer at issue.
- The district court granted summary judgment for Travelers and St. Paul, reasoning the underlying complaint alleged economic injuries to the State rather than ‘‘bodily injury,’’ and thus did not trigger coverage; Anda’s motion for reconsideration was denied.
- The Eleventh Circuit affirmed on the alternate ground that the insurers’ products exclusions bar coverage because the State’s alleged injuries have the requisite causal connection to Anda’s distributed products under California law governing those policies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Travelers/St. Paul owe a duty to defend/indemnify Anda for the West Virginia Action | Anda: the State’s claims include or are ‘‘because of’’ bodily injury (thus triggering coverage); insurers must defend | Insurers: the policies require ‘‘bodily injury’’ and the State’s complaint alleges economic/municipal costs, not covered bodily injury; alternatively, products exclusions bar coverage | Court: Did not decide the bodily-injury question; held coverage is barred by the policies’ products/completed-operations exclusions because the State’s injuries have a sufficient causal connection to Anda’s products |
| Whether the products/completed-operations exclusions apply | Anda: exclusions do not encompass the State’s claims (e.g., indirect economic injuries, public-cost claims) | Insurers: ‘‘arising out of’’ / ‘‘results from’’ language is broad and excludes claims connected to insured products | Court: Exclusions apply—California law requires only a minimal causal link; underlying claims ‘‘arise out of’’ or ‘‘result from’’ Anda’s distributed products |
Key Cases Cited
- Pension Trust Fund v. Fed. Ins. Co., 307 F.3d 944 (9th Cir.) (interpreting "arising out of" as requiring a minimal causal connection)
- Continental Cas. Co. v. City of Richmond, 763 F.2d 1076 (9th Cir.) (same on causation language)
- Taurus Holdings, Inc. v. U.S. Fidelity & Guar. Co., 431 F.3d 765 (11th Cir.) (products-completed-operations exclusion bars municipal claims tied to product use)
- Taurus Holdings, Inc. v. U.S. Fidelity & Guar. Co., 913 So.2d 528 (Fla.) (Florida Supreme Court adopting broad meaning of "arising out of" in the municipal-costs context)