In the
United States Court of Appeals
For the Seventh Circuit
No. 09-3390
M EDMARC C ASUALTY INSURANCE C OMPANY ,
Plaintiff/Counterclaim Defendant-Appellee,
v.
A VENT A MERICA, INC.,
Defendant/Counterclaim Plaintiff-Appellant.
P HILIPS E LECTRONIC N ORTH A MERICA C ORPORATION
(as successor-in-interest to Avent America, Inc.),
Third-Party Plaintiff-Appellant,
v.
S TATE F ARM F IRE AND C ASUALTY C OMPANY, and
P ENNSYLVANIA G ENERAL INSURANCE C OMPANY,
Third-Party Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08 C 5832—Harry D. Leinenweber, Judge.
2 No. 09-3390
A RGUED A PRIL 2, 2010—D ECIDED JULY 15, 2010
Before F LAUM, W OOD , and H AMILTON, Circuit Judges.
F LAUM, Circuit Judge. Avent America, Incorporated
(“Avent”) 1 appeals the district court’s declaratory judg-
ment that Medmarc Casualty, Pennsylvania General and
State Farm insurance companies (“the insurance compa-
nies”) do not have a duty to defend Avent in a series
of lawsuits involving the presence of Bisphenol-A
(“BPA”) in certain products Avent sold. The plaintiffs
in the underlying lawsuits are parents who bought these
Avent products containing BPA and then refused to use
the products once they learned of the dangers of BPA. The
case at hand hinges on whether the underlying law-
suits state claims for damages “because of bodily injury,”
and are therefore covered by the insurance policies, or
not. Avent argues that the underlying suits’ claims that
the plaintiffs will not use the products out of fear of
bodily injury sufficiently state claims for damages
“because of bodily injury.” The insurance companies
argue that the underlying suits are not covered by the
1
Philips Electronic North America Corporation is the successor-
in-interest to Avent America, Inc. Philips Electronic is the
third-party Plaintiff-Appellant in the case against State Farm
and Pennsylvania General. Avent America is the defendant
and counter-claim plaintiff-appellant in the case against
Medmarc Casualty. Throughout the opinion, we will refer
to these parties jointly as Avent.
No. 09-3390 3
policies because the claims are limited to economic dam-
ages due to the purchase of unusable products and these
damages are not “because of bodily injury.” State Farm
asserts an additional argument that it does not owe
a duty to defend because the term of its coverage
ended well before any of these claims could have arisen.
The district court agreed with the insurance companies.
For the reasons set forth below and based on the insur-
ance companies’ admission at oral argument that they
would have to re-examine and alter their position
should the underlying complaints be amended to
include allegations of actual bodily injury, we affirm
the district court’s grant of declaratory relief to the insur-
ance companies.
I. Background
A. Underlying Lawsuits
This duty to defend case centers around a series of class
action suits filed against Avent for using BPA in their
products without informing the consumers of the health
risks associated with the potential leaching of BPA. The
classes in the underlying suits consist of parents who
purchased Avent’s products for their children. While
the fifteen complaints vary in their specific allegations,
they all sketch out the same general claim: Avent manu-
factured products that contained BPA; Avent was aware
of a large body of research that showed that BPA, even
at low levels, is harmful to humans and is particularly
harmful to children; despite this knowledge, Avent
marketed their products as superior in safety to other
4 No. 09-3390
products for infants and toddlers; parents would not have
purchased Avent’s products if they knew that using
products with BPA could be harmful to their children;
upon learning of the safety problems associated with
products that contain BPA, the plaintiff-parents stopped
using the products and therefore did not receive the
full benefit of their purchase.
These class actions were consolidated for pre-trial
purposes into In re: Bisphenol-A (BPA) Polycarbonate
Plastic Products Liability Litigation, MDL No. 1967, in the
Western District of Missouri. After the consolidation,
many of the underlying plaintiffs from the consolidated
class action suits filed a new class action complaint
against Avent in the Western District of Missouri. This
new action, Broadway v. Avent America, Inc., No. 08 CV 997
(W.D. Mo.) (the “Broadway Action”) is the current opera-
tive complaint, but the other class action complaints
remain relevant insofar as they might be used to send
the matters back to the transferor courts. The complaint
in the Broadway Action (the “Broadway Complaint”) is
representative of all of the underlying complaints for
the purpose of our discussion of whether the factual
allegations state a claim that triggers the insurance com-
panies’ duty to defend. Therefore, we discuss only the
Broadway Complaint in detail in this section.
The Broadway Complaint summarizes the suit in the
following manner:
This action arises out of Defendants’ misrepresenta-
tions and/or omissions and failures to warn of
and/or otherwise disclose that their Baby Products are
No. 09-3390 5
manufactured using a dangerous chemical recognized
to be toxic in several respects for years and which
poses serious risks to an individuals’ health as the
fact that it leaches into food and beverages in the
course of normal, everyday use.
(Broadway Complaint, ¶ 1.) The complaint defines the
purported class of plaintiffs to be “all persons who pur-
chased polycarbonate plastic baby bottles, nipples,
training or ‘sippy’ cups, and other products manu-
factured, sold and/or distributed by Defendants that
contained Bisphenol-A.” (Broadway Complaint, ¶ 97.) The
complaint dedicates thirteen pages to the health risks
caused by exposure to BPA. (Broadway Complaint, ¶ 40-
76.) These pages cite to numerous scientific studies
that show that BPA exposure causes various problems,
including early sexual maturation in females, increased
obesity, and increased neuron-behavioral problems such
as ADD/HD and autism, in a variety of lab animals. The
complaint alleges that the general prevailing consensus
from these studies has been that there should be con-
cern about exposure to BPA for humans. However, at
no point in those thirteen pages, or anywhere in any of
the underlying complaints, do the plaintiffs allege that
any of these negative health effects have manifested in
their children. Notably, the plaintiffs never allege that
they or their children ever used the products or were
actually exposed to the BPA. Instead, the plaintiffs allege
a uniform injury across all plaintiffs that stems from
their purchasing an unusable product. (Broadway Com-
plaint, ¶ 101) (“In every related case, Plaintiffs and Class
members suffered uniform damages caused by their pur-
6 No. 09-3390
chase of Baby Products produced, manufactured, distrib-
uted, and/or sold by Defendants.”) The counts alleged
against Avent include: Violation of Illinois Consumer
Fraud Act, Violation of Connecticut Unfair Trade Practices
Act, Violation of State Consumer Protection Laws, Breach
of Express Warranty, Breach of Implied Warranty of
Merchantability and Fitness for a Particular Purpose,
Intentional Misrepresentation, Negligent Misrepresenta-
tion, and Unjust Enrichment. Plaintiffs’ prayer for relief
includes damages in the form of: the amount of monies
paid for Defendant’s offending Baby Products and/or
other consequential or incidental damages; actual
damages, statutory damages, punitive or treble damages,
and other relief as provided by the statutes cited in the
complaint; injunctive relief barring Defendants from
continuing their use of BPA in their Baby Products in
the manner described in the complaint; and all other
relief to which Plaintiffs and members of the Class may
be entitled at law or in equity. The prayer for relief also
asked for attorneys’ fees and class certification.
After the initial pleadings stage in the consolidated
actions and in the Broadway Action, Avent filed a
motion to dismiss the complaints on the ground that they
did not state a legally cognizable injury. Avent argued
that because the plaintiffs’ prayers for relief “contain no
allegations of physical illness, cost of future medical
monitoring, fear of future injury, or emotional distress,”
this was essentially a “no-injury product liability” action
and should be dismissed. (Omnibus Introduction to
Defendants’ Motion to Dismiss, p. 9, In re BPA.) When
responding to this motion, plaintiffs conceded that they
No. 09-3390 7
did not seek damages for any physical harm but rather
sought only economic damages. Plaintiffs stated:
Defendants’ contention that Plaintiffs’ claim must
be dismissed because Plaintiffs have failed to plead a
legally cognizable injury mischaracterizes Plaintiffs’
claims and ignores Plaintiffs’ well-pled allegations
regarding the economic injuries they sustained as a
result of purchasing Defendants’ BPA-tainted goods.
Defendants correctly note that Plaintiffs do not seek
to recover for personal injuries or property damage.
However, as Defendants concede, Plaintiffs do seek
to recover for their economic losses. Courts routinely
recognize a plaintiff’s right to recover for economic
loss where the plaintiff alleges he has purchased
goods that do not perform satisfactorily or are worth
less than represented. Plaintiffs have clearly alleged
such injuries.
(Plaintiffs’ Suggestions in Opposition to Defendants’ Joint
Motion to Dismiss All Claims of All Named Plaintiffs
for Failure to Plead a Legally Cognizable Injury and Lack
of Standing Pursuant to Fed. R. Civ. P. 12(b)(1) and
12(b)(6), p. 2, In re BPA.) In response to Avent’s motion,
the district court dismissed some of the claims and let
others go forward. In addressing the argument that this
is a “no-injury product liability” case, the district court
found that to be a mischaracterization of the complaint.
It found that the essence of the claim was “not that some-
one was injured, but that consumers were not told of
BPA’s presence and the corresponding health risk.” (Order
and Opinion Addressing Certain of Defendants’ Motion
to Dismiss, p. 18, In Re BPA.) The district court reasoned:
8 No. 09-3390
The claims of Plaintiffs in this category do not depend
on proving the products are defective. It is true that,
in a general sense, Plaintiffs’ claims revolve around
“safety” in that the allegedly material facts that were
concealed relate to that issue. However, Plaintiffs’
claims are not predicated on proving the elements of
any jurisdiction’s product liability laws. . . . [T]he
Plaintiffs in this category purchased a product they
allege they would not have purchased had they
known the true facts. Now that they know the true
facts, they are unwilling to risk allowing their
children to use the product. They cannot obtain the
intended benefit from the goods, so they incurred
damages.
(Order and Opinion Addressing Certain Defendants’
Motions to Dismiss, p. 18, In re BPA.) Based on this rea-
soning, the district court dismissed all of the counts of the
complaints, except for the unjust enrichment claim, with
regard to any plaintiffs who disposed of or used their
products before learning about the BPA because those
plaintiffs were unaffected by the defendants’ alleged
concealment. The district court left the unjust enrich-
ment claim intact for all plaintiffs because the measure
of unjust enrichment damages is the benefit conferred to
the defendant, not the harm to the plaintiff.
B. The Insurance Policies
The insurance companies provided Avent with Gen-
eral Commercial Liability Insurance at various times
between 1997 and 2007. State Farm provided coverage
No. 09-3390 9
from April 11, 1994 through April 11, 1996. Pennsylvania
General provided insurance from April 11, 1997 through
April 11, 2001, under new policy contracts each year.
Medmarc provided insurance to Avent from April 11,
2001 through April 11, 2003, and again from April 11, 2006
through April 11, 2007, under new policy contracts each
year. All parties agree that the relevant language is sub-
stantially the same in all of the insurance policies.
The relevant portion of the insurance agreement, as
taken from the Medmarc policy, states:
a. We will pay those sums that the insured becomes
legally obligated to pay as damages because of “bodily
injury” or “property damage” included within the
“products-completed operations hazard” to which
this insurance applies. We will have the right and
duty to defend the insured against any “suit” seeking
those damages. However, we will have no duty to
defend the insured against any “suit” seeking damages
for “bodily injury” or “property damage” to which
this insurance does not apply. We may, at our dis-
cretion, investigate any “occurrence” and settle any
claim or “suit” that may result.
b. This insurance applies to “bodily injury” and
“property damage” only if:
(1) The “bodily injury” or “property damage” is
caused by an “occurrence” that takes place in the
“coverage territory”; and
(2) The “bodily injury” or “property damage”
occurs during the policy period.
10 No. 09-3390
The agreements define “bodily injury” as “bodily injury,
sickness or disease sustained by a person, including
death resulting from any of these at any time.”
C. Procedural Background of the Duty to Defend Case
Avent tendered the In re BPA and Broadway lawsuits
to Medmarc, Pennsylvania General, and State Farm
seeking defense and indemnification for the underlying
actions. Medmarc and Pennsylvania General denied
coverage. State Farm and Avent entered into a standstill
agreement to defer the coverage dispute. However,
Avent terminated that agreement and both parties filed
declaratory judgment on that issue. Medmarc also filed
a complaint against Avent in October 2008 seeking a
declaration that it had no duty to defend Avent in
these BPA class action suits. Avent answered the com-
plaint and counterclaimed seeking coverage. Avent then
filed a third-party complaint against Pennsylvania Gen-
eral and State Farm seeking a declaratory judgment
that they also had a duty to defend and indemnify. Al-
though the State Farm case was initially a separate case, it
was consolidated into the Medmarc Action. All three
insurance companies eventually moved for either a judg-
ment on the pleadings or summary judgment on the
grounds that this was not an “occurrence” for which they
provided coverage and that there were no allegations of
“bodily injury.” State Farm additionally claimed that any
occurrence to which coverage might apply happened
outside of its coverage period. Avent filed for summary
judgment in opposition to the insurers’ various motions.
No. 09-3390 11
The district court granted the insurance companies’
motions, basing its ruling on the lack of allegations
of bodily injury. Avent appeals.
II. Discussion
This is an appeal from a grant of summary judgment
in favor of State Farm and a grant of a motion on the
pleadings in favor of Medmarc and Pennsylvania Gen-
eral. We review grants of summary judgment and motions
on the pleadings de novo. See Bannon v. Univ. of Chi., 503
F.3d 623, 627-28 (7th Cir. 2008). In assessing whether the
district court correctly granted declaratory relief to the
insurance companies we must begin our analysis with a
review of the general standard for duty to defend under
Illinois law.2 An insurer must provide its insured with a
defense when “the allegations in the complaint are even
potentially within the scope of the policy’s coverage.” Nat’l
Cas. Co. v. Forge Indus. Staffing Inc., 567 F.3d 871, 874 (7th
Cir. 2009) (citing Guillen v. Potomac Ins. Co. of Ill., 785
N.E.2d 1, 7 (Ill. 2003)). “If the underlying complaints allege
facts within or potentially within policy coverage, the
insurer is obligated to defend its insured even if the
allegations are groundless, false, or fraudulent.” Northbrook
Prop. & Cas. Co. v. Transp. Joint Agreement, 741 N.E.2d 253,
254 (Ill. 2000). When considering whether an insurance
company has a duty to defend, the court “should not
simply look to the particular legal theories pursued by the
2
All parties agree that this dispute is governed by Illinois law.
12 No. 09-3390
claimant, but must focus on the allegedly tortious conduct
on which the lawsuit is based.” Hurst-Rosche Eng’rs, Inc. v.
Commercial Unions Ins. Co., 51 F.3d 1336, 1342 (7th Cir.
1995). This is because the Illinois courts have held that the
duty to defend “should not hinge on the draftsmanship
skills or whims of the plaintiff in the underlying action.”
Int’l Ins. Co. v. Rollprint Packaging Prods., Inc., 728 N.E.2d
680, 688 (Ill. App. Ct. 2000). Although we focus on factual
allegations above legal theories, “factual allegations are
only important insofar as they point to a theory of recov-
ery.” Health Care Indus. Liab. Ins. Program v. Momence
Meadows Nursing Center, 566 F.3d 689, 696 (7th Cir. 2009).
Therefore, based on these standards, we must consider
whether the allegations in the complaint point to a
theory of recovery that falls within the insurance
contract: Do the allegations amount to a claim for
damages “because of bodily injury” due to “an occur-
rence”?
A. Judicial Estoppel
As an initial matter, the insurance companies argue that
we should hold that Avent is judicially estopped from
making the argument that the underlying complaints
state claims because of bodily injury and therefore give
rise to a duty to defend. Judicial estoppel provides that
a party who prevails on one ground in a prior pro-
ceeding cannot turn around and deny that ground in a
subsequent one. Butler v. Roundlake Police Dep’t, 585 F.3d
1020, 1022-23 (7th Cir. 2009). As discussed in the Back-
ground section, Avent previously argued that the com-
No. 09-3390 13
plaints in the underlying suits should be dismissed
because they made no claims of physical harm and there-
fore were “no-injury product liability” claims. The
district court agreed with their position to the extent
that it held there were no claims of physical injury.
While the filings of Avent and the plaintiffs in the
underlying actions are instructive on the duty to
defend question, judicial estoppel is not appropriate in
this case because Avent’s current argument is not suffi-
ciently in tension with its position in the underlying
suits. In the underlying suit, Avent argued that the com-
plaints did not state claims for bodily injury and there-
fore did not state a cause of action. The district court in
In re BPA agreed that the complaints did not state
claims for physical harm, but it found that the com-
plaints did state viable claims for economic damages
resulting from plaintiffs purchasing a product less desir-
able than they believed they were purchasing. In the case
at bar, Avent argues that such a claim for economic
damages is sufficient to trigger a duty to defend. Avent
points to the language in the insurance polices that covers
claims for damages “because of bodily injury” and urges
the court to recognize that this phrase triggers a broader
duty to defend than insurance contracts that provide
coverage for claims of damages “for bodily injury.”
Therefore, because Avent only argued the claims were
not “for bodily injury” in the underlying suit, it does not
preclude their argument here that the underlying com-
plaints state claims for damages “because of bodily
injury.” Although appellant’s argument may appear to be
threading the judicial estoppel needle, it is meritorious.
14 No. 09-3390
We must be careful when applying judicial estoppel in
the duty to defend context. If an insurance company
refuses to defend its insured in a given case, that
insured still must put forth a zealous defense. In doing
so, the insured may have to attack the opponent’s case
in ways that seem to remove it from the scope of the
insurance contract. That does not necessarily absolve
the insurance company from providing the exact same
defense, or later reimbursing the insured for the defense.
While judicial estoppel may be appropriate in certain
duty to defend situations, we must be cognizant of this
tension when we consider applying this doctrine in
these types of cases. As such, because Avent is not as-
serting an argument that is in direct tension with an
argument previously made in another forum, judicial
estoppel is not appropriate in this context and we reach
the merits of the claim.
B. Duty to Defend
Avent argues that the factual allegations in the under-
lying complaints sketch out claims for damages due to
Avent’s creation and sale of products that cause bodily
injury. Avent focuses on the allegations that exposure to
BPA causes physical harm. Based on these factual allega-
tions, Avent characterizes the complaint as alleging:
“(1) the underlying plaintiffs purchased BPA-containing
products manufactured, sold, and/or distributed by Avent
and that BPA migrates from those products; (2) BPA
potentially causes a wide variety of adverse health prob-
lems that may not manifest for years; and (3) Avent
No. 09-3390 15
somehow violated a standard of care by manufac-
turing, selling, and/or distributing BPA-containing baby
products that allegedly cause these injuries.” Based on this
chain of allegations, Avent argues that the complaints
state claims for damages because of bodily injury and
therefore fall within the policy coverage. The insurance
companies argue that they do not owe Avent a defense
because there are no allegations in the complaint that
the products caused bodily injury. Rather, the com-
plaints allege that, due to the risk of potential bodily
harm from BPA exposure, the plaintiffs did not receive
the full benefit of their bargain (because they now
will not use the product) and therefore incurred purely
economic damages unrelated to bodily injury. We agree
with the insurance companies’ assessment of the com-
plaints.
The problem with Avent’s argument is that, even if the
underlying plaintiffs proved every factual allegation in
the underlying complaints, the plaintiffs could not
collect for bodily injury because the complaints do not
allege any bodily injury occurred. Additionally, the
complaints do not allege that the underlying plaintiffs
now have an increased risk of bodily injury for which
they should be compensated. The closest the complaints
come to alleging bodily injury is the allegations that
Avent was aware of a large body of scientific research,
extensively cited in the complaints, that BPA exposure
can cause physical harm. Proving such allegations
would not entitle the plaintiffs to recover for bodily
injury or for damages flowing from bodily injury because
these allegations lack the essential element of actual
physical harm to the plaintiffs.
16 No. 09-3390
Avent recognizes this gap in the underlying com-
plaints, but rebuts it with the argument that the plain-
tiffs left these claims out to make it easier to be certified
as a class. Avent argues that “[i]t is precisely these ‘whims’
that are not, under Illinois law, supposed to change
whether or not particular factual allegations are suf-
ficient to trigger coverage under general liability
insurance policies.” Although Illinois courts have recog-
nized that a duty to defend should not be at the mercy
of the drafting whims of plaintiffs’ attorneys, Rollprint
Packaging Prods. Inc., 728 N.E.2d at 688, these omissions
were not mere whims. In the underlying cases, the plain-
tiffs’ attorneys have limited their claims solely to
economic damages that resulted from the plaintiffs pur-
chasing a product from which they cannot receive a
full benefit because they were falsely led to believe that
it was safe. This is not a drafting whim (or mistake) on
the part of the plaintiffs’ attorneys, but rather a serious
strategic decision to pursue only this limited claim. The
strategic intention behind this decision is clear from the
plaintiffs’ concession in the underlying suit that they are
seeking only economic damages and do not claim any
bodily injury. The district court in the underlying suit
also acknowledged this strategic decision when it found
that the complaint does validly set out a claim for eco-
nomic damages but not damages for physical harm.
Although not binding on this court’s decision in this
case, it is particularly instructive that the district court
in the underlying action dismissed all claims, other than
unjust enrichment, for plaintiffs who disposed of their
Avent baby products prior to learning of the presence
No. 09-3390 17
of BPA because those individuals had already received
the full benefit of the bargain. This decision would be
illogical if the complaint stated a claim of physical harm
from the presence of BPA—if such a claim was present,
those individuals who used the baby product to its
fullest extent prior to learning of the BPA would have
the strongest claim for damages due to exposure to BPA.
Avent relies heavily on Ace Am. Ins. Co. v. RC2 Corp., 568
F. Supp. 2d 946 (N.D. Ill. 2008) 3 to support its argument
that this complaint could be construed to make claims
for damages because of bodily injury. The underlying
complaint in RC2 dealt with children exposed to lead
paint in toys. In coming to the conclusion that the
insurers in RC2 had a duty to defend, the district court
found that exposure to lead paint constituted a bodily
injury. Avent characterizes the underlying complaint in
RC2 in much the same way it characterizes the underlying
complaints in this case: plaintiffs purchased products
sold by the defendant company that are dangerous; these
dangerous products potentially cause a wide variety
3
This Court recently reversed the district court’s decision in
RC2 on the ground that the occurrence did not occur in China
and therefore fell outside the scope of the insurance contract.
Ace American Ins. Co. v. RC2 Corp., Inc., et al., 600 F.3d 763 (7th
Cir. 2010). We did not reach the issue of whether exposure
to lead paint sufficiently constituted a bodily injury to trigger
the duty. Because our decision to reverse was not based on
the issue relevant here and because the differences between
RC2 and this case are instructive to our analysis, we consider
RC2 still persuasive in its distinctions.
18 No. 09-3390
of health problems; the defendant company violated a
standard of care for selling such products. However, the
complaint in RC2 is not as similar to the complaint in
this case as Avent claims. In RC2, the underlying com-
plaint specifically alleged that the named plaintiffs and
the class members “suffered an increased risk of serious
health problems making periodic examinations rea-
sonable and necessary.” Such allegations are absent from
the complaint in this case. Avent claims that the
district court placed too much weight on this distinction,
but this distinction is exactly what the district court
should have focused on. In RC2, the complaint alleged
that the product caused bodily injury, albeit in the form
of an increased risk of future harm. In this case, there is
no claim of bodily injury in any form.
Similarly, Avent’s reliance on Travelers Insurance Co. v.
Penda Corp., 974 F.2d 823 (7th Cir. 1992), is misplaced. In
Penda, the underlying complaint alleged that the plain-
tiff could not sell a given product because the paper
they received from the defendant had yellowed. 974
F.2d at 825-26. The plaintiff sought damages for the
lost profits from not being able to complete the sale at
issue and also lost profits due to their now tarnished
reputation. Id. We found that the duty to defend did
extend to the claim for lost profits due to the lost sale
because such a loss could easily be seen as “because of” the
property damage to the paper. Id. at 829. Again, this case
is not on point. The underlying complaint in Penda
alleged actual property damage that led to a loss in profits.
There is no similar claim here of actual bodily injury.
No. 09-3390 19
Avent also argues that the district court improperly
interpreted the insurance contract as only providing
coverage “for bodily injury” rather than providing cover-
age for damages “because of bodily injury.” Avent is
correct that courts do interpret these phrases differently
and courts generally interpret the phrase “because of
bodily injury” more broadly. See Tara N. v. Economy Fire &
Casualty Ins. Co., 540 N.W.2d 26, 30 (Wisc. Ct. App.
1995). The logic of this difference in interpretation can
be illustrated by considering the following example:
an individual has automobile insurance; the insured
individual caused an accident in which another indi-
vidual became paralyzed; the paralyzed individual sues
the insured driver only for the cost of making his house
wheelchair accessible, not for his physical injuries. If the
insured driver had a policy that only covered damages “for
bodily injury” it would be reasonable to conclude that
the damages sought in the example do not fall within
the insurer’s duty. However, if the insurance contract
provides for damages “because of bodily injury” then
the insurer would have a duty to defend and indemnify
in this situation.
Even considering the broader duty to defend created
by the phrase “because of bodily injury,” the complaints
in the underlying suits do not reach the level of asserting
claims “because of bodily injury.” Implicit in Avent’s
argument is that the damages claimed are somehow, at
least tangentially, tied to a bodily injury caused by BPA.
As discussed above, that simply is not the case here. The
theory of relief in the underlying complaint is that the
plaintiffs would not have purchased the products had
20 No. 09-3390
Avent made certain information known to the con-
sumers and therefore the plaintiffs have been econom-
ically injured. The theory of the relief is not that a bodily
injury occurred and the damages sought flow from
that bodily injury.
Our recent decision in Health Care Industry Liability
Insurance Program v. Momence Meadows Nursing Center, 566
F.3d 689 (7th Cir. 2009), provides additional guidance
to explain why there is no duty to defend under the
current facts. In Momence Meadows, we addressed the
duty to defend in an underlying qui tam suit brought
under the False Claims Act and the Illinois Whistleblower
Reward Protection Act. Although the underlying suit
was in a far different procedural posture than the under-
lying suits in the case at hand, we interpreted identical
contract language as it applied to an analogous factual
situation. In Momence Meadows, the underlying com-
plaint alleged mistreatment of nursing home patients
that led to the nursing home submitting false claims to
Medicare and Medicaid. Id. at 691. The complaint laid out
numerous abuses that caused bodily injury to patients.
However, we found that the complaint did not assert
damages “because of bodily injury.” We reasoned,
The injuries to the residents as alleged by the plain-
tiffs relate back to Momence’s cost reports to the
government where it certified that it provided quality
services and care. Plaintiffs claim Momence knew
that was false. The statutory damages they seek result
from those allegedly false filings, and not from any
alleged bodily injury to the residents. Although the
No. 09-3390 21
allegations in the underlying complaint detailing the
injuries suffered by Momence residents put a human
touch on the otherwise administrative act of false
billing, they need not be proven by the plaintiffs to
prevail. Under the FCA and the IWRPA, the plain-
tiffs do not have to show that any damages resulted
from the shoddy care.
Id. at 694. While Momence Meadows is procedurally
distinct from the case at hand, the reasoning is exactly on
point. The claims that BPA can cause physical harm only
explain and support the claims of the actual harm com-
plained of: the economic loss to the purchasers of the
products due to the alleged false advertising and failure
to warn. The underlying plaintiffs do not need to
prove that any actual injury occurred, or even that BPA
conclusively causes bodily injury, to recover on their
claims.
The procedural difference between Momence Meadows
and the case at hand affects our analysis only to the extent
that the plaintiffs in Momence Meadows could not have
amended the complaint to recover for the physical harm
to the nursing home patients whereas the underlying
complaints in this case could be amended to include
allegations of damages stemming from actual bodily
injury. If the underlying plaintiffs did amend the com-
plaint to include factual allegations of bodily injury and
damages because of that injury, Avent could re-tender the
defense and the insurance companies would then be
obligated to defend the action. The insurance companies’
counsel admitted at oral argument that if an underlying
22 No. 09-3390
complaint was amended to allege actual bodily harm to
a plaintiff and Avent re-tendered the defense, the insur-
ance companies would provide a defense in that situation.
We consider this statement by the insurance companies
at oral argument a binding admission that they will
provide a defense should the underlying plaintiffs
amend the complaints in such a manner.
As a final matter, Avent points to two out-of-circuit,
unpublished cases that contradict our decision in this
case. Addressing factually analogous cases dealing with
cellphone accessories, the Fourth Circuit and the North-
ern District of California both found that the insur-
ance company in question had a duty to defend an
insured corporation even if the complaint did not specifi-
cally allege that a bodily injury occurred. See Northern
Ins. Co. Of New York v. Baltimore Bus. Commc’n, Inc., 68
Fed. Appx. 414 (4th Cir. 2003); Plantronics, Inc. v. Amer.
Home Assurance Co., 07-cv-6038, 2008 WL 4665983 (N.D.
Cal., Oct. 20, 2008). While we are aware of these cases, we
do not find their reasoning compelling. These cases lead
to a rule that would trigger the duty to defend at the
mere possibility that a complaint, which on its face falls
outside the parameters of the insurance policy, could be
amended at some future point in a manner that would
bring the complaint within the coverage limits. Such a
rule would fundamentally alter the confines of an insur-
ance company’s responsibility to its insureds. The Illinois
courts have not signaled any intention to adopt any
such rule. Therefore, in applying Illinois law, we look
only to the complaint as it stands now and not as it may
(or may not) stand in the future.
No. 09-3390 23
Because we find that the insurance companies do not
owe Avent a defense in the underlying lawsuits at this
time, we do not need to reach State Farm’s additional
argument regarding the statute of limitations and the
timing of its policies.
IV. Conclusion
For the reasons set forth above, we A FFIRM the district
court’s finding that there is no duty to defend for any of
the insurance companies.
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