ACE American Insurance Company v. Rite Aid Corporation

IN THE SUPREME COURT OF THE STATE OF DELAWARE

ACE AMERICAN INSURANCE §
COMPANY, ILLINOIS UNION §
INSURANCE COMPANY, ACE §
PROPERTY & CASUALTY §
COMPANY, and FEDERAL §
INSURANCE COMPANY § No. 339, 2020
§
Defendants Below, § Court Below: Superior Court
Appellants, § of the State of Delaware
§
v. § C.A. No. N19C-04-150
§
RITE AID CORPORATION, RITE §
AID HDQTRS. CORPORATION, §
and RITE AID OF MARYLAND, §
INC. d/b/a MID-ATLANTIC §
CUSTOMER SUPPORT CENTER, §
§
Plaintiffs Below, §
Appellees. §
§

Submitted: September 22, 2021
Decided: January 10, 2022

Before SEITZ, Chief Justice; VALIHURA, VAUGHN, TRAYNOR, and
MONTGOMERY-REEVES, Justices, constituting this Court en Banc.

Upon appeal from the Superior Court of the State of Delaware: REVERSED.

Garrett B. Moritz, Esquire, R. Garrett Rice, Esquire, ROSS ARONSTAM &
MORITZ LLP, Wilmington, Delaware, Marc S. Casarino, Esquire, WHITE &
WILLIAMS LLP, Wilmington, Delaware, Jonathan D. Hacker, Esquire (argued),
O’MELVENY & MYERS LLP, Washington, D.C., Michael S. Shuser, Esquire, and
Blair E. Kaminsky, Esquire, HOLWELL SHUSTER & GOLDBERG LLP, New
York, New York for Defendants Below, Appellants ACE American Insurance
Company, Illinois Union Insurance Company, ACE Property & Casualty Company,
and Federal Insurance Company.
Jody C. Barillare, Esquire, MORGAN, LEWIS & BOCKIUS LLP, Wilmington,
Delaware, Gerald P. Konkel, Esquire (argued), MORGAN, LEWIS & BOCKIUS
LLP, Washington, D.C., William R. Peterson, Esquire, MORGAN, LEWIS &
BOCKIUS LLP, Houston, Texas, and Christopher M. Popecki, Esquire, MORGAN,
LEWIS & BOCKIUS LLP, Los Angeles, California for Plaintiffs Below, Appellees
Rite Aid Corporation, Rite Aid Hdqtrs. Corporation, and Rite Aid of Maryland, Inc.

SEITZ, Chief Justice, for the Majority:

2
 The question before us is whether insurance policies covering lawsuits “for”

or “because of” personal injury require insurers to defend their insureds when the

plaintiffs in the underlying suits expressly disavow claims for personal injury and

seek only their own economic damages. The Superior Court decided that Rite Aid’s

insurance carriers were required to defend it against lawsuits filed by two Ohio

counties to recover opioid-epidemic-related economic damages. As the court held,

the lawsuits sought damages “for” or “because of” personal injury because there was

arguably a causal connection between the counties’ economic damages and the

injuries to their citizens from the opioid epidemic.

We reverse. Three classes of plaintiffs are within the scope of the insured’s

personal injury coverage—the person injured, those recovering on behalf of the

person injured, and people or organizations that directly cared for or treated the

person injured. To recover under the insured’s policy as a person or organization

that directly cared for or treated the injured person, the plaintiff must prove the costs

of caring for the individual’s personal injury. Here the plaintiffs, governmental

entities, sought to recover only their own economic damages, specifically

disclaiming recovery for personal injury or any specific treatment damages. Thus,

the carriers did not have a duty to defend Rite Aid under the governing insurance

policy.

3
 I.

A.

The appellants in this interlocutory appeal, ACE American Insurance

Company, Illinois Union Insurance Company, ACE Property & Casualty Insurance

Company (i/p/a ACE Property & Casualty Company), and Federal Insurance

Company, are part of a group of defendants in a Superior Court insurance coverage

action. Because Chubb Limited is handling the defense, we will refer to the

appellants as “Chubb.” 1 The appellees, Rite Aid Corporation, Rite Aid Hdqtrs.

Corp., and Rite Aid of Maryland, Inc., will be referred to as “Rite Aid.” Rite Aid is

a national drugstore company with about 2,500 stores around the country. Chubb

wrote general liability insurance for Rite Aid during the time relevant to this appeal.

Rite Aid and others are defendants in multi-district litigation before the United

States District Court for the Northern District of Ohio (the “MDL Opioid

Lawsuits”).2 Plaintiffs have filed over a thousand suits in the MDL Opioid Lawsuits

against companies in the pharmaceutical supply chain for their roles in the national

opioid crisis. Certain suits are bellwether suits—including the complaints of Summit

1
Rite Aid Corp. v. ACE Am. Ins. Co., 2020 WL 5640817, at *2 n.4 (Del. Super. Ct. Sept. 22,
2020).
2
Id. at *2.

4
and Cuyahoga Counties in Ohio (“the Counties”) which are at issue here. The

Counties’ cases are called the “Track One Lawsuits.”3 Those lawsuits:

take[] aim at the two primary causes of the opioid crisis: (a) a marketing
scheme [by certain defendants] . . . ; and (b) a supply chain scheme,
pursuant to which the various entities in the supply chain failed to
design and operate systems to identify suspicious orders of prescription
opioids, maintain effective controls against diversion, and halt
suspicious orders when they were identified, thereby contributing to the
oversupply of such drugs and fueling an illegal secondary market. 4

B.

The insurance policy at issue in this appeal is ACE Policy XSL G27390900,

which we will refer to as the 2015 Policy.5 The 2015 Policy provides the following

coverage for personal injuries:

a. We will pay those sums that the insured becomes legally obligated
to pay as damages because of “personal injury” or “property damage”

3
Id. (citing County of Summit, Ohio v. Purdue Pharma L.P., Case No. 18-OP-45090 (N.D. Ohio)
(the “Summit” lawsuit), County of Cuyahoga, Ohio v. Purdue Pharma L.P., Case No. 17-OP-
45004 (N.D. Ohio) (the “Cuyahoga” lawsuit), and City of Cleveland, Ohio v. Purdue Pharma L.P.,
Case No. 18-op-45132 (N.D. Ohio) (the “Cleveland” lawsuit)). The plaintiffs in the Track One
Lawsuits amended their complaints three times and filed Amendments by Interlineation in late
2019, which were “substantively identical” but alleged new details regarding the pharmacies’
“distributing and dispensing” conduct. Id. at *4. While the MDL District Court granted
permission to amend the complaints, the Sixth Circuit reversed the decision in April 2020. Id. at
*5. The MDL District Court then created a new litigation track for “(1) only public nuisance
claims (2) against only the pharmacy defendants (3) in their roles as distributors and dispensers.”
Id. The Superior Court decided that the Third Amended Complaints (“TACs”), the operative
complaints as of the date Rite Aid filed its motion (July 19, 2019), were the operative complaints
for the purposes of this case. Id. That ruling has not been challenged on appeal. Summit’s TAC
is at App. to Opening Br. at A133–476 and Cuyahoga’s TAC is at App. to Opening Br. at A478–
878.
4
App. to Opening Br. at A147; id. at A294.
5
Chubb claimed that other policies in the litigation contain the same or similar coverage language
for personal injury and that none of them cover the Track One Lawsuits. Rite Aid, 2020 WL
5640817, at *3. Because the Superior Court limited its decision to the 2015 Policy, we will follow
its lead.

5
 to which the 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 “personal injury” or “property damage” to which this
insurance does not apply.
...
e. Damages because of “personal injury” include damages claimed by
any person or organization for care, loss of services or death resulting
at any time from the “personal injury.”6
The 2015 Policy “applies” to “personal injury” which “is caused by an

‘occurrence’ that takes place in the ‘coverage territory;’ and . . . occurs during the

policy period.”7 “Personal injury” is defined in part as “bodily injury” and includes

“any continuation, change, or resumption of that ‘personal injury’ . . . after the end

of the policy period.” 8 “Bodily injury” has its own definition: “bodily injury,

sickness or disease sustained by a person, including death resulting from any of these

at any time.”9 And an occurrence, with respect to bodily injury, is “an accident,

including continuous or repeated exposure to substantially the same general harmful

conditions.”10 Finally, the 2015 Policy provides that Chubb has a “duty to defend

the insured against any ‘suit’ seeking [personal injury] damages.”11

6
App. to Opening Br. at A1014–28 (hereinafter, the “2015 Policy”), § I(A)(1).
7
Id. at § I(A)(1)(b)(1)–(2).
8
Id. at §§ III(14); I(A)(1)(c).
9
Id. at § III(3). We use personal injury and bodily injury interchangeably, as do the parties.
10
Id. at § III(12).
11
Id. at § I(A)(1).

6
 C.

After Chubb denied coverage, Rite Aid sued the carriers in the Superior Court,

claiming breach of contract (Count I), and seeking a declaratory judgment on the

duty to pay or reimburse defense costs (Count II) and statutory remedies for Chubb’s

refusal to defend without good cause under Pennsylvania law (Count III). Rite Aid

moved for partial summary judgment on Count II, seeking a declaration that Chubb

is obligated to “pay or reimburse” Rite Aid’s defense costs for the Track One

Lawsuits and “all similarly pled lawsuits[,]” which would likely encompass most of

the MDL Opioid Lawsuits.12 Chubb moved for partial summary judgment on the

grounds that it had no obligation to defend Rite Aid in the lawsuits.13

On September 22, 2020, the Superior Court granted summary judgment to

Rite Aid on Count II of its amended complaint. It found that Chubb had a duty to

defend Rite Aid in the MDL Opioid Lawsuits. Relevant to this appeal, the court

held that “some of the economic losses sought by the governmental entities are

arguably because of bodily injury[,]” because the economic costs were related to

injuries to individuals. 14 The court also focused on the 2015 Policy provision

providing coverage for “[d]amages because of ‘personal injury[,]’” which

“include[s] damages claimed by any person or organization for care, loss of services

12
Rite Aid, 2020 WL 5640817, at *1; Answering Br. at 7.
13
Rite Aid, 2020 WL 5640817, at *2.
14
Id. at *16.

7
or death resulting at any time from the ‘personal injury.’”15 This language, the court

found, covered the economic loss claims in the Track One Lawsuits, which were at

least in part grounded in medical care for the personal injuries suffered by the

Counties’ residents.

We accepted Chubb’s application for certification of an interlocutory appeal

to review the insurance coverage issues.

II.

Although Chubb raises several arguments on appeal, we focus on whether the

policy provision covering “personal injury” applies to the claims in the Track One

Lawsuits. Chubb acknowledges that an insurer has a duty to defend the insured

when a complaint seeks damages for injuries that arguably are covered by the policy.

And Chubb agrees that the 2015 Policy covers suits seeking damages “for” or

“because of” personal injury. But as Chubb argues on appeal, coverage depends on

whether the bodily injury was suffered by the plaintiff, or someone asserting bodily

injury liability derivatively for the harmed party. Chubb claims the Counties did not

suffer personal injury and thus seek compensation only for their non-derivative

economic harms, even if those harms have some causal connection to a bodily injury.

While the 2015 Policy covers damages for “care” related to “the personal injury,”

15
The 2015 Policy, § I(A)(1); Rite Aid, 2020 WL 5640817, at *15–16.

8
Chubb argues that care damages still require a showing of a personal injury suffered

by an individual.

Rite Aid responds that the 2015 Policy does not exclude non-derivative

economic damages related to bodily injury. If the damages sought are causally

related to a covered “occurrence,” it argues, the duty to defend is triggered. It also

contends that the 2015 Policy covers damages suffered by an organization providing

care resulting from a covered bodily injury, which should include government

entities who provide medical care. Because the Track One Lawsuits allege costs for

care resulting from their citizens’ opioid injuries, Rite Aid contends the complaints

trigger a duty to defend.

This Court reviews de novo the trial court’s ruling on a motion for summary

judgment.16 The Court must determine “‘whether the record shows that there is no

genuine, material issue of fact and the moving party is entitled to judgment as a

matter of law.’” 17 “We also review the Superior Court’s interpretation of an

insurance contract de novo.”18

16
Williams v. Geier, 671 A.2d 1368, 1375 (Del. 1996).
17
Id. (quoting Arnold v. Society for Sav. Bancorp, 650 A.2d 1270, 1276 (Del. 1994)) (internal
quotation marks omitted).
18
ConAgra Foods, Inc. v. Lexington Ins. Co., 21 A.3d 62, 68 (Del. 2011) (citing Stonewall Ins.
Co. v. E.I. du Pont de Nemours & Co., 996 A.2d 1254, 1256 (Del. 2010)).

9
 A.

The parties agree that Pennsylvania law controls if there is a conflict with

Delaware law.19 The Superior Court found that the state laws “do not conflict [and

are not] materially different with respect to the Motions’ relevant issues.” 20 We

agree that a choice of law analysis is unnecessary because Pennsylvania and

Delaware law do not conflict on the insurance coverage issues presented here.21

“In construing the language of [an insurance policy,] the Court should

interpret the language in the same manner as it would be understood by an objective,

reasonable third party.”22 “[A] court should first seek to determine the parties’ intent

from the language of the insurance contract itself”23—the “mutual intent at the time

19
Opening Br. at 10; Answering Br. at 9.
20
Rite Aid, 2020 WL 5640817, at *12.
21
IDT Corp. v. U.S. Specialty Ins. Co., 2019 WL 413692, at *6 (Del. Super. Ct. Jan. 31, 2019)
(“Delaware courts recognize that, where possible, a court should avoid a choice-of-law analysis
altogether if the result would be the same under the law of either of the competing jurisdictions.”
(citations omitted)); Valley Forge Ins. Co. v. Nat’l Union Fire Ins. Co., 2012 WL 1432524, at *6–
9 (Del. Super. Mar. 16, 2012) (applying Delaware law to determine number of occurrences because
Delaware applies “substantially the same ‘cause’ test” as Pennsylvania and Massachusetts); Smith
v. Liberty Mut. Ins. Co., 201 A.3d 555, 561 (Del. Super. Ct. 2019) (reciting Delaware’s “potential”
for coverage standard for duty to defend); Nationwide Mut. Ins. Co. v. Garzone, No. CIV.A. 07-
4767, 2009 WL 2996468, at *10 (E.D. Pa. Sept. 17, 2009) (same under Pennsylvania law).
22
IDT Corp., 2019 WL 413692, at *7 (quotation marks omitted); Osborn ex rel. Osborn v. Kemp,
991 A.2d 1153, 1159 (Del. 2010) (“Delaware adheres to the ‘objective’ theory of contracts, i.e. a
contract’s construction should be that which would be understood by an objective, reasonable third
party.” (quoting NBC Universal v. Paxson Commc’ns, 2005 WL 1038997, at *5 (Del. Ch. Apr. 29,
2005))); Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. Ct. 2006) (“Under contract law, the
objective manifestation of the parties is the governing factor regardless of subjective beliefs and
reservations. An ‘actual’ meeting of the minds is not necessary to form a contract.” (citing Long
v. Brown, 582 A.2d 359, 363 (Pa. Super. Ct. 1990))).
23
Alstrin v. St. Paul Mercury Ins. Co., 179 F. Supp. 2d 376, 388 (D. Del. 2002); see also Emmons
v. Hartford Underwriters Ins. Co., 697 A.2d 742, 745 (Del. 1997) (“The scope of an insurance

10
of contracting.”24 Absent ambiguity, contract terms should be accorded their plain,

ordinary meaning.25

Under Pennsylvania law, when there is a coverage dispute, “[t]he language of

the policy and the allegations of the complaint must be construed together to

determine the insurers’ obligation.” 26 “[I]t is the claim which determines the

insurer’s duty to defend; and it is irrelevant that the insurer may get [information]

from the insured, or from any one else, which indicates, or even demonstrates, that

the injury is not in fact ‘covered.’”27

The duty to defend is broad. An “insurer has an obligation to defend its

insured, even if the action against the insured is groundless, whenever the

complaint . . . may potentially come within the coverage of the policy.” 28 This

policy’s coverage . . . is prescribed by the language of the policy.” (citing Rhone-Poulenc Basic
Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1195–96 (Del. 1992))).
24
Goggin v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2018 WL 6266195, at *4 (Del. Super. Ct.
Nov. 30, 2018).
25
Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012); see also Goggin, 2018
WL 6266195, at *4; IDT Corp., 2019 WL 413692, at *7; Donegal Mut. Ins. Co. v. Baumhammers,
938 A.2d 286, 290 (Pa. 2007) (“‘When the language of the policy is clear and unambiguous, we
must give effect to that language.’ However, ‘when a provision in the policy is ambiguous, the
policy is to be construed in favor of the insured to further the contracts [sic] prime purpose of
indemnification and against the insurer, as the insurer drafts the policy and controls coverage.’”
(quoting Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d
888, 897 (Pa. 2006))).
26
Baumhammers, 938 A.2d at 290; see also Am. and Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc.,
2 A.3d 526, 541 (Pa. 2010) (“The question of whether a claim against an insured is potentially
covered is answered by comparing the four corners of the insurance contract to the four corners of
the complaint.”).
27
Lee v. Aetna Cas. & Sur. Co., 178 F.2d 750, 751 (2d Cir. 1949).
28
Heffernan & Co. v. Hartford Ins. Co. of Am., 614 A.2d 295, 298 (Pa. Super. Ct. 1992) (citing
Gedeon v. State Farm Mut. Auto. Ins. Co., 188 A.2d 320, 321–22 (Pa. 1963)).

11
applies even when the complaint has only “one allegation that falls within the scope

of the policy’s coverage . . . [and] even if an insured is ultimately found to be not

liable.” 29 Similarly, when the complaint alleges “facts which would support a

recovery that is covered by the policy, it is the duty of the insurer to defend until

such time as the claim is confined to a recovery that the policy does not cover.” 30

B.

We look first to the nature of the claims in the Track One Lawsuits. The

complaints are substantially similar, and often use the same language. Taking

Cuyahoga County’s complaint as representative, it seeks “economic damages” as a

“direct and proximate result” of Rite Aid’s failure to “effectively prevent diversion”

and “monitor, report, and prevent suspicious orders” of opioids.31 Cuyahoga alleges

that Rite Aid’s conduct also “fell far short of legal requirements” and “contributed

significantly to the opioid crisis by enabling, and failing to prevent, the diversion of

opioids” for illegal and non-prescription use.32 Cuyahoga claims the opioid crisis

“saddled [it] with an enormous economic burden,” with “several departments

29
Garzone, 2009 WL 2996468, at *10 (citations omitted).
30
Erie Ins. Exch. v. Transamerica Ins. Co., 533 A.2d 1363, 1368 (Pa. 1987) (citing Cadwallader,
152 A.2d 484); see also Gedeon, 188 A.2d at 321–22 (“[T]he obligation to defend arises whenever
the complaint filed by the injured party may potentially come within the coverage of the policy.”);
Stidham v. Millvale Sportsmen’s Club, 618 A.2d 945, 953–54 (Pa. Super. Ct. 1993) (“If coverage
(indemnification) depends upon the existence or nonexistence of undetermined facts outside the
complaint, until the claim is narrowed to one patently outside the policy coverage, the insurer has
a duty to defend . . . .” (citations omitted)).
31
App. to Opening Br. at A687; accord id. at A339.
32
Id. at A687; accord id. at A339.

12
[incurring] direct and specific response costs that total tens of millions of dollars[,]”

including costs in the areas of medical treatment and criminal justice.33

Absent from the complaints, however, are personal injury damage claims for

or on behalf of individuals who suffered or died from the allegedly abusive

prescription dispensing practices. Rather, the Counties expressly disclaim personal

injury damages to plead around the Ohio Product Liability Act. 34 The Counties

made clear that:

 They “do not seek damages for death, physical injury to person,
emotional distress, or physical damages to property;”35 and

 Their increased costs “are of a different kind and degree than Ohio
citizens at large” and “can only be suffered by [the Counties]” and “are
not based upon or derivative of the rights of others.”36

And as Rite Aid says in its filings in the MDL Opioid Lawsuits,

33
Id. at A715; accord id. at A150 (“Defendants’ conduct in promoting opioid use, addiction,
abuse, overdose and death has had severe and far-reaching public health, social services, and
criminal justice consequences, including the fueling of addiction and overdose from illicit drugs
such as heroin. The costs are borne by Plaintiffs and other governmental entities.”).
34
Rite Aid Corp., 2020 WL 5640817, at *13. Notably, “economic loss” not abrogated under the
OPLA encompasses:

All expenditures for medical care or treatment, rehabilitation services, or other care,
treatment, services, products, or accommodations incurred as a result of an injury,
death, or loss to person that is a subject of a tort action . . . [and a]ny other
expenditures incurred as a result of an injury, death, or loss to person or property
that is a subject of a tort action . . . .

Ohio Rev. Code Ann. § 2307.011(C)). The OPLA has a statute of limitations barring claims after
two years of the date of the injury. Id. at § 2305.10. As such, the “injuries” described in the Track
One Lawsuits, originating in 2015 and before, would be time-barred.
35
App. to Opening Br. at A455; accord id. at A823.
36
Id. at A455; accord id. at A822.

13
  The Counties claim only “indirect and purely economic injuries” that
are “primarily in the form of increased social spending;”37 and

 They “cannot recover for these [direct] expenditures because they do
not constitute an ‘injury’ to either their ‘person or property.’”38

The federal judge overseeing the MDL Opioid Lawsuits also observed that

the Counties “do not seek recovery based on injuries to individual residents” but

instead “seek recovery for direct injuries suffered by the Plaintiffs themselves.”39

And even if a recovery might “also tend to collaterally benefit their residents” that

benefit “does not mean that Plaintiffs seek to litigate on behalf of those residents.”40

Thus, it is undisputed that the Counties in the MDL Opioid Lawsuits disavow

personal injury claims and seek to recover only their own economic damages from

Rite Aid’s alleged contribution to a “public health crisis” of opioid addiction. 41

C.

Next, we examine the Counties’ claims against Rite Aid to decide whether the

Counties seek damages for or because of bodily injury under the 2015 Policy.42 We

37
Pharmacy Defendants’ Objections to Magistrate Judge’s Report & Recommendation
Regarding Motion to Dismiss at 3, 10, In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804
(N.D. Ohio Nov. 2, 2018), ECF No. 1078 (App. to Opening Br. at A1283; A1290).
38
Id. at 10 (App. to Opening Br. at A1290).
39
App. to Opening Br. at A1382 (emphasis omitted).
40
Id.
41
Id. at A496; id. at A150.
42
The parties used “for” and “because of” interchangeably in the duty to defend and indemnity
provision. The 2015 Policy, § I(A)(1)(a). Rite Aid contends that “because of” is broader than
“for” and should be construed to mean “but for.” Answering Br. at 11–12. We assume for the
purposes of argument that “because of” is the standard and use it in our analysis.

14
agree with the Superior Court that the Counties’ economic losses—including for

“medical care”—were arguably linked to care for Ohio residents affected by the

opioid epidemic. But we find that, under the 2015 Policy, damages for bodily injury

are covered losses only when asserted by 1) the person injured, 2) a person

recovering on behalf of the person injured, or 3) people or organizations that treated

the person injured or deceased, who demonstrate the existence of and cause of the

injuries. The Counties expressly disclaimed all personal injury damages in the Track

One Lawsuits and, as they say, their claims are “not based on” the injuries of others.43

Thus, Chubb has no duty to defend those suits.

i.

Obviously, the Counties cannot claim damages for bodily injury. And they

seek compensation for their economic losses, not derivatively for the bodily injuries

suffered by Ohioans in the opioid crisis. Nevertheless, the Superior Court held that

Chubb had a duty to defend because there is a causal connection between the

Counties’ economic damages and the bodily injury suffered by their citizens.

According to the court, the opioid-related injuries to the Counties’ citizens underlie

the economic injuries sought in the Track One Lawsuits.

But Pennsylvania courts have drawn a distinction when interpreting insurance

policies between damages directly related to bodily injury and those that are more

43
App. to Opening Br. at A455; id. at A822.

15
loosely connected—such as bystander suits or negligent infliction of emotional

distress caused by physical injury to others.44 For instance, in Babalola v. Donegal

Group, Inc., the insured sought his costs in defending a lawsuit that alleged

negligence stemming from sexual assault and harassment.45 In the underlying case,

the plaintiffs claimed damages only for emotional harm even though this emotional

harm arose from physical touching. The court dismissed the insurance coverage

case, finding “there [were] no allegations of ‘bodily injury’ in the underlying lawsuit

in connection with the negligence and negligent infliction of emotional distress

claims for which Plaintiff [sought] coverage.”46

We agree with the reasoning of the U.S. District Court for the Western District

of Kentucky in Cincinnati Insurance Co. v. Richie Enterprises LLC.47 In that case,

the defendant drug distributor was sued by West Virginia for allegedly illegally

44
See Miller v. Quincy Mut. Fire Ins. Co., 2003 WL 23469293, at *4–5 (E.D. Pa. Dec. 4, 2003)
(collecting cases and concluding that “the weight of [Pennsylvania] authority is that there must be
some physical injury to the body alleged in order to constitute ‘bodily injury’” for purposes of
insurance policy interpretation); Legion Indem. Co. v. Carestate Ambulance, Inc., 152 F. Supp. 2d
707, 718 (E.D. Pa. 2001) (“Both parties agree that to trigger coverage under an insurance policy,
the plaintiff in an underlying case must allege that some physical injury resulted.”); see also Gov’t
Employees Ins. Co. v. Encelewski, 1995 WL 25427, at *4 (D. Alaska Jan. 13, 1995), aff’d, 94 F.3d
651 (9th Cir. 1996) (finding physical manifestations of emotional distress constitute bodily injury
for the purposes of an insurance provision).
45
2008 WL 4006721, at *4 (M.D. Pa. Aug. 26, 2008).
46
Id. See also United Pac. Ins. Co. v. Edgecomb, 706 P.2d 233, 234 (Wash. Ct. App. 1985) (“the
damage award for injuries to the child is combined with the damage award for the parent’s anguish
and grief which are derivative of and entirely dependent upon the injury to the child.”); Skroh v.
Travelers Ins. Co., 227 So. 2d 328, 330 (Fla. Dist. Ct. App. 1969) (holding that a father’s emotional
injury is a direct claim, separate from injury to his son, and that his suffering does not result from
the bodily injury for purposes of an insurance claim).
47
2014 WL 3513211 (W.D. Ky. July 16, 2014).

16
distributing controlled substances, supplying physicians and drugstores with drug

quantities in excess of what was needed for appropriate treatment. The defendant

demanded that its insurer defend under the defendant’s commercial general liability

policy. After the carrier refused coverage, the defendant filed suit, claiming

coverage under the bodily injury policy provisions. In dismissing the case, the

federal district court found:

West Virginia is not seeking damages “because of” the citizens’ bodily
injury; rather, it is seeking damages because it has been required to
incur costs due to [defendant’s] and the other drug distribution
companies’ alleged distribution of drugs in excess of legitimate medical
need.48
To recover, the government did not:

need to prove that persons were injured by prescription drugs to prove
that [the defendant] and the other drug distribution companies violated
[the statute at issue]. Likewise, they need not offer such proof to show
that [the defendant] and the other drug distribution companies caused a
public nuisance—or to show that they were negligent in their
distribution of controlled substances, causing the State of West Virginia
to incur excessive costs. The Attorney General’s claim that persons
suffered physical harm and death due to prescription drugs only
explains and supports the claims of the actual harm complained of: the
economic loss to the State of West Virginia.49

48
Id. at *6.
49
Id. at *5; see also Travelers Prop. Cas. Co. of Am. v. Anda, Inc., 90 F. Supp. 3d 1308, 1314
(S.D. Fla. 2015), aff’d on other grounds, 658 Fed. Appx. 955 (11th Cir. 2016) (“This Court finds
the analysis in Richie Enterprises persuasive and also finds that the Gemini Policy does not cover
the claims asserted in the Underlying Complaint because it seeks damages for the economic loss
to the state of West Virginia and not ‘for bodily injury.’”).

17
 The Seventh Circuit has similarly addressed this type of non-derivative

economic harm in Medmarc Casualty Insurance Co. v. Avent America, Inc.50 In

Medmarc, parents sued Avent after buying Avent’s baby products, alleging

economic injury because they bought and did not use baby bottles made with a

chemical that could be dangerous to children. 51 Applying Illinois law, the court

determined that the plaintiffs had made “a serious strategic decision to pursue only

this limited claim” and the complaints were “seeking only economic damages and

[did] not claim any bodily injury,” and, as such, the claims were not “bodily injury”

claims.52

The Superior Court found that the “crucial distinction” between Medmarc and

the instant case was that the parents’ complaints in Medmarc alleged no actual injury

to their children, while here, the Counties alleged that their citizens were injured by

opioids.53 But the existence of injury—untethered to the claims—does not transform

the allegations into claims for damages “because of” personal injury. The complaint

must do more than relate to a personal injury—it must seek to recover for the

personal injury or seek damages derivative of the personal injury.

50
612 F.3d 607 (7th Cir. 2010).
51
Id. at 609–10 (“at no point . . . 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.”).
52
Id. at 615.
53
Rite Aid, 2020 WL 5640817, at *14.

18
 And in Medmarc, the Seventh Circuit analogized the facts to another

insurance dispute, Health Care Industry Liability Insurance Program v. Momence

Meadows Nursing Center, Inc.54 In Momence Meadows, the complaint described

the underlying bodily injuries to show why the complainants could bring a false

claims action—namely, the filings the nursing home had made to Medicare and

Medicaid were false because they did not mention the physical abuse the nursing

home inflicted. 55 In both Medmarc and Momence Meadows, the bodily injuries

served to “explain and support . . . the actual harm complained of: the economic

loss” due to the defendants’ misrepresentations. 56 Although a physical injury

occurred, it was not the basis of the claims and therefore the damages for general

economic loss were excluded from coverage.

The Superior Court also observed that Delaware and Pennsylvania law

“recognize that the duty to defend test extends past the mere labels of a claim,

inquiring into whether the factual allegations in the underlying complaint potentially

support a covered claim.”57 We agree that carriers have a broad duty to defend that

may be triggered by the factual allegations of the pleadings.58 But the Track One

54
Id. at 616–17 (citing Health Care Ind. Liability Ins. Program v. Momence Meadows Nursing
Center, Inc., 566 F.3d 689 (7th Cir. 2009)).
55
566 F.3d at 691, 694 (cited with approval in Medmarc, 612 F.3d at 617).
56
612 F.3d at 617 (citing Momence Meadows, 566 F.3d at 694).
57
Id. at *15.
58
Erie Ins. Exch., 533 A.2d 1363, 1368 (Pa. 1987) (where the complaint alleges “facts which
would support a recovery that is covered by the policy, it is the duty of the insurer to defend until

19
Lawsuits have no claims for personal injury—just facts that support the economic

loss claims. “[T]he key is ‘whether the allegations of the complaint, when read as a

whole, assert ‘a risk within the coverage of the policy.’”59 Here, the plaintiffs do not

seek damages for personal injury. They seek to recover for non-derivative economic

loss.

Rite Aid points us to Acuity v. Masters Pharmaceutical, Inc.60 In Acuity, the

court held that similar complaints from the MDL Opioid Lawsuits triggered a duty

to defend because “there is arguably a causal connection between [the opioid

distributor’s] alleged conduct and the bodily injury suffered by individuals who

became addicted to opioids . . . and the damages suffered by the governmental

entities (money spent on services like emergency, medical care, and substance-abuse

treatment).”61 As such, the Ohio First District Court of Appeals held the injuries

claimed were arguably “because of” bodily injury.62

We disagree with the intermediate Ohio appellate court’s reasoning in Acuity.

The court interpreted “because of bodily injury” to mean any injuries “causally

such time as the claim is confined to a recovery that the policy does not cover.” (citing
Cadwallader, 152 A.2d 484)); Gedeon, 188 A.2d at 321–22 (“[T]he obligation to defend arises
whenever the complaint filed by the injured party may potentially come within the coverage of the
policy.”).
59
IDT, 2019 WL 413692, at *10 (citing Verizon Commc’ns Inc. v. Illinois Nat’l Ins. Co., 2017 WL
1149118, at *6, *7 (Del. Super. Ct. Mar. 2, 2017), rev’d and remanded sub nom. In re Verizon Ins.
Coverage Appeals, 222 A.3d 566 (Del. 2019)).
60
2020 WL 3446652 (Ohio Ct. App. June 24, 2020), appeal allowed, 159 N.E.3d 277 (Ohio 2020).
61
Id. at ¶28 (emphasis omitted).
62
Id. at ¶29.

20
related” to personal injury, and held “the policies expressly provide for a defense

where organizations claim economic damages, as long as the damages occurred

because of bodily injury.” 63 As discussed above, that is not our reading of the

personal injury terms under the 2015 Policy. 64 There must be more than some

linkage between the personal injury and damages to recover “because of” personal

injury: namely, bodily injury to the plaintiff, and damages sought because of that

specific bodily injury. The 2015 Policy does not provide for coverage unless it is

connected to the personal injury, independently proven, and shown to be caused by

the insured.65

Rite Aid also relies on two cases that held an insurer is obligated to defend if

the policy could potentially be interpreted to cover the claims in a complaint.66 The

first is American and Foreign Insurance Co. v. Jerry’s Sport Center, Inc. 67 In

Jerry’s Sport, the National Association for the Advancement of Colored People and

the National Spinal Cord Injury Association filed suit on behalf of their members

against firearm wholesalers and distributors, claiming liability for injury, death, and

damages because of the industry’s failure to distribute firearms safely.68 While the

63
Id. at ¶¶ 17, 28.
64
See Section II(C)–(C)(i).
65
For the same reason we disagree with the court’s reasoning in Cincinnati Ins. Co. v. Discount
Drug Mart, Inc., 2021-Ohio-4604 (Ohio App. Dec. 30, 2021).
66
Answering Br. at 10–11 (first citing Jerry’s Sport, 2 A.3d at 540–41, then citing Erie Ins. Exch.
v. Moore, 228 A.3d 258, 265 (Pa. 2020)).
67
2 A.3d 526.
68
Id. at 529.

21
plaintiffs alleged bodily injury, they did not seek damages to compensate the

individual members but damages consisting of “a fund for the purpose of the

education, supervision, and regulation of gun dealers.”69 The defendant’s insurer

provided a defense while reserving rights, and prevailed when the trial court decided

the complaint did not allege bodily injury.

The carrier then filed suit against Jerry’s Sport to recover its defense costs.

The Pennsylvania Supreme Court found that the carrier was not entitled to recover

its defense costs because an insurer could not simply reserve its rights while still

providing a defense: “If [the insurer] believes there is no possibility of coverage,

then it should deny its insured a defense because the insurer will never be liable for

any settlement or judgment.”70 The court also held that “the duty to defend is not

limited to meritorious actions; it even extends to actions that are ‘groundless, false,

or fraudulent’ as long as there exists the possibility that the allegations implicate

coverage.”71

While the Pennsylvania Supreme Court expressed some doubt about the trial

court’s interpretation of the phrase “because of bodily injury,” it did not address the

merits of the trial court’s ruling and whether economic damages could fall under

69
Id. at 531.
70
Id. at 542 (citing Shoshone First Bank v. Pacific Employers Ins. Co., 2 P.3d 510, 516 (Wyo.
2000)).
71
Id. at 541; see also Transamerica, 533 A.2d at 1368 (“If the complaint filed against the insured
avers facts which would support a recovery that is covered by the policy, it is the duty of the insurer
to defend until such time as the claim is confined to a recovery that the policy does not cover.”).

22
bodily injury.72 Instead, Jerry’s Sport simply confirms that an insurer cannot double

back on the coverage question once it decides to provide a defense.73

And in the second case, Erie Insurance v. Moore, the Pennsylvania Supreme

Court found that “the duty to defend is triggered ‘if the factual allegations of the

complaint on its face encompass an injury that is actually or potentially within the

scope of the policy.’”74 The Court held the complaint triggered coverage under the

policy provision for an “accidental injury” when it alleged an “accidental shooting”

which the insurer claimed was an intentional act.75 Even though the facts of the

complaint could support an intentional act, the court held, it was the specific

language of the claim—which fell within the policy provision—that gave rise to the

duty to defend.

We agree that an insurance policy is typically interpreted against the insurer

when the policy is ambiguous, and there is a duty to defend when a complaint

invokes coverage, even if the allegations of the complaint are in dispute. But the

requirement to defend against “groundless, false, or fraudulent” claims applies when

72
Moreover, the trial court’s ruling rested on the question of the type of damages sought, while
acknowledging “the complaint [alleged] . . . Defendants have caused bodily injury to members of
the NAACP.” Am. and Foreign Ins. Co. v. Jerry’s Sports Ctr., 2003 WL 25884676 (Pa.Com.Pl.).
73
Jerry’s Sport, 2 A.3d at 540–42 (“We agree with Insured that whether a complaint raises a claim
against an insured that is potentially covered is a question to be answered by the insurer in the first
instance, upon receiving notice of the complaint by the insured.”).
74
228 A.3d at 265 (quoting Babcock & Wilcox Co. v. Am. Nuclear Insurers, 131 A.3d 445, 456
(Pa. 2015)) (emphasis omitted).
75
Id. at 266.

23
the facts underlying the claims are untrue or misleading—not when the claims do

not, in fact, invoke coverage. If the complaint does not allege damages covered by

the insurance policy, the insurer has no duty to defend.76 The claims here are not

personal injury claims and are not covered under the personal injury coverage

provisions.

ii.

Rite Aid and our colleague in dissent argue that the Track One Lawsuits

“expressly seek [] damages” “claimed by an ‘organization’ for ‘care’ and ‘death’

resulting from ‘bodily injury.’”77 But the language of the 2015 Policy is not how

they present it—the 2015 Policy covers “damages claimed by any person or

organization for care, loss of services or death resulting at any time from the

‘personal injury.’” 78 “The” personal injury means one that the person or

organization claims is covered by the 2015 Policy. Here the Counties expressly

disclaim injuries suffered by others and instead claim their own increased economic

costs. Although some of those costs involve medical care,79 when an organization

seeks to recover its costs incurred in caring for bodily injury, it must show that it

76
Casper v. Am. Guar. & Liab. Ins. Co, 184 A.2d 247, 249–50 (Pa. 1962).
77
Answering Br. at 2.
78
The 2015 Policy, § I(A)(1)(e) (emphasis added).
79
App. to Opening Br. at A435–36; id. at A788.

24
treated an individual with an injury, how much that treatment cost, and that the injury

was caused by the insured.80 That is not what the plaintiffs seek to recover here.

Instead, the Counties’ claims stem from a particular action—Rite Aid’s

negligent distribution of opioids to the public.81 This claim is not directed to an

individual injury but to a public health crisis. It is analogous to a city suing an

insured soda distributor for increasing its citizens’ obesity rates.82 The city might

claim costs for expanding its parks and recreational activities to address weight gain

or increased public hospital expenditures for treating the population (e.g., more

nurses, administrative costs, a new operating center for gastric bypass surgery). But

these economic claims would not stem from any individual injury. In other words,

the city would not be bringing a personal injury claim or one for derivative loss, but

rather a direct claim for its own aggregate economic injury. Without claiming

damages directly incurred in treating a specific individual’s obesity, the soda

distributor would not be covered under an insurance policy providing coverage to a

80
See, e.g., Northland Cas. Co. v. T-N-T Ranch & Rodeo Co., LLC, No. 11-01275-SJ-CV-DGK,
2013 WL 3212289, at *2, *5 (W.D. Mo. June 24, 2013) (where parents sued under similar “care”
policy language to recover their expenses “arising out of” their daughter’s injury, which had
previously been covered by the policy); Medmarc Cas. Ins. Co., 612 F.3d at 615 (finding the claims
“lack the essential element of actual physical harm to the plaintiffs” for a bodily injury claim);
Miller, 2003 WL 23469293, at *4–5 (finding under Pennsylvania law that without a specific
underlying bodily injury in the complaint, the policy provision covering “bodily injury” was not
invoked).
81
App. to Opening Br. at A694–95.
82
Vasanti S Malik, Matthias B. Schulze, and Frank B. Hu, Intake of Sugar-Sweetened Beverages
and Weight Gain: A Systematic Review, 84 Am. J. Clin. Nutr. 274 (Aug. 2006), available at
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3210834/.

25
“person or organization for care, loss of services or death resulting at any time from

the bodily injury.”83

The Superior Court, relying on Cincinnati Insurance Co. v. H.D. Smith,

L.L.C., analogized the MDL Opioid Lawsuits claims to a mother suing to recover

her own costs incurred while treating her injured child:

Based on the same policy language as in the 2015 Policy, the insurer
conceded that its policy would cover a mother’s cost of “care” for her
son’s opioid-related injuries, though those are “her own” damages. As
the H.D. Smith court observed, under the policy language, “the result is
no different merely because the plaintiff is a state, instead of a
mother.”84
But in this example, the mother must demonstrate that her child was injured

by the product and that her costs were incurred because of those injuries.85 Both

claims—the mother’s and the Counties’—are direct claims, asserting their own

losses. They differ in that the mother’s claim depends on proof of personal injury to

her child. The insurer would be liable for the mother’s costs under a bodily injury

provision only if the harm was the immediate and direct result of her child’s personal

injury. Here, the County has disclaimed any recovery for personal injuries stemming

from the opioid epidemic.

83
The 2015 Policy, § I(A)(1).
84
Rite Aid, 2020 WL 5640817, at *15 (citing Cincinnati Ins. Co. v. H.D. Smith, L.L.C., 829 F.3d
771, 773 (7th Cir. 2016)).
85
Medmarc, 612 F.3d 607; see also Wall by Lalli v. Fisher, 565 A.2d 498, 502 (Pa. Super. 1989)
(“[T]he element of physical harm or injury is a necessary element of the right of the Appellant
mother to recover on her claim of negligent infliction of emotional distress in this case.”);
Northland Cas. Co., 2013 WL 3212289, at *2.

26
 Finally, looking to the “mutual intent at the time of contracting[,]” 86 “an

objective, reasonable third party”87 would read “damages claimed by any person or

organization for care . . . or death resulting at any time from the ‘personal injury’”

to mean damages directly resulting from the personal injury—damages for providing

care to an injured individual. If the Counties ran public hospitals and sued Rite Aid

on behalf of these hospitals to recover their actual, demonstrated costs of treating

bodily injuries caused by opioid overprescription, the 2015 Policy would most likely

be triggered. But the Counties’ alleged damages do not depend on proof of bodily

injuries. Thus, the complaints are not covered by the 2015 Policy.

III.

We reverse the Superior Court’s judgment and find that Chubb does not have

a duty to defend Rite Aid in the Track One lawsuits under the 2015 Policy.

86
Goggin, 2018 WL 6266195, at *4.
87
IDT Corp., 2019 WL 413692, at *7 (citation omitted); see also Rambo, 906 A.2d at 1236.

27
VAUGHN, Justice, dissenting:

Chubb’s duty to defend is “broader than its duty to indemnify”1 damages. As

the Majority notes, an “insurer has an obligation to defend its insured, even if the

action against the insured is groundless, whenever the complaint . . . may potentially

come within the coverage of the policy.”2 The inquiry turns on the “four corners”

of the complaint in the underlying case, which must be “taken as true and liberally

construed in favor of the insured.”3 As long as the complaint “‘might or might not’

fall within . . . coverage, the [insurer] is obliged to defend.”4 Although the Court

looks to the allegations of the underlying complaint, the Court is not “limited to the

plaintiff’s unilateral characterization of the nature of [its] claims.” 5 The Court

considers “all reasonable inferences that may be drawn from the alleged facts.”6

The policy in this case provides that Chubb will “pay those sums that the

insured becomes legally obligated to pay as damages because of ‘personal

injury[.]’”7 It defines “[d]amages because of ‘personal injury’” to include “damages

1
Answering Br. at 10 (quoting Am. and Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526,
540-41 (Pa. 2010)).
2
Maj. Op. at 11 (quoting Gedeon v. State Farm Mut. Auto. Ins. Co., 188 A.2d 320, 321-22 (Pa.
1963)).
3
Answering Br. at 10 (quoting Jerry’s Sport, 2 A.3d at 261 n.2, 265).
4
Jerry’s Sport, 2 A.3d at 541.
5
Verizon Commc’ns Inc. v. Illinois Nat’l Ins. Co., 2017 WL 1149118, at *6 (Del. Super. Ct. Mar.
2, 2017), rev’d and remanded sub nom. In re Verizon Ins. Coverage Appeals, 222 A.3d 566 (Del.
2019) (finding that the same law applies in Delaware and New York regarding the duty to defend
and to advance defense expenses).
6
Blue Hen Mech., Inc. v. Atl. States Ins. Co., 2011 WL 1598575, at *2 (Del. Super. Apr. 21, 2011).
7
App. to Opening Br. at A1015, § I(A)(1).

1
claimed by any person or organization for care, loss of services or death resulting at

any time from the ‘personal injury.’”8 I interpret this language broadly, as I should,

to cover all damages that any organization claims against Rite Aid for the care, loss

of services or death from personal injury sustained by any natural person.

In this case, the alleged personal injury is opioid addiction. The Counties

assert a number of claims and a number of elements of damages, but using the

Summit complaint as an example, I would find that the claims asserted against Rite

Aid include claims for damages because of personal injury from opioid addiction.

In paragraph 20 of the complaint, for example, following averments that discuss the

extensive addiction and deaths caused by opioids, Summit avers that the defendants’

“conduct in promoting opioid use, addiction, abuse, overdose and death has had

severe and far-reaching public health . . . consequences, including the fueling of

addiction and overdose from illicit drugs such as heroin.”9 Paragraph 20 further

alleges that “[t]he costs are borne by Plaintiffs and other governmental entities.”10

Also in paragraph 20, Summit alleges that “necessary and costly responses to the

opioid crisis include . . . providing addiction treatment, . . . treating opioid-addicted

newborns in neonatal intensive care units, [and] burying the dead.”11

8
Id. at § I(A)(1)(b)(2).
9
App. to Opening Br. at A150.
10
Id.
11
Id.

2
 In paragraph 167, the complaint alleges that the alleged public nuisance, that

is, the opioid epidemic, can be abated by several activities including “providing

addiction treatment to patients who are already addicted to opioids.”12 Paragraph

168 alleges that the defendants “have the ability to act to abate the public

nuisance.”13 These allegations can be construed as seeking a judgment requiring

Rite Aid to pay for the cost of treating patients who are addicted to opioids.

Paragraphs 987 and 1017 allege that Rite Aid violated and/or aided and

abetted violations of R.C. § 2925.02(A), which provides that “[n]o person shall

knowingly . . . [b]y any means, administer or furnish to another or induce or cause

another to use a controlled substance, and thereby cause serious physical harm to the

other person, or cause the other person to become drug dependent.”14 Paragraph

1025 alleges that “[a]s a direct and proximate result of Defendants’ tortious conduct

and the public nuisance created by Defendants, Plaintiffs have suffered and will

continue to suffer . . . emergency, health, . . . rehabilitation, and other services.”15

Paragraph 1039 alleges that “[p]laintiffs seek all legal and equitable relief as allowed

by law, including . . . restitution, . . . compensatory . . . and all damages allowed by

law to be paid by the Defendants.”16

12
Id. at A189.
13
Id.
14
Id. at A447, A452.
15
Id. at A454.
16
Id. at A456.

3
 Allegations such as these set forth, at least potentially, claims against Rite Aid

for damages incurred by Summit in paying for the care of opioid-addicted persons

and costs associated with their deaths. They also can be construed as seeking

damages from Rite Aid to pay for projected future treatment of opioid-addicted

persons. I would, therefore, find that the complaint asserts claims against Rite Aid,

at least potentially, for “damages because of personal injury,” as that phrase is

defined in the policy, which triggers Chubb’s duty to defend.

The Majority points to paragraphs 1032, 1033, and 1038 of the Summit

complaint, in which the county alleges that the Plaintiffs “do not seek damages for

death, physical injury to person, emotional distress, or physical damages to property,

as defined under the Ohio Product Liability Act[;]” the Plaintiffs’ increased costs

“are of a different kind and degree than Ohio citizens at large” and “can only be

suffered by [the counties]” and “are not based upon or derivative of the rights of

others.”17 They also point to similar statements made in a filing by Rite Aid and

other defendants objecting to a magistrate judge’s report in the underlying litigation.

These averments in Summit’s complaint were apparently a pleading tactic made to

avoid the application of Ohio’s Product Liability Act, which abrogates claims for

death or physical injury but does not abrogate economic loss, including expenditures

for medical care or death as a result of a personal injury. The averments are also

17
Id. at A455.

4
apparently made to try to avoid a statute of limitation contained in Ohio’s Product

Liability Act. The statements in the objections to the magistrate judge’s report are

arguments in opposition to the Counties’ cases on the merits, wherein Rite Aid and

others argue that the Counties can recover in tort only for direct harms. However,

as far as the issue before this Court— Chubb’s duty to defend—is concerned, I think

that the statements in paragraphs 1032, 1033, and 1038 and the objections to the

magistrate judge’s report are beside the point. They do not disavow Summit’s claim

for damages associated with the treatment of opioid-addicted persons or their deaths.

The issue is not how Ohio’s Product Liability Act defines personal injury, or

how the Counties unilaterally define their claims in their complaints. The issue is

whether the facts alleged in the complaint, taken as a whole, may potentially come

within the coverage of the policy. It appears plain to me that the Counties intend to

prove that Rite Aid, along with other drug distributors and others, caused the

personal injury, that is, the alleged opioid-addiction epidemic, that is at the heart of

their claims. It also seems plain that the Counties intend to seek damages for costs

incurred by them for the care, loss of services or death resulting from opioid

addiction. By insuring damages because of personal injury, and defining such

damages to include amounts spent by any organization for the care, loss of services

or death resulting from the personal injury, the policy extends coverage to what can

be termed economic costs associated with that care, loss of services or death.

5
Therefore, some of the relief sought by the Counties, at least potentially, falls with

the policy’s coverage.

I disagree with the Majority’s view that the policy covers only personal injury

claims asserted by the person injured, a person recovering on behalf of the person

injured, or people or organizations that treated the person injured or deceased, who

demonstrate the existence and cause of the injuries. The policy does not contain

such language. The policy covers damages claimed by any organization for the care

of a person injured by Rite Aid. I think the policy language is broader than the

Majority’s rule.

I also think that Cincinnati Insurance Co. v. Richie Enterprises LLC,18 a case

from the Western District of Kentucky, is distinguishable from this case and of no

real help. The underlying lawsuit in that case was one brought against Richie, a

pharmaceutical drug distributor, by the Attorney General of the State of West

Virginia. Richie’s insurer, Cincinnati, brought a declaratory action seeking a

judgment that West Virginia’s suit did not fall within the coverage of the policy it

had issued to Richie and it had no duty to defend. West Virginia’s suit initially

contained a Count VII, which was a claim for the cost of a medical monitoring

program in connection with a prescription drug abuse epidemic. The court initially

found that Count VII sought “damages for ‘bodily injury’” that triggered the duty to

18
2014 WL 3513211 (W.D. Ky. July 16, 2014).

6
defend.19 However, West Virginia amended the complaint in the underlying action

to eliminate Count VII altogether. Cincinnati then asked the court to reconsider its

decision finding a duty to defend. Upon reconsideration, the court found that in the

absence of Count VII, West Virginia did “not need to prove that persons were injured

by prescription drugs to prove that Richie and other drug distribution companies

violated West Virginia’s Uniformed Controlled Substances Act or Consumer Credit

and Protection Act[,]” 20 or to show that Richie and other distribution companies

caused a public nuisance or were negligent in their distribution of controlled

substances, “causing the State of West Virginia to incur excessive costs.” 21 The

court further found that West Virginia was not “seeking damages ‘because of’ the

citizens’ bodily injury; rather, it [was] seeking damages because it [had] been

required to incur costs due to Richie and the other drug distribution companies’

alleged distribution of drugs in excess of legitimate medical need.”22 In this case,

however, the Counties’ complaints do seek damages for the cost of the care and

death of persons addicted to opioids, damages that are, at least potentially, included

in the policy’s definition of “damages because of personal injury.”

19
Id. at *2.
20
Id. at *5.
21
Id.
22
Id. at *6.

7
 Medmarc Casualty Insurance Co. v. Avent America, Inc.23 is distinguishable

because, in that case, no personal injuries were even alleged. As the trial judge in

this case put it, “[t]he decisions in Richie and Medmarc either view the alleged facts

too narrowly or do not involve claims similar to those asserted in the Track One

Lawsuits.” 24 Health Care Industry Liability Insurance Program v. Momence

Meadows Nursing Center, Inc.25 involved claims under the federal False Claims Act

and the Illinois Whistleblower Reward and Protection Act. It did not involve claims

for damages for personal injury.

The case that seems to be the most factually similar to this case is Cincinnati

Insurance Co. v. H.D Smith, L.L.C., 26 a case from the Seventh Circuit Court of

Appeals. In an underlying action, the State of West Virginia brought suit against

pharmaceutical drug companies, claiming that West Virginia faced an “‘epidemic of

prescription drug abuse’ that [cost] it hundreds of millions of dollars every year”27

and asserting a variety of claims against the companies. One of the claims, like one

of the claims here, was that West Virginia had spent large sums of money “caring

for drug-addicted West Virginians.”28 More specifically, the suit alleged that West

Virginia incurred damages by paying for hospital services for persons addicted to

23
612 F.3d 607 (7th Cir. 2010).
24
Appellant’s Opening Br. Ex. A at 32-33.
25
566 F.3d 689 (7th Cir. 2009).
26
829 F.3d 771, 773 (7th Cir. 2016).
27
Id. at 772.
28
Id. at 773.

8
opioids, many of whom had no medical insurance coverage. The relevant language

in H.D. Smith’s insurance policy was substantially the same as the language

involved here. It defined “damages because of bodily injury” as “damages claimed

by any person or organization for care, loss of services or death resulting at any time

from the bodily injury.”29 Cincinnati, H.D. Smith’s insurer, refused to provide a

defense and filed suit in federal court seeking a declaration that the policy did not

cover West Virginia’s suit. The federal district court ruled in favor of Cincinnati.

The Seventh Circuit Court of Appeals reversed. It distinguished Medmarc,

previously decided by the same Court of Appeals, on the grounds that no actual

personal injury was alleged in Medmarc. Cincinnati made essentially the same

arguments in H.D. Smith that Chubb makes here. The Court ruled that West

Virginia’s claim that H.D. Smith was liable for money it spent caring for drug-

addicted West Virginians was potentially within the policy coverage and Cincinnati

had a duty to defend. In this case, Summit has alleged that “necessary and costly

responses to the opioid crisis include . . . providing addiction treatment, treating

opioid-addicted newborns in neonatal intensive care units, [and] burying the dead.”30

On the points that are relevant–the underlying claim and the policy language–H.D.

29
Id.
30
App. to Opening Br. at A150.

9
Smith appears to be virtually indistinguishable from this case, and the result should

be the same here.

A very recently decided case out of an Ohio state appeals court, Cincinnati

Insurance Co. v. Discount Drug Mart, Inc.,31 is also instructive. In Discount Drug

Mart, Summit and Cuyahoga Counties sought economic damages for Discount Drug

Mart’s alleged role in the opioid crisis, which the counties claimed caused “a

dramatic increase in opioid abuse, addiction, overdose, and death.”32 The insurance

policy in question contained language similar, yet arguably narrower, to the

language in Rite Aid’s policy. In that case, Cincinnati Insurance had a duty to defend

when a claimant sought damages “because of ‘bodily injury’ or ‘property

damage.’” 33 Bodily injury was defined as “bodily injury, sickness or disease

sustained by a person, including death resulting from any of these at any time.”34

Similarly to the Counties’ complaints in this case, Summit and Cuyahoga disclaimed

“damages for death, physical injury to person, emotional distress, or physical

damages to property, as defined under the Ohio Product Liability Act”35 and alleged

that their claims were “not based upon or derivative of the rights of others.” 36

31
2021-Ohio-4604 (Ohio App. Dec. 30, 2021).
32
Id. at 4.
33
Id. at 5.
34
Id.
35
Id. at 20.
36
Id.

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 Unlike the Majority here, the Ohio appeals court did not give much weight to

the counties’ renunciation of damages related to physical injury. Rather, relying on

the reasoning in H.D. Smith, the court held that “although the counties are expressly

seeking economic damages, we find that at least part of those claimed damages are

for services that the counties have arguably had to provide ‘because of bodily

injury.’”37 The language involved in Rite Aid’s policy is arguably broader than the

language involved in Discount Drug Mart.

For the foregoing reasons, I would find that Rite Aid’s policy provides

coverage for some of the damages sought by the Counties, at least potentially, and

affirm the Superior Court’s ruling that Chubb has a duty to defend.38

37
Id. at 25.
38
The Majority writes that the Counties’ claims do not depend on proof of underlying bodily
injury. That may be true with respect to some of the Counties’ claims, such as their claims that
Rite Aid violated laws pertaining to the sale and distribution of opioids. But it appears to me that
the Counties’ claims against Rite Aid for costs associated with the treatment and death of opioid-
addicted persons will involve proof of widespread bodily injury from opioid addiction to persons
within their respective jurisdictions.

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