Delaware high court denies Albertsons coverage for opioid lawsuits

A coalition of major commercial insurers defeated a bid by grocery chain Albertsons to recover the costs of defending more than 100 opioid lawsuits under its commercial general liability policies.

Unsealed on Wednesday, In re Albertsons Opioid Insurance Litigation is the latest failed attempt by corporate policyholders to make insurers pay for “public nuisance” opioid lawsuits. In its ruling, the Delaware Supreme Court cited precedents from opioid rulings involving rival pharmacy chains RiteAid and CVS.

Albertsons, headquartered in Boise, Idaho, operates pharmacies in many of its grocery stores and has been named as a defendant in 109 opioid lawsuits brought by states, counties, municipalities and tribal governments seeking to recover the costs of the public health crisis.

The company sought coverage under more than 100 commercial general liability policies issued by insurers, including Chubb and American International Group.

The policies generally promised to pay damages the policyholder became legally obligated to pay “because of” bodily injury or property damage. Delaware courts have consistently held that the phrase “because of” implies a direct connection between the damages sought and a specific bodily injury. The governmental plaintiffs in the opioid lawsuits sought reimbursement for broad economic losses stemming from the epidemic, including the cost of public health programs, law enforcement and social services.

“Just as the Delaware Supreme Court held in Rite Aid and CVS, there is no coverage under the insurance policies at issue here,” wrote Judge Patricia A. Winston.

The court had noted in the Rite Aid case that if a public hospital had sued Rite Aid “to recover actual demonstrated costs of treating bodily injuries caused by opioid overprescription,” the policy would likely have been triggered.

Albertsons had asked the court to apply the laws of California or Idaho, where its operations are concentrated. The court rejected that move, finding that neither state had addressed the core legal question in a way that conflicted with Delaware’s approach.

Albertsons announced a $774 million settlement of the opioid suits on April 14, about two weeks before the ruling. It recorded a $600 million related charge, resulting in a net loss of $481 million for the quarter.