American International Group Inc. and Chubb Ltd. units will not have to pay McKesson Corp.’s defense costs in connection with three representative cases filed in the opioid dispute because the drug distributor’s alleged actions were unintentional, a federal district court in San Francisco said Wednesday.
McKesson sued AIG National Union Fire Insurance Co. in Pittsburgh and the Chubb unit ACE Property and Casualty Insurance Co. and sought defense costs in litigation brought against it by two states in Ohio and the state of Oklahoma for its alleged liability in connection with the opioid epidemic, according to the judgment in AIU Insurance Co., et al. v. McKesson Corp.
The three cases are “exemplary lawsuits”;, according to the district court’s ruling.
The judgment focuses on the insurers’ obligation to defend McKesson, which, as it stands, is broader than the liability.
The lawsuit “for claims based on alleged intentional conduct – McKesson’s distribution of opioids – and claims that the conduct caused harm to the state plaintiffs,” the ruling said.
“Because the allegations are based on intentional conduct, they are not alleging an accident”unless “any further, unexpected, independent and unforeseen event occurs that causes the damage”, it is stated in an earlier case.
“To resolve all doubts in McKesson’s favor … the complaints did not state facts which suggested that diversion was an additional, unexpected, independent and unforeseen event which caused the damage, nor did the other facts which suggest an alternative further, unexpected, independent and unforeseen event caused the damage “, it was stated in the judgment, in favor of the insurer.
Lawyers in the case had no comments or did not respond to requests for comment.
Last year, McKesson, along with AmerisourceBergen Corp. and Cardinal Health Inc., the three largest US drug distributors, along with drug maker Johnson & Johnson, proposed paying up to $ 26 billion to resolve opioid-related disputes.
According to the Opioid Settlement Tracker, more than 3,000 cases filed by plaintiffs, counties, and tribal states against dozens of “big pharma” opioid defendants are involved in multi-district opiate litigation.
From 1999 to 2019, nearly 500,000 people died from an overdose involving some opioid, including prescription and illegal opioids, according to the Centers for Disease Control.