Walmart Inc. owns Bentonville has thousands of pharmacy locations like this one in Minnesota. A Bentonville company is fighting in court to make its insurers pay millions of dollars in legal costs incurred in lawsuits related to opioid sales. (stock struggle)
Walmart Inc. won. won an early legal victory last month in its battle with insurers that refused to cover Walmart’s legal costs and billions of dollars in settlements the retailer made in lawsuits over its sales of opioid medications.
Benton County Circuit Court Judge John R. Scott on December 29 that the entities of American International Group Inc. She has a duty to defend the Bentonville retail giant against lawsuits brought by governments over the opioid crisis. The AIG entities that insured Walmart are American Home Assurance Co. and National Union Fire Insurance Co. In Pittsburgh, Pennsylvania.
Walmart has sued the insurance companies to recover money it paid for attorneys and other defense costs in the lawsuits. It is also seeking coverage for billions in settlements it has paid.
“Wal-Mart has spent hundreds of millions of dollars defending opioid-related lawsuits, and expects to spend many millions more,” the company said in a lawsuit in the case. He did not specifically mention the amount spent.
Scott also said in his 19-page order that his ruling could be appealed now, rather than waiting until the end of the trial, which is scheduled to begin March 24, 2025. If Walmart’s motion for partial summary judgment is denied on appeal, Judge Scott wrote that the trial before A jury would not be necessary because Walmart “will not be entitled to award any damages against the defendants.”
The case is expected to remain pending during appeal.
In November 2022, Walmart filed a lawsuit against more than three dozen insurance providers, saying that its insurers were obligated to cover defense costs, settlements, judgments and other losses, but it did not do so. It is estimated that more than 100 lawyers are involved in the case.
Walmart isn’t the only retailer suing its insurers for denying coverage in opioid-related lawsuits. Walgreen Co. in Deerfield, Illinois, and CVS Health Corp. in Woonsocket, Rhode Island, sued its insurers for denying coverage in similar cases.
Walmart said in court filings that insurance policies have two sides. One is the duty to defend, which is to pay attorneys’ fees, and the other is the duty to indemnify – to compensate the insured party for damage or loss.
In November 2022, without admitting liability, Walmart said it agreed to pay $3.1 billion to settle all lawsuits filed by state and local governments alleging that Walmart created a public nuisance that resulted in taxpayers paying more for public services related to opioid addiction treatment. And care. And other related services. Walmart and the pharmacy chains have argued that they are legally obligated to fill legitimate prescriptions for painkillers.
Walmart asked Scott to weigh in on the policies of the AIG entities. Meanwhile, dozens of other Walmart insurers have asked Scott to rule that they do not have a duty to defend Walmart because the policies do not cover claims in lawsuits brought by governments.
Scott denied this request from insurance companies.
But other judges in other similar cases have found otherwise.
The Delaware Supreme Court and the Ohio Supreme Court have ruled that commercial general liability insurers do not have a duty to defend policyholders against lawsuits brought by government entities seeking to recover billions of dollars allegedly spent to provide a range of public services in response For the case. The opioid epidemic.
Claire Howard, senior vice president and general counsel of the American Property Casualty Insurance Association, agreed with the provisions.
“Commercial general liability insurance policies provide coverage for third-party liability for allegedly wrongful acts where compensation is sought by a person who has suffered bodily injury or property damage,” she said in an email statement to Arkansas Business. “These policies do not cover a plaintiff’s economic losses that are not related to the plaintiff’s physical injury.”
Expanding coverage to include this “would expose insurers to unanticipated and uncontracted exposures, threatening their ability to meet their contractual obligations to all other policyholders,” it said.
Duty to defend
In Walmart’s lawsuit against the insurers, it said it spent millions of dollars on insurance premiums and expected to be covered against claims like those brought in opioid-related lawsuits.
“But now, as Walmart seeks to rely on the policies it purchased to cover these losses, the insurers have turned their backs, offering a series of excuses for why the policies supposedly do not cover opioid lawsuits,” Walmart said in its 31-page decision. .
The insurers said in their court filings that the policies they had with Walmart did not include a duty to defend against claims alleged in government lawsuits. The insurance companies say these lawsuits do not involve claims of “bodily injury or property damage” resulting from an accident.
Walmart’s $3.1 billion settlement with government agencies aims to help fight the opioid crisis. Walmart’s opioid legal fees appeared as a $3.325 billion expense in its financial results for the quarter ending October 31, 2022.
“Wal-Mart believes these settlements are in the best interests of all parties and will provide significant assistance to communities across the country in combating the opioid crisis, with aid reaching state and local governments faster than any other nationwide opioid settlement to date.” He said in a December 2022 press release.
However, the insurers said Walmart settling the lawsuits is not the goal of the liability policies. Insurers said the policies are intended, for example, to apply to situations such as when an incorrect prescription results in an overdose.
Walmart disagreed. Walmart said its insurance policies generally cover damages for bodily injury and “wrongful acts.”
Scott, a Benton County Circuit Court judge, ruled that insurers had a duty to defend based on allegations in state lawsuits that sought to hold Walmart liable “at least in part, based on allegations that Walmart negligently administered and/or dispensed opioids to over many years.” “Which led to thousands of people being injured.”
The lawsuits against Walmart for negligence are “riddled with allegations based on negligence, including Walmart’s failure to establish adequate policies, training and procedures to prevent the improper diversion of opioids,” Scott said.
Scott added that since there is a “potential for Walmart to be held liable” in government lawsuits, insurers have a duty to defend them.
If the appeals court rules in Walmart’s favor, the next step would be discovery, which could take about a year before a trial takes place to determine whether Walmart is entitled to coverage for the $3.1 billion settlement.
But if the Arkansas Court of Appeals or the Arkansas Supreme Court ruled in favor of the insurers, the case would be dead because if the insurers did not have a duty to defend Walmart, they would not have a duty to pay up. coverage.
As of Tuesday afternoon, the appeal had not been filed.