Premises & Retail Liability

The Delaware Superior Court in In re Albertsons Opioid Insurance Litigation reaffirmed and expanded Delaware’s growing body of opioid insurance coverage jurisprudence, holding that commercial general liability had no duty to defend or indemnify Albertsons in more than 100 opioid-related governmental lawsuits. The Court rejected Albertsons' attempt to avoid the Delaware Supreme Court's decisions in ACE American Insurance Co. v. Rite Aid Corp. and In re CVS Opioid Insurance Litigation through a choice-of-law argument, finding no meaningful conflict between Delaware, California, and Idaho law. The decision further solidifies Delaware as a jurisdiction that narrowly construes coverage for governmental opioid claims seeking recovery of public expenditures and economic losses.

Albertsons operates retail pharmacies throughout the United States and, like many pharmacy chains, has been named in numerous lawsuits arising from the opioid epidemic. Governmental entities, including states, counties, municipalities, and tribes, sought recovery for costs allegedly incurred as a result of opioid addiction, treatment, law enforcement efforts, public health programs, and other opioid-related expenditures.

Albertsons tendered more than 100 underlying opioid lawsuits to its commercial general liability insurers and sought defense and indemnity coverage under more than 100 policies spanning multiple policy periods. The insurers filed declaratory judgment actions in Delaware seeking rulings that no coverage existed.

Albertsons acknowledged that recent Delaware Supreme Court decisions in Rite Aid and CVS presented significant obstacles to coverage. Rather than attempting to distinguish those cases on the underlying allegations, Albertsons argued that California or Idaho law should apply because those states purportedly interpreted "damages because of bodily injury" more broadly than Delaware.

The Court granted summary judgment to the insurers and denied Albertsons’ motion for partial summary judgment, first holding that there was no actual conflict between Delaware law and the laws of California or Idaho.  Under Delaware's choice-of-law framework, the court need not conduct a full "most significant relationship" analysis unless competing states' laws would produce different outcomes. Here, the court found that California, Idaho, and Delaware all apply materially similar insurance-coverage principles, including: giving policy language its plain meaning; construing ambiguities in favor of the insured; interpreting coverage broadly and exclusions narrowly; and recognizing the broad nature of the duty to defend. 

Having determined Delaware law applied, the court found the case straightforward.  The Court emphasized that Rite Aid and CVS establish that coverage for damages "because of bodily injury" requires a direct connection between the claimed damages and specific bodily injuries.  Following Rite Aid and CVS, the Court held these damages were too attenuated from any specific bodily injury to trigger coverage. Consistent with CVS, the Court held that where the nature of the claims asserted falls entirely outside policy coverage, courts may determine both defense and indemnity obligations as a matter of law. Because the underlying lawsuits sought only uncovered economic losses, no duty to indemnify existed.

Albertsons signals that Delaware courts are unlikely to entertain efforts by pharmacy defendants to relitigate issues already settled by Rite Aid and CVS. Unless an underlying opioid complaint seeks damages tied to specific identifiable bodily injuries or property damage, insurers will have strong grounds to deny coverage under standard commercial general liability forms.