Ace Am. Ins. Co. v. AmerisourceBergen Drug Corp.

1

ACE American Insurance Company, and ACE Property & Casualty Insurance Company, Defendants Below, Petitioners v. AmerisourceBergen Drug Corporation, and Bellco Drug Corporation Plaintiffs Below, Respondents and St. Paul Fire and Marine Insurance Company, Defendant Below, Petitioner, v. AmerisourceBergen Drug Corporation, and Bellco Drug Corporation Plaintiffs Below, Respondents

Nos. 22-564, 22-575

Supreme Court of Appeals of West Virginia

November 14, 2024

(Circuit Court of Boone County CC-03-2017-C-36)

MEMORANDUM DECISION

"An anti-suit injunction is an order barring parties to an action in this state from instituting or prosecuting substantially similar litigation in another state." Syl. pt. 6 St. Paul Fire & Marine Ins. Co. v. AmerisourceBergen Drug Corp., 246 W.Va. 245, 868 S.E.2d 724 (2021). In St. Paul, this Court affirmed the Circuit Court of Boone County's decision to enter an anti-suit injunction in an insurance coverage lawsuit. The injunction precluded one of the petitioners herein, St. Paul Fire and Marine Insurance Company ("St. Paul"), from prosecuting a lawsuit that it filed in California against respondent AmerisourceBergen Drug Corporation ("ABDC") because the issues in the California case were substantially similar to the coverage issues already being litigated between the parties in West Virginia. See generally id. However, while this Court found the circuit court's order proper, we also found portions of the order "unclear" or "overbroad" as drafted, and so we "remand[ed] the case for clarification of the order[.]" Id. at 258, 868 S.E.2d at 737. On June 10, 2022, the circuit court entered a new order that clarified and explained the breadth and effect of the anti-suit injunction. Petitioner St. Paul, and two other insurance companies, petitioners ACE American Insurance Company and ACE Property & Casualty Insurance Company (hereafter jointly referred to as "ACE"), now appeal that order. After examination of the briefs and the record, and considering the parties' oral arguments, we find no substantial question of law and no prejudicial error, and we determine that a memorandum decision affirming the circuit court's order is appropriate.^[1] See W.Va. R. App. P. 21(c).

This case began in March of 2017, when plaintiff-respondent ABDC filed a complaint in the Circuit Court of Boone County against five defendant insurers (including petitioners St. Paul and ACE). ABDC initially sought coverage under sixteen insurance policies for one prescription opioid lawsuit that had been filed against it by the West Virginia Attorney General. However, in its complaint, ABDC noted it reserved the right to seek coverage for additional lawsuits filed by West Virginia cities, counties, and other entities. ABDC later expanded its request for coverage to as many as 165 other West-Virginia-oriented opioid lawsuits against ABDC. ABDC alleged the defendant insurers had sold liability or excess insurance policies to ABDC but that they had breached their contracts by refusing to provide indemnification or a defense for the opioid lawsuits. ABDC's complaint sought a judicial interpretation of insurance policy language potentially applicable to these opioid lawsuits against ABDC.

In November of 2020, after three-and-a-half years of contentious discovery and motion practice in West Virginia, and well before the West Virginia coverage case had been resolved, St. Paul filed a similar lawsuit against ABDC in Orange County, California. St. Paul also listed numerous other insurers, such as ACE, as defendants. Like the West Virginia case, the California lawsuit generally sought a judicial interpretation of insurance policy language potentially applicable to opioid lawsuits filed nationwide against ABDC.

ABDC responded to the California lawsuit by filing a motion for an anti-suit injunction in Boone County. The motion sought to stop all of the parties to the West Virginia action, including ABDC, St. Paul, and ACE, from pursuing any other lawsuits similar to the insurance-policy-interpretation claims pending in West Virginia. On January 7, 2021, the circuit court entered its first order enjoining the parties from litigating the California lawsuit or any other collateral lawsuits against one another regarding any insurance policy language that might apply to any opioid lawsuit against ABDC.^[2] St. Paul and ACE appealed the circuit court's anti-suit injunction order to this Court. In an opinion filed November 15, 2021, this Court affirmed the circuit court's entry of an anti-suit injunction. See St. Paul, 246 W.Va. at 245, 868 S.E.2d at 724. We held that a trial court may enter an injunction that bars parties to a lawsuit in this State from pursuing "substantially similar litigation" in another State. We stated in Syllabus Point 6 that determining whether litigation in another State is "substantially similar involves assessing (1) the similarity of the parties; (2) the similarity of the issues; and (3) the capacity of the action in this state to dispose of the foreign state action." Id. at 247, 868 S.E.2d at 726. We found no error in the circuit court's finding that St. Paul's California lawsuit was substantially similar and "overlapped and competed with the issues pending in West Virginia." Id. at 256, 868 S.E.2d at 735. We further found that the circuit court did not abuse its discretion when it found that "its ability to successfully resolve the West Virginia suit was threatened by St. Paul's California action." Id. at 257, 868 S.E.2d at 736. In sum, we found "no error by the circuit court in its decision to enter an anti-suit injunction." Id.

Nevertheless, this Court expressed reservations with the "breadth and focus" of the circuit court's anti-suit injunction. Id. While ABDC's West Virginia complaint sought interpretation of sixteen insurance policies, the circuit court's order failed to explain why it prohibited the parties from litigating any other question unrelated to the interpretation of the sixteen identified policies at issue in the West Virginia action. Id. at 258, 868 S.E.2d at 737. Moreover, as written, the circuit court's order precluded the parties "from pursuing some agreed-upon resolution of the California action, or a resolution from the California court such as a stay or a dismissal." Id. Accordingly, we reversed the circuit court's order, in part, and remanded the case with directions that the circuit court clarify its order or otherwise narrowly tailor its impact.

ABDC promptly renewed its motion for the Circuit Court of Boone County to enter an anti-suit injunction and, on June 10, 2022, the circuit court entered another anti-suit injunction order. While ABDC's complaint implicated only sixteen policies, the circuit court noted that the West Virginia coverage lawsuit had expanded during discovery to encompass many other lawsuits, and because coverage may have been triggered under every policy issued by an insurer defendant from January 1, 1996, to the present, the language of every affected policy needed consideration. In a thorough analysis, the circuit court compared the insuring language from the policies at issue in the West Virginia action with the policies raised in the California action and found that the policies issued by St. Paul and ACE at issue in both actions employed "substantially" or "materially identical" terms. The circuit court found that its interpretation of the policies at issue in the West Virginia case would "dispose of the issues regarding the interpretation of the identically worded" policies at issue in the California lawsuit.^[3] Moreover, the circuit court noted that at least twenty of the insurer entities named in the California lawsuit were, in actuality, affiliates of the five insurer defendants in the West Virginia lawsuit. The remaining, unaffiliated insurer defendants in the California lawsuit issued excess insurance policies that "followed form" and incorporated the same terms and conditions as the policies issued by primary insurers like St. Paul and ACE. In sum, the circuit court found that the policies at issue in both California and West Virginia were issued by the insurers "on the same standard forms" and "contain the same exact terms and conditions . . . or incorporate those same terms by reference." Accordingly, because an "overly restrictive [i]njunction would fail to capture the reality of the litigation among the parties," the circuit court determined that its injunction must extend to all policies related to the West Virginia opioid cases.

In recognition of this Court's concern that the circuit court's first order appeared overbroad, the circuit court clarified that its order was temporary. Further, while the West Virginia insurance coverage action is pending, the circuit court explained that it only enjoined the parties from pursuing collateral insurance coverage litigation regarding those lawsuits pending in either the West Virginia Opioid Mass. Litigation Panel case or the National Opioid Multidistrict Litigation. Moreover, the circuit court only barred collateral litigation concerning policies issued to ABDC (or its predecessors and affiliates), and issued by the insurer defendants (or their predecessors and affiliates); and only those insurance policies either (1) expressly at issue in the West Virginia coverage action or implicitly at issue because the policy applies to a West Virginia opioid claim, or (2) written on forms substantially similar to the forms at issue in the West Virginia action (or that follows form to such insurance policies). The circuit court expressly ruled that any party could still seek a compromise resolution of any claims, whether through settlement or otherwise.

Petitioners St. Paul and ACE filed separate appeals of the circuit...