Late last month, the Superior Court of Delaware held that pharmacy giant CVS was not entitled to general liability coverage for the massive number of lawsuits it is facing from municipalities seeking damages for the social services costs incurred to respond to the opioid crisis.  These are such things, among others, that local governments spent on medical services, addiction treatment and incarceration.

The decision was entirely not surprising.  In early 2022, the Delaware Supreme Court said the same thing to Rite-Aid about its opioid claims.  In general, in Rite-Aid, the First State’s top court held that the municipalities were not seeking coverage for damages “because of bodily injury.”  The court concluded that “damages for bodily injury are covered losses only when asserted by 1) the person injured, 2) a person recovering on behalf of the person injured, or 3) people or organizations that treated the person injured or deceased, who demonstrate the existence of and cause of the injuries.”

The Rite-Aid court further explained that “[t]here must be more than some linkage between the personal injury and damages to recover ‘because of' personal injury: namely, bodily injury to the plaintiff, and damages sought because of that specific bodily injury.’  The bodily injuries alleged in a given complaint must do more than ‘explain and support’ any economic loss the counties suffered. The individual physical injury must be ‘the basis of the claims,’ ‘independently proven, and shown to be caused by the insured.’”

The CVS decision is lengthy and addresses the specifics of numerous of the suits and applicable policy language.  But it can be summarized simply and briefly: CVS attempted to distinguish its situation from Rite-Aid.  The court examined Rite-Aid in detail, cited it countless times, and rejected the effort.

For more on the Rite-Aid case, which is to say more on the recent CVS decision, I included it as one of the top 10 coverage cases of 2022 in my annual insurance coverage hit parade.