California Court of Appeals Refuses to Lift Stay of Coverage Action Involving Opioid Crises

    The appellate court affirmed the trial court’s order staying St. Paul’s declaratory judgment action involving the defense of distributors of opioid to users. St. Paul Fire & Marine Ins. Co. v. AmerisourceBergen Corp., 2022 Ca. App. LEXIS 535 (Cal. Ct. App. June 20, 2022).

    The trial court issued a stay due to the bellwether case of national importance pending in West Virginia (VW action), which, like this case, was addressing the opioid prescription abuse and addiction crises. The WV action involved whether St. Paul and other insurers were obligated to defend and indemnify the ABC Entities against prescription opioid lawsuits in West Virginia that settled in January 2017 for $16 million. One of the ABC Entities filed the WV coverage action against several insurers in March 2017.

    The WV action commenced four years before St. Paul filed its action in California. By the time the stay was issued, the WV action had progressed significantly. The trial court found that the WV action addressed some of the same policies, including at least one St. Paul policy, to determine whether they covered opioid litigation, which was the subject of the underlying litigation in West Virginia and other states. The trial court therefore stayed further proceedings on St. Paul’s complaint filed in California pending resolution of the WV action. 

    The California Court was unaware of any other case in the country, other than the WV action, addressing coverage issues for the opioid crises. The West Virginia trial judge was among the most experienced jurists in the underlying subject matter having previously heard and resolved similar cases. Since its inception, the parties in the WV coverage action had engaged in discovery and motion practice. On November 20, 2020, the court in the West Virginia action denied the insurers’ summary judgment motions finding that coverage was available under the St. Paul policy, at least at the current stage of the litigation, for lawsuits by government entities seeking damages for injuries suffered by citizens. 

    The appellate court noted that granting a stay in a case where the issues in two actions were substantially identical was a matter of sound discretion of the trial court. Here, St. Paul failed to rebut the ABC Entities showing of sufficient similarity to warrant a stay. St. Paul failed to rebut the ABC Entities’ showing that the relevant policy language was essentially the same. Granting of the stay was affirmed.