In re: CVS Opioid Insurance Litigation

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN RE: CVS OPIOID ) Consol. C.A. No. N22C-02-045
INSURANCE LITIGATION ) PRW CCLD
Submitted: June 14, 2022
Decided: August 12, 2022
MEMORANDUM OPINION AND ORDER
Upon Defendant CVS Health Corporation’s Motion to Dismiss or Stay
DENIED
Garrett B. Moritz, Esquire, and R. Garret Rice, Esquire, ROSS ARONSTAM & MORITZ
LLP, Wilmington, Delaware; Michael S. Shuster, Esquire (argued), Daniel M.
Sullivan, Esquire, Blair E. Kaminsky, Esquire, Daniel K. Phillips, Esquire, and
Daniel M. Horowitz, Esquire, HOLWELL SHUSTER & GOLDBERG LLP, New York,
New York; Susan Koehler Sullivan, Esquire, CLYDE & CO LLP, Los Angeles,
California; Robert M. Mangino, Esquire, CLYDE & CO LLP, Morristown, New
Jersey, Attorneys for ACE Property and Casualty Insurance Company, Federal
Insurance Company, Indemnity Insurance Company of North America, Vigilant
Insurance Company, and Westchester Fire Insurance Company.
Robert J. Katzenstein, Esquire, and Julie M. O’Dell, Esquire, SMITH KATZENSTEIN
& JENKINS LLP, Wilmington Delaware; Christopher J. St. Jeanos, Esquire (argued),
and James E. Fitzmaurice, Esquire, WILLKIE FARR & GALLAGHER LLP, New York,
New York, Attorneys for American Home Assurance Company, Lexington Insurance
Company, National Union Fire Insurance Company of Pittsburgh, P.A., and New
Hampshire Insurance Company.
David J. Baldwin, Esquire, Peter C. McGivney, Esquire, and Zachary J. Schnapp,
Esquire, BERGER HARRIS LLP, Wilmington, Delaware; Kirk Pasich, Esquire, and
Nathan M. Davis, Esquire, PASICH LLP, Los Angeles, California; Jeffrey L.
Schulman, Esquire (argued), and Peter A. Halprin, Esquire, PASICH LLP, New York,
New York, Attorneys for CVS Health Corporation.
WALLACE, J.
CVS Health Corporation (“CVS”) has been named a defendant in myriad
lawsuits for allegedly contributing to and profiting from the country’s opioid crisis
(the “Opioid Lawsuits”). CVS has sought defense and indemnity for the Opioid
Lawsuits from its several insurers. Eight of those insurers collectively filed two
actions in this Court in the first week of February 2022. They seek declarations that
they had no duty to defend or indemnify CVS against the Opioid Lawsuits. Within
days of the commencement of these actions, CVS filed a parallel action against those
insurers in Rhode Island, where CVS maintains its corporate headquarters.
CVS also immediately moved to dismiss or stay these actions, under forum
non conveniens (the “Motion”). CVS accuses the insurers of filing here as an act of
forum shopping and argues that Rhode Island is the proper place for their insurance
coverage dispute. The insurers say CVS’s accusations of forum shopping fall flat
and that CVS cannot meet its burden under the applicable forum non conveniens
analysis. Through their briefing, the parties dispute which standard governs the
Motion and how the Cryo-Maid factors apply to the facts of this case.
For the reasons explained below, the Court holds that the “overwhelming
hardship” standard governs the Motion and that CVS has not met its burden
thereunder. Accordingly, the Motion to Dismiss or Stay is DENIED.
-1-
I. FACTUAL AND PROCEDURAL BACKGROUND
A. THE OPIOID LAWSUITS
The Opioid Lawsuits generally allege that CVS purposefully and intentionally
breached its duties under federal, state, and local law to: maintain effective controls
against the diversion of opioids, to disclose suspicious prescribing orders, and to
avoid filling suspicious prescribing orders. It’s alleged that these breaches resulted
in opioid abuse, addiction, increased morbidity and mortality, and other harms.1 The
Opioid Lawsuits generally seek abatement, injunctive relief, equitable relief,
restitution, damages for economic loss (including punitive damages), and attorney’s
fees.2
Thousands of Opioid Lawsuits have been consolidated for pretrial
proceedings in a multi-district litigation (“MDL”) in the federal district court for the
Northern District of Ohio.3 The MDL suits include actions brought by state, local,
and tribal governments against manufacturers, distributers, and retailers of
prescription opioids.4 The presiding MDL judge has designated several cases
1
Compl. ¶ 34, In re: CVS Opioid Ins. Litig., Consol. C.A. No. N22C-02-045 PRW CCLD (Del.
Super. Ct. Feb. 4, 2022) (D.I. 1).
2
Id. ¶ 35.
3
Id. ¶ 36 (citing City of Dover et al. v. Purdue Pharma L.P. et al., No. 1:20-op-45086 (N.D.
Ohio filed Mar. 2, 2020) and Sussex County, Delaware v. Purdue Pharma L.P. et al., No. 1:19-
op-45723 (N.D. Ohio filed Sept. 10, 2019). The consolidated, MDL lead case is captioned In re:
National Prescription Opiate Litigation, 477 F. Supp. 3d. 613 (N.D. Ohio)).
4
Id.
-2-
against CVS and others as bellwether suits and assigned those cases to numbered
litigation tracks.5 Other Opioid Lawsuits remain pending in state courts, including
an action filed by the State of Delaware in this Court.6
In July 2021, CVS settled Opioid Lawsuits brought by New York State’s
Suffolk and Nassau counties for a combined $26 million against CVS and three other
chain pharmacies.7 On November 23, 2021, a federal jury delivered a finding of
liability against CVS and two other pharmacies in two of the bellwether cases.8
B. CURRENT LITIGATION
Since 2017, CVS has provided notices of certain Opioid Lawsuits to Chubb
Limited seeking to recover its defense costs and to be indemnified under the
policies.9 CVS has tendered more than two thousand Opioid Lawsuits to Chubb in
total, including for the suits resulting in the New York settlements and the federal
jury verdict.10 In response, Chubb notified CVS that it reserved its right to deny
coverage under the relevant policies.11
5
Id.
6
Id. ¶ 38 (citing State of Delaware v. Purdue Pharma L.P. et al., C.A. No. N18C-01-223 MMJ
CCLD (Del. Super. Ct.)).
7
Id. ¶ 39 (internal citation omitted).
8
Id. ¶ 40.
9
Id. ¶ 41. Chubb alleges on information and belief that CVS has provided similar notices to its
other insurers as well. Id.
10
Id. ¶ 42.
11
Id. ¶ 43.
-3-
On February 4, 2022, five Chubb entities—Ace Property and Casualty
Insurance Company, Federal Insurance Company, Indemnity Insurance Company of
North America, Vigilant Insurance Company, and Westchester Fire Insurance
Company (hereinafter collectively, “Chubb”)—together filed a three-count
complaint in this Court “to have the parties’ rights under the Policies finally
determined.”12 Counts I and II seek declarations that Chubb has no duty to “defend
or pay for CVS’s defense of the Opioid Lawsuits” or to “indemnify CVS for the
Opioid Lawsuits,” respectively.13 Alternatively, should the Court determine Chubb
has any defense or indemnification obligations, Count III seeks a “declaration of the
rights and obligations, if any, of the Other Insurers14 with respect to coverage for any
of the underlying Opioid Lawsuits under the terms, conditions, and exclusions of
their respective policies.”15
Two days later, National Union Fire Insurance Company of Pittsburgh, PA,
American Home Assurance Company, and New Hampshire Insurance Company
12
Id. ¶ 44.
13
See id. ¶¶ 45–50.
14
The “Other Insurers,” listed elsewhere in the Complaint, are entities that “issued insurance
policies to CVS with respect to the relevant period.” See id. ¶¶ 18–19. The Complaint explains
that “[t]he Other Insurers are joined to ensure the interests they have or may have in the subject
matter of this declaratory judgment action are not litigated and affected in their absence.” Id. ¶ 18.
15
See id. ¶¶ 51–53.
-4-
(collectively, the “AIG Insurers” and with Chubb collectively, “the Insurers”) filed
a substantially identical action against CVS in this Court.16
Chubb served CVS with its complaint on February 11, 2022.17 The next day,
CVS filed suit against Chubb and the rest of its Insurers in Rhode Island Superior
Court, seeking competing declaratory relief and alleging additional causes of action
for breaches of the Policies, breaches of the implied covenant of good faith and fair
dealing, and statutory bad faith under Rhode Island law (the “Rhode Island
Action”).18
On February 23, 2022, CVS moved to dismiss or stay the Delaware Action in
favor of the Rhode Island Action. In support of the Motion, CVS submitted an
affidavit stating that its risk management and insurance claims departments are
located at CVS’s corporate headquarters in Woonsocket, Rhode Island. 19 CVS
claims that nearly all documents comprising this case’s evidentiary record will be
found in Rhode Island, along with all potential party and non-party witnesses of
16
See Nat’l Union Fire Ins. Co. of Pittsburgh, P.A. et al. v. CVS Health Corp., N22C-02-056
PRW CCLD (Del. Super. Ct.). The two actions have since been consolidated under the caption
and case number: In re CVS Opioid Ins. Litig., Consol. C.A. No. N22C-2-045 PRW CCLD (Del.
Super. Ct.) (hereinafter “the Delaware Action”). See Order to Consolidate, March 21, 2022 (D.I.
93).
17
See D.I. 42.
18
See CVS’s Mot. to Dismiss, Decl. of Jeffrey L. Schulman (D.I. 57).
19
See id., Decl. of Lawrence E. Parks at ¶¶ 2–6.
-5-
CVS.20 CVS specifies that its “insurance and risk management functions have
absolutely no connection to Delaware” and that “[n]o insurer has ever suggested or
requested that a coverage dispute between CVS and its insurers be resolved in
Delaware.”21
Initially, the Complaint named as defendants CVS Health Corporation, CVS
Pharmacy, Inc., and CVS Caremark Corporation.22 The Insurers voluntarily
dismissed the latter two CVS entities after CVS filed the Motion, leaving CVS
Health Corporation as only remaining CVS entity.23 CVS Health Corporation is a
Delaware corporation.24
II. BURDEN AND LEGAL STANDARD FOR FACT-FINDING
The forum non conveniens tests applied by Delaware courts vary based on the
specifics of both the litigation initiated here and the litigation history of the parties.25
But no matter which forum non conveniens analysis is applicable in a given situation,
to gain dismissal it is always the defendant-movant who must show a sufficient
burden visited by the plaintiff’s choice of Delaware as the forum in which to bring
20
Id. ¶¶ 5–6, 17.
21
Id. ¶ 17.
22
Compl. ¶¶ 15–17.
23
D.I. 59.
24
Compl. ¶ 15.
25
See Aranda v. Philip Morris USA Inc., 183 A.3d 1245, 1250–51 (Del. 2018) (describing
Delaware’s different forum non conveniens analyses).
-6-
suit. Ordinarily, at the motion to dismiss stage, the Court must accept as true all of
a plaintiff’s well-pleaded facts and draw all reasonable inferences in its favor.26 But
on a motion to dismiss an action for forum non conveniens, this Court exercises its
sound discretion when making findings of fact and drawing conclusions therefrom
based on that supported by the record; the Court must, when doing so, use an orderly
and logical deductive process.27
III. PARTIES’ CONTENTIONS
CVS begins by addressing the standard under which its motion should be
scrutinized. According to CVS, the Delaware Action and the Rhode Island Action
should be treated as “contemporaneously filed” because they were filed within “the
same general time frame”—thus, “neither action commands the high ground which
would otherwise force the court to approach the [forum non conveniens] analysis in
a manner which defers to a plaintiff’s choice of forum.”28 The Insurers argue the
Delaware Action should be treated as the first-filed action because there was no “race
26
E.g. Olenik v. Lodzinski, 208 A.3d 704, 714 (Del. 2019) (applying this rule where dismissal
was sought and granted because the contested transaction was subject to business judgment
review); Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 27 A.3d 531, 535
(Del. 2011) (applying this rule when reversing dismissal that was granted because of purportedly
duplicative claims); Clinton v. Enter. Rent-A-Car Co., 977 A.2d 892, 895 (Del. 2009) (applying
this rule where dismissal was granted under this Court’s Civil Rule 12(b)(6)).
27
Williams Gas Supply Co. v. Apache Corp., 594 A.2d 34, 37 (Del. 1991).
28
See CVS’s Mot. to Dismiss at 9–10 (internal citations omitted).
-7-
to the courtroom” between them and CVS. And so, they say the Motion should be
assessed under the “overwhelming hardship” standard.29
The parties next turn to applying the six Cryo-Maid factors30 to the facts of
this dispute. The parties’ contentions as to each factor will be examined in more
detail below. Predictably, however, CVS argues each and every factor supports
litigating this dispute in Rhode Island.31 Conversely, the Insurers claim CVS fails
to establish, under any factor, that it would face overwhelming hardship if the dispute
were to remain in Delaware.32
More generally, the parties dispute the Insurer’s reasons for filing the
Delaware Action in the first instance. According to CVS, Chubb filed the first
action (and the AIG Insurers followed) in response to the Delaware Supreme Court’s
January 10, 2022 decision in Ace American Insurance Company v. Rite Aid
Corporation.33 The question in that case was whether insurance policies covering
lawsuits “for” or “because of” personal injury require insurers to defend their
insureds when the plaintiffs in the underlying suits expressly disavow claims for
29
See Chubb’s Answering Br. at 11–16 (D.I. 152).
30
Gen. Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681 (Del. Ch. 1964), overruled in part on
other grounds, Pepsico, Inc. v. Pepsi-Cola Bottling Co. of Asbury Park, 261 A.2d 520 (Del. 1969).
31
CVS’s Mot. to Dismiss at 11.
32
Chubb’s Answering Br. at 22–23.
33
See 270 A.3d 239 (Del. 2022).
-8-
personal injury and seek only their own economic damages.34 The Supreme Court
held that because “the plaintiffs, governmental entities, sought to recover only their
own economic damages, specifically disclaiming recovery for personal injury or any
specific treatment damages . . . the carriers did not have a duty to defend Rite Aid
under the governing insurance policy.”35 CVS claims that the Insurers “apparently
conclude[ed] that Rite Aid set a favorable precedent for it in Delaware”36 and thus
filed suit here in act of “forum shopping.”37 As explained below, CVS posit that the
Insurers’ alleged forum shopping weighs in favor of dismissing or staying the
Delaware Action. In response, the Insurers argue that CVS’s accusations do not alter
its burden of showing overwhelming hardship and that, in any case, CVS is
attempting to engage in forum shopping itself by avoiding litigating this dispute in
Delaware. 38
34
Id. at 241.
35
Id.
36
CVS’s Mot. to Dismiss at 2.
37
Id. at 3.
38
Chubb’s Answering Br. at 19–22.
-9-
IV. ANALYSIS
Because the “overwhelming hardship” standard governs the Motion and CVS
fails to meet that standard, its Motion to Dismiss or Stay must be DENIED.
A. THE “OVERWHELMING HARDSHIP” STANDARD APPLIES.
When determining whether a suit should be stayed or dismissed for forum non
conveniens, Delaware courts apply different standards depending on the
circumstances.39 When a Delaware case is the first action filed, relief via forum non
conveniens is available only in the face of overwhelming hardship from Delaware
litigation.40 But “[w]hen two cases are filed at approximately the same time,
Delaware courts will weigh an application for a stay ‘under the traditional forum non
conveniens framework’ without ‘preference for one action over the other’ to avoid
rewarding the victor in a ‘race to the courthouse.’”41 “In such cases, the reviewing
court neutrally compares hardships imposed on each party by the adverse party’s
chosen forum, and stays the Delaware action if the foreign proceeding is less
39
SS&C Techs. Holdings, Inc. v. Endurance Assurance Corp., 2020 WL 6335898, at *4 (Del.
Super. Ct. Oct. 29, 2020) (internal citations omitted).
40
GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 234 A.3d 1186, 1194 (Del. Super. Ct. 2020),
aff’d, appeal dismissed, 253 A.3d 93 (Del. 2021).
41
Id. at 1195 (quoting In re Citigroup Inc. S’holder Derivative Litig., 964 A.2d 106, 116 (Del.
Ch. 2009)).
-10-
burdensome overall.”42 Thus, the Court must determine “the strength of the
presumptions applied” under the forum non conveniens analysis.43
CVS argues the Delaware Action and Rhode Island Action should be deemed
contemporaneously filed because they were filed within the “same general time
frame”—only ten days apart.44 But the temporal proximity between the filings isn’t
dispositive. The reason that Delaware courts generally “consider[] matters filed
within a couple days to be filed contemporaneously” is “to avoid rewarding a party
merely for winning a race to the courthouse.”45 But if there was no race, the rationale
for applying this rule abates.
The Court of Chancery’s decision in Dura Pharmaceuticals is instructive.46
Scandipharm, Inc. sued Dura, Inc. in Alabama, alleging Dura wrongfully terminated
their merger agreement. Dura promptly filed a competing action against
Scandipharm in Delaware. Scandipharm moved to dismiss the Delaware action
under forum non conveniens. In opposition, Dura argued the two actions had been
42
Id. (citing National Union Fire Ins. Co. of Pittsburgh, PA v. Axiall Corp., 2019 WL 4303388,
at *4 (Del. Super. Ct. Sept. 11, 2019)).
43
See GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 253 A.3d 93, 100–01 (Del. 2021) (internal
citations omitted).
44
See CVS’s Mot. to Dismiss at 9–10.
45
Nokia Sols. & Networks Oy v. Collision Commc’ns, Inc., 2020 WL 2095829, at *4 (Del. Super.
Ct. Apr. 30, 2020) (internal citations omitted); see also Cnty. of York Emps. Ret. Plan v. Merrill
Lynch & Co., 2008 WL 4824053, at *3 (Del. Ch. Oct. 28, 2008) (“Actions filed close in time to
each other are considered simultaneously filed in order to avoid encouraging a ‘race to the
courthouse.’”).
46
Dura Pharms., Inc. v. Scandipharm, Inc., 713 A.2d 925 (Del. Ch. 1998).
-11-
filed so closely together in time that they should be treated as contemporaneous.47
The court disagreed:
There was no “race to the courthouse” following the expiration of a
standstill agreement. On the contrary, both parties had been free to file
suit for several weeks. While there is a suggestion that Dura was also
in the process of preparing suit papers when it learned of Scandipharm’s
complaint, Dura “was shocked by the filing of litigation in Alabama”
and made its decision to file suit in reaction to, rather than
independently of, news of that filing. The fact that the two complaints
were filed within one business day of one another is not an indication
of independent decisionmaking, as in Cyrix, but merely a testament to
Dura’s alacrity in responding to Scandipharm’s choice of Alabama as
the forum for this litigation. Neither Cyrix nor the other cases cited by
Dura suggest that, in the absence of other, special circumstances, a
second-filed, reactive Delaware action will succeed in ousting a foreign
plaintiff of its choice of forum simply by the speed with which it is
filed. Indeed, such a rule would undermine the very considerations of
comity and efficiency on which the general rule of McWane is based,
by encouraging a “race” to file responsive or reactive complaints.48
Here, the material facts are very similar to those of Dura Pharmaceuticals.
Like Dura, CVS effectively admitted there was no race to the courthouse—CVS says
the Insurers “surprised CVS with this action” by filing “without warning or
provocation.”49 Similarly, CVS filed the Rhode Island Action solely as a reaction to
the Delaware Action, rather than as an act of independent decisionmaking.50 Finally,
47
Id. at 928.
48
Id. at 929 (emphasis in original) (internal citations omitted).
49
CVS’s Mot. to Dismiss at 2.
50
See id. at 9 (“Chubb sued on February 4, 2022, and served CVS on February 11, 2022. CVS
first learned of this action on February 7, 2022. On February 14, 2022, five business days after
-12-
CVS and the Insurers had been free to file an action concerning their coverage
dispute at any time. CVS began tendering the Opioid Lawsuits to Chubb in 2017,
to which Chubb responded with “numerous coverage position letters[] reserving its
right to deny coverage.”51 The coverage dispute began to ripen by at least 2021,
when CVS was found liable in connection with several Opioid Lawsuits. 52 Even
then, no party appeared to be in any rush to adjudicate their coverage rights or
obligations. Because there was no race to the courthouse between CVS and the
Insurers, there is no reason to treat the Rhode Island and Delaware Actions as
contemporaneously filed.53
CVS attempts to concoct a race to the courthouse by accusing the Insurers of
filing the Delaware Action in response to the Delaware Supreme Court’s Rite Aid
decision. According to CVS, it is “well-settled Delaware law that when, as here,
two lawsuits are filed close in time and there is a ‘hint of jockeying for position,’ the
first-filed lawsuit will not be afforded presumptive priority.”54 If any such “rule”
does indeed exist, it doesn’t apply here.
CVS learned of this action and the next business day after Chubb served it, CVS filed the Rhode
Island Action.”).
51
See Compl. at ¶¶ 41–43.
52
Id. ¶¶ 39–40.
53
Compare Nokia Sols. & Networks Oy, 2020 WL 2095829, at *5 (declining to extend deference
to a Delaware action where the filing party “plainly engaged in a race to the courthouse”).
54
CVS’s Reply Br. at 8 (quoting Air Prods. & Chem., Inc. v. Lummos Co., 252 A.2d 545, 547
(Del. Ch. 1968), rev’d, 252 A.3d 543 (Del. 1969)).
-13-
CVS draws the “jockeying for position” language from Air Products &
Chemicals, Inc. v. Lummos Co.55 In that case, one party “was preparing” to file suit
in Puerto Rico “in order to take advantage of a fifteen year statute of limitations” for
its claims in that jurisdiction.56 The opposing party attempted to preempt that
“imminent suit” by filing a declaratory judgment action in Delaware, where the
applicable statute of limitations was shorter and could have barred certain claims
against it.57 Thus, the “jockeying for position” in Lummos referred to the fact that
one party was attempting to “effectively block[]” an imminent lawsuit by exploiting
an unearned procedural advantage.58 That’s not what’s happened here. The Insurers
did not “jockey for position” by filing the Delaware Action because there was
nothing imminent to initiate some race to the courthouse between them and CVS.
Nor does it appear that the Insurers filed in Delaware to obtain any procedural
advantage that could wholly foreclose CVS from a decision on the merits of its
potential claims.
Similar considerations distinguish this dispute from E-Birchtree, LLC v.
Enterprise Products Operating L.P., another case on which CVS relies.59 In that
55
Lummos, 252 A.2d at 547.
56
See id. at 546–47.
57
Id. at 546.
58
Id.59
See CVS’s Mot. to Dismiss at 26 (citing E-Birchtree, LLC v. Enter. Prod. Operating L.P.,
2007 WL 914644 (Del. Super. Ct. Jan. 18, 2007)).
-14-
case, E-Birchtree, LLC filed a declaratory judgment action in Delaware relating to a
contract between itself and a company called Enterprise. E-Birchtree explained that
Enterprise had accused E-Birchtree of breaching the contract and sought declarations
that Enterprise’s “potential” breach-of-contract claims were time-barred under
Delaware’s statute of limitations.60 Two days later, Enterprise filed a breach-of-
contract action against E-Birchtree in Texas and moved to dismiss the Delaware
action.61 Quoting Lummos, this Court noted that the “use of a declaratory judgment
action to anticipate and soften the impact of an imminent suit elsewhere for the
purpose of gaining an affirmative judgment in a favorable forum requires a closer
look at the deference historically accorded a prior filed action.”62 And “[t]he obvious
advantage to E-Birchtree by filing in Delaware is the hoped-for application of
[Delaware’s] three-year statute of limitations, which would foreclose Enterprise’s
action on the merits.”63 Not so here. The Insurers didn’t file the Delaware Action to
preempt any imminent action by CVS or to gain any unfair advantage.
To the contrary, the only thing that CVS suggests as some act of forum
shopping is the Insurers’ “apparent[] conclu[sion] that Rite Aid set favorable
60
E-Birchtree, 2007 WL 914644, at *1.
61
Id. at *1–2.
62
Id. at *3 (internal citations omitted).
63
Id.
-15-
precedent for [them] in Delaware.”64 Assuming CVS were correct about the
Insurers’ strategic motivations, the filing of the Delaware Action would not
constitute the type of “shopping” that Delaware courts have disfavored. As the Court
of Chancery has explained:
It is a fact of life that a party’s choice of forum will more likely than
not be motivated by strategic considerations. What is pivotal is not the
litigant’s subjective motivation but the objective impact of its actions.
If “forum shopping” means filing an action in a location that the
plaintiff considers advantageous, then most plaintiffs in litigation
involving significant commercial disputes will be guilty of it. If such
behavior were considered inequitable, a stay would become virtually
automatic in most litigations involving large economic stakes.65
Although the decision to litigate in Delaware “will not be honored if it will inflict
inconvenience and hardship upon the opposing party[,]”66 the Court “cannot concern
itself with the plaintiffs’ ‘subjective motivation’ in bringing their claims to
Delaware.”67 “The Court’s focus is, and must be, vel non the defendants have
established that they will suffer overwhelming hardship by litigating . . . in
Delaware.”68
64
CVS’s Mot. to Dismiss at 2.
65
Williams Nat. Gas Co. v. Amoco Prod. Co., 1990 WL 13492, at *9 (Del. Ch. Feb. 15, 1990),
appeal dismissed, 577 A.2d 751 (Del. 1990); see also In re Asbestos Litig., 929 A.2d 373, 388
(Del. Super. Ct. 2006).
66
Williams, 1990 WL 13492, at *9.
67
In re Asbestos Litig., 929 A.2d at 388.
68
Id.-16-
B. CVS CANNOT ESTABLISH OVERWHELMING HARDSHIP
Where, as here, the Delaware case is the first action filed, relief via forum non
conveniens is available only in the face of overwhelming hardship from Delaware
litigation.69 This standard “is not intended to be preclusive[,]” but it “is intended as
a stringent standard that holds defendants who seek to deprive a plaintiff of [its]
chosen forum to an appropriately high burden.”70 Accordingly, the Court must
determine whether CVS “ha[s] shown that the forum non conveniens factors weigh
so overwhelmingly in [its] favor that dismissal of the Delaware litigation is required
to avoid undue hardship and inconvenience to [it].”71
The factors relevant to this analysis are the six set forth in Cryo-Maid.72 After
considering each factor in turn, the Court concludes that CVS has not established
that it would suffer overwhelming hardship litigating the Delaware Action in this
Court.
1. Relative ease of access to proof.
The first factor assesses “the relative ease of access of proof.”73 CVS argues
69
GXP Cap., 234 A.3d at 1194.
70
Martinez v. E.I. DuPont de Nemours & Co., 86 A.3d 1102, 1105 (Del. 2014) (internal citations
omitted).
71
Id. at 1106.
72
Gen. Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681 (Del. Ch. 1964), overruled in part on
other grounds, Pepsico, Inc. v. Pepsi-Cola Bottling Co. of Asbury Park, 261 A.2d 520 (Del. 1969);
see also Martinez, 86 A.3d at 1104.
73
Martinez, 86 A.3d at 1104.
-17-
this factor favors the Rhode Island Action because “[n]early all documents
comprising this case’s evidentiary record will be found in Rhode Island” and
relevant witnesses “will need to travel to Delaware” from Rhode Island.74 CVS does
not refer to any individual specifically, but rather refers generally to its own risk
management and insurance claims department employees.
This adds little heft to the claim of overwhelming hardship here. Even if most
of the CVS’s documents are physically located in Rhode Island, “modern methods
of information transfer render concerns about transmission of documents virtually
irrelevant.”75 Similarly, “mode[rn] methods of transportation lessen the Court’s
concern about the travel of witnesses who do not live in Delaware[.]”76 CVS has
not attempted to explain why such workarounds would be unavailable or
impracticable here. In short, CVS overstates the burden of obtaining the evidence
needed to prepare its defense in Delaware.77
2. Availability of compulsory process for witnesses.
Under the second factor, the Court must evaluate whether “another forum
would provide a substantial improvement as to the number of witnesses who would
74
CVS’s Mot. to Dismiss at 19–23.
75
Barrera v. Monsanto Co., 2016 WL 4938876, at *6 (Del. Super. Ct. Sept. 13, 2016) (internal
quotations and citations omitted).
76
Id. (internal quotations and citations omitted).
77
Id.-18-
be subject to compulsory process.”78 CVS says this factor weighs in its favor
because “CVS knows of no potential witnesses in Delaware, and anticipates the
Insurers will not identify any. On the other hand, many witnesses would be subject
to compulsory process in Rhode Island, including those who are or have been
responsible for CVS’s risk management, insurance, and legal functions and various
insurance brokers.”79
But CVS make no real attempt to identify any witnesses that could be called
in Rhode Island but not in Delaware, making its assertion that Rhode Island will “be
able to compel many more witnesses than Delaware”80 entirely conclusory. “[B]are
allegations that litigating in Delaware may be less convenient than litigating
[elsewhere]” are insufficient; instead, there must be a “particularized showing that
witnesses, documents, or other evidence . . . cannot be brought to or otherwise
produced in Delaware.”81 When a defendant does “not name the witnesses it deem[s]
necessary to call . . . or explain why their testimony could not be presented in
78
Mt. Hawley Ins. Co. v. Jenny Craig, Inc., 668 A.2d 763, 769 (Del. Super. Ct. 1995). See, e.g.,
Aveta, Inc. v. Colon, 942 A.2d 603, 611–13 (Del. Ch. 2008) (concluding that the movant “has not
established that he would face overwhelming hardship by having to transmit the necessary
documentary evidence to Delaware[,]” but “would face an overwhelming hardship if forced to
absorb the considerable expense of flying his numerous witnesses from Puerto Rico to Delaware
and boarding them here.”).
79
CVS’s Mot. to Dismiss at 23.
80
Id.81
Mar-Land Indus. Contractors, Inc. v. Caribbean Petroleum Ref., L.P., 777 A.2d 774, 781 (Del.
2001).
-19-
Delaware by deposition . . . [i]t follows that the defendant fail[s] to sustain its burden
of proof in this regard.”82
CVS’s position is further weakened by the reality that the witnesses in any
insurance dispute will mostly be employees of the parties—i.e. witnesses who
“generally do not require compulsory process to obtain their appearance.”83 The
second Cryo-Maid factor, like the first, does not support dismissing or staying the
Delaware Action.
3. Possibility to view the premises.
The parties agree this factor carries no weight in the current dispute and need
not be discussed.84
4. Applicability of Delaware law.
The fourth factor assesses “whether the controversy is dependent upon the
application of Delaware law which the courts of this State more properly should
decide than those of another jurisdiction.”85 An “implicit and logical corollary” to
this factor is that Delaware courts “must acknowledge that important and novel
issues of other sovereigns are best determined by their courts where practicable.”86
82
States Marine Lines v. Domingo, 269 A.2d 223, 226 (Del. 1970).
83
Rosen v. Wind River Sys., Inc., 2009 WL 1856460, at *6 (Del. Ch. June 26, 2009).
84
See CVS’s Mot. to Dismiss at 28; Chubb’s Answering Br. at 23 n.5.
85
Martinez, 86 A.3d at 1104.
86
See id. at 1109–10.
-20-
CVS argues at length that Rhode Island law governs this dispute, while the
Insurers say the Court need not choose between Rhode Island and Delaware law
because they are not in conflict. Too, the Insurers suggest CVS would suffer no
hardship even if this Court were required to apply Rhode Island law. The Insurers
are correct on both points.
a. No true conflict between Delaware and Rhode Island law.
The first step in a conflict-of-law analysis is to decide whether a conflict truly
exists, comparing “the competing jurisdictions to determine whether the laws
actually conflict on a relevant point.”87 “‘In determining whether there is an actual
conflict, Delaware state courts . . . answer a single and simple inquiry: does
application of the competing laws yield the same result?’”88 “If the answer is yes,
then ‘the Court should avoid the choice-of-law analysis altogether.’”89
Here, the answer is “yes.” The result of an insurance coverage dispute will
depend primarily upon the Court’s interpretation of the coverage terms and
exclusions contained in the relevant insurance policies. CVS and the Insurers appear
to agree that Rhode Island and Delaware follow substantially identical rules for
87
Arch Ins. Co. v. Murdock, 2018 WL 1129110, at *8 (Del. Super. Ct. Mar. 1, 2018), aff’d sub.
nom., RSUI Indem. Co. v. Murdock, 248 A.3d 887 (Del. 2021).
88
Id. (quoting Laugelle v. Bell Helicopter Textron, Inc., 2013 WL 5460164, at *2 (Del. Super.
Ct. Oct. 1, 2013)).
89
Id. (quoting Vichi v. Koninklijke Philips Elec., N.V., 85 A.3d 725, 773 (Del. Ch. 2014)).
-21-
contract interpretation, including insurance contracts.90 Thus, the Court would likely
reach the same conclusion on the parties’ rights and obligations were it to apply
either Delaware or Rhode Island law. This conclusion is consistent with Rite Aid,
where the Delaware Supreme Court held there was no conflict between Delaware
and Pennsylvania in an insurance coverage dispute because both states follow the
same rules when interpreting insurance contracts.91
That said, CVS claims that Rhode Island and Delaware conflict as to remedies.
For instance, CVS notes that Rhode Island, unlike Delaware, provides a private right
of action by statute when an insurer denies coverage in bad faith.92 The Rhode Island
statute authorizes the recovery of reasonable attorney’s fees for an insurer’s bad
faith.93 True, Delaware has no equivalent statute. But, in the right instance, a
Delaware trial court may award attorney’s fees to prevailing parties when the losing
party acted in bad faith—even absent some applicable contractual or statutory
provision.94
90
See CVS’s Mot. to Dismiss at 14 (acknowledging the states’ “laws of insurance policy
interpretation are similar”).
91
See Rite Aid, 270 A.3d at 244–46 (Del. 2022).
92
See 9 R.I. GEN. LAWS § 9-1-33 (West 2005), preempted by Desrosiers v. Hartford Life and
Acc. Ins. Co., 354 F. Supp. 2d 119 (D.R.I. 2005).
93
Id.94
E.g., E.I. du Pont de Nemours & Co. v. Medtronic Vascular, Inc., 2013 WL 1792824, at *2
(Del. Super. Ct. Apr. 24, 2013).
-22-
Citing cases addressing far different insurance coverage circumstances—i.e.
an automobile insurer’s denial of underinsured motorist benefits to its own injured
insured95—CVS also alludes to the potential availability of punitive damages in
Rhode Island. CVS follows that the states “diverge” on their “bad-faith doctrines.”96
The Court views with great skepticism CVS’s postulation that bad-faith remedies
would be available in an insurance coverage dispute like this in either state. But if
so, and if at this point this granularity matters at all, Rhode Island and Delaware do
not diverge to nearly the degree CVS protests.97 In other words, as best the Court
can discern, there appears no real conflict between Delaware and Rhode Island law
regarding either liability or damages in the type of coverage dispute here.
95
See Skaling v. Aetna Ins. Co., 799 A.2d 997, 1016 (R.I. 2002); Bibeault v. Hanover Ins. Co.,
417 A.2d 313, 319 (R.I. 1980).
96
CVS’s Mot. to Dismiss at 14. According to CVS, in Rhode Island, “punitive damages are
available as a matter of right in bad faith cases,” even without a showing of “willful or wanton
conduct.” See Skaling, 799 A.2d 997 at 1016. Conversely, CVS says, Delaware conditions the
recovery of punitive damages on proof that the insurer denied coverage with a higher degree of
fault. See E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 446 (Del. 1996).
97
The Rhode Island Supreme Court has held that to prove bad faith—as one must to recover
punitive damages—“a plaintiff must show the absence of a reasonable basis for denying benefits
of the policy and the defendant’s knowledge or reckless disregard of the lack of a reasonable basis
for denying the claim.” Skaling, 799 A.2d at 1004 (internal citations omitted). When available in
a particular coverage context, Delaware “has permitted punitive damages in the insurance ‘bad
faith’ context”—for example, “‘if the denial of coverage is willful or malicious . . . [and] when the
bad faith actions of an insurer are taken with a reckless indifference or malice toward the plight of
the injured employee [insured].’” E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 446
(Del. 1996) (quoting Pierce v. Int’l Ins. Co. of Ill., 671 A.2d 1361, 1367 (Del. 1996)).
-23-
A note on the Delaware Supreme Court’s Chemtura decision: it demands no
different decision in these circumstances. In Chemtura, the Supreme Court held that
New York law governed the interpretation of the “comprehensive, nationwide
insurance program” at issue in that case because New York had the most significant
relationship to the insurance contracts.98 In its analysis, the Court afforded
“particular” significance to the fact that New York was “the headquarters of the
insured at the outset of the insurance program.”99 CVS argues Chemtura supports
the application of Rhode Island law to the current dispute. But the Supreme Court
made clear that its holding was directed to the third step of the choice-of-law
analysis—a step that must be reached only if there is an actual conflict between the
laws of the competing states.100 Because no such conflict exists here, Chemtura is
inapplicable.101
98
See Certain Underwriters at Lloyds, London v. Chemtura Corp., 160 A.3d 457, 459–460 (Del.
2017).
99
Id.100
Id. at 464; see also Travelers Indem. Co. v. CNH Indus. Am., LLC, 2018 WL 3434562, at *4
(Del. July 16, 2018) (analyzing which state had the “most significant relationship” to the parties’
insurance policies only after determining an actual conflict existed between the competing states);
Sycamore Partners Mgmt., L.P. v. Endurance Am. Ins. Co., 2021 WL 761639, at *7 (Del. Super.
Ct. Feb. 26, 2021).
101
In its Motion, CVS also relies on RSUI Indem. Co. v. Murdock, 248 A.3d 887 (Del. 2021).
There again, the Court was effectively thrust to the third step of the choice-of-law analysis and
needed to determine which state had the most significant relationship to those parties’ directors’
and officers’ liability insurance policies. See id. at 895. So, RSUI is inapplicable here for the same
reason as Chemtura.
-24-
At this point, the Court need not choose between Delaware and Rhode Island
law because there simply appears no real conflict between them.102 So the fourth
Cryo-Maid factor does not weigh on the side of dismissal/stay of the Delaware
Action in favor of the Rhode Island Action.
b. Even if Rhode Island law applied, CVS hasn’t shown “overwhelming
hardship.”
CVS has not shown this factor favors the Rhode Island Action, even if it were
assumed the Court must apply Rhode Island law. As the Delaware Supreme Court
has explained:
This factor, like the other Cryo-Maid factors, would support dismissing
a first-filed Delaware action only if it created overwhelming hardship.
It does not. Delaware courts often decide legal issues—even unsettled
ones—under the law of other jurisdictions. Accordingly, this Court has
held that “[t]he application of foreign law is not sufficient reason to
warrant dismissal under the doctrine of forum non conveniens.”103
CVS has not explained how it would be subjected to overwhelming hardship if this
Court were to apply Rhode Island law. CVS instead blithely claims this action
implicates “open questions of Rhode Island insurance law” that are better decided
by Rhode Island courts.104 Our Supreme Court has made clear that’s not enough
102
See Deuley v. DynCorp Int’l, Inc., 8 A.3d 1156, 1161 (Del. 2010) (avoiding choice-of-law
analysis because the conflict was “false” and the result under the competing laws would be the
same).
103
Berger v. Intelident Sols., Inc., 906 A.2d 134, 137 (Del. 2006) (internal citations omitted).
104
CVS’s Mot. to Dismiss at 18.
-25-
under the forum non conveniens analysis. Again, this factor does not favor
dismissing or staying the Delaware Action.
5. Pendency of a similar action in another jurisdiction.
The fifth factor assesses the “pendency or nonpendency of a similar action or
actions in another jurisdiction.”105 Its application here is straightforward.
To borrow the Court of Chancery’s words:
There is a similar action pending in another jurisdiction, with [CVS]
having filed a mirror image declaratory judgment action in [Rhode
Island] . . . [shortly] after [the Insurers] filed this action. The pendency
of the [Rhode Island] Action, however, cannot be said to cause
overwhelming hardship to [CVS] by requiring it to litigate in two
forums. This ‘problem’ is of [CVS’s] own making, as it filed [Rhode
Island] Action after it knew it faced litigation in Delaware.106
Or as our Supreme Court has said: “The parties face wasteful duplication of effort
and risk inconsistent adjudications only because [CVS] is pursuing its later-filed
[Rhode Island] action. If [CVS] were to dismiss its [Rhode Island] action, this
hardship would disappear.”107
Nevertheless, CVS insists this Court should defer to the Rhode Island Action
because, as plaintiff there, it seeks a “more comprehensive declaratory judgment on
105
Martinez, 86 A.3d at 1104.
106
Petroplast Petrofisa Plasticos S.A. v. Ameron Int’l Corp., 2009 WL 3465984, at *6 (Del. Ch.
Oct. 28, 2009).
107
Chrysler First Bus. Credit Corp. v. 1500 Locust Ltd. P’ship, 669 A.2d 104, 107–08 (Del.
1995).
-26-
the parties’ rights and obligations under the Policies” and “also asserts causes of
action for breach of contract and bad faith under Rhode Island law.”108 Additionally,
CVS again suggests the Insurers’ furtive “forum shopping” weighs in favor of
dismissing the Delaware Action because CVS is the “natural plaintiff” in this
dispute.109 CVS’s arguments fail in several ways.
First, the Rhode Island Action is not more “comprehensive” than the
Delaware Action. CVS brought four causes of action in the Rhode Island Action:
(1) breach of contract, alleging the insurers breached the insurance policies by
“unreasonably stating that there is no coverage for the Opioid Lawsuits;” (2) breach
of the implied covenant of good faith and fair dealing, alleging the insurers denied
coverage in bad faith; (3) statutory bad faith, again premised on the denial of
coverage; and (4) declaratory judgment that CVS’s coverage position is correct.110
Thus, CVS’s claims in the Rhode Island Action are coterminous with those in the
Delaware Action. It is in every substantive feature a doppelgänger coverage dispute.
Both actions boil down to the same core issue: Are the Insurers obligated to cover
the Opioid Lawsuits? Neither Action will answer that more comprehensively than
the other.
108
See CVS’s Mot. to Dismiss at 25–26.
109
See id. at 26–27.
110
See CVS’s Mot. to Dismiss, Ex. A.
-27-
Second, CVS’s allegations of forum shopping again fall flat. CVS is correct
that “Delaware courts take a ‘rather dim view of declaratory judgment claims of non-
breach made for purposes of forum shopping.’”111 But, to reiterate, the Insurers can’t
be said to have impermissibly forum-shopped.
Third, CVS’s claim that it is the “natural plaintiff” in this dispute lacks
nuance. True, in Crosstex, this Court recognized that “the insured[] is in the role of
the natural plaintiff following a denial of coverage.”112 But Crosstex made note of
this fact in the context of holding that two competing actions had been filed
contemporaneously because the parties had engaged in a race to the courthouse.113
Because there was no race to the courthouse here, CVS’s status as the “natural
plaintiff” carries little independent significance. Similarly, although this Court noted
disapprovingly that the party filing the Delaware action in E-Birchtree—which had
nothing to do with insurance coverage—was not the “natural plaintiff” in the parties’
dispute, it did so in the context of that party’s obvious forum shopping.114
Like the previous factors, the fifth Cryo-Maid factor does not support
dismissing or staying the Delaware Action.
111
E-Birchtree, 2007 WL 914644, at *4 (quoting In re Delta and Pine Land Co. S’holders Litig.,
2000 WL 1010584, at *5 (Del. Ch. July 17, 2000)).
112
Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Crosstex Energy Servs., L.P., 2013 WL
6598736, at *5 (Del. Super. Ct. Dec. 13, 2013).
113
Id. at *5.
114
See E-Birchtree, 2007 WL 914644, at *3.
-28-
6. Other practical considerations.
The final factor assesses “all other practical problems that would make the
trial of the case easy, expeditious and inexpensive.”115 Under this factor, CVS
argues: (1) the “public interest” in this case favors a dismissal or stay because “there
are no contacts with [Delaware] other than the incorporation of a few of the parties;”
(2) granting CVS’s motion would promote judicial economy by eliminating
duplicative litigation; and (3) granting CVS’s motion would avoid the risk of
inconsistent judgments in different courts.116
The Court addressed the latter two arguments in the previous section. CVS
created duplicative litigation and the risk of inconsistent judgments by filing the
Rhode Island Action after being sued in Delaware. These are problems of CVS’s
own creation, and CVS could solve them simply by dismissing or seeking a stay of
its own reactive, later-filed Rhode Island Action.
More complicated is CVS’s argument relating to the public interest in this
case. CVS is correct: Delaware’s interest in this dispute is somewhat weaker than
in other circumstances. As this Court observed in GXP Capital:
Delaware has an interest in regulating the conduct of entities formed
under its laws [i.e., CVS], and this public interest can weigh against
granting forum non conveniens relief. But Delaware’s public interest
in providing a forum on the basis of incorporation is strongest in cases
115
Martinez, 86 A.3d at 1104.
116
See CVS’s Mot. to Dismiss at 28–34.
-29-
where issues of substantive corporate governance and structure are
implicated. And this general—but important—interest in providing a
forum for resolving disputes involving its corporate citizens can be
outweighed by the hardship occasioned from the other factors visited
on those who appear to have been brought here for vexatious, harassing,
or oppressive purposes.117
This dispute doesn’t implicate any issues of substantive corporate governance and
structure. And its strongest connection to Delaware appears to be CVS’s
incorporation here. Nevertheless, “the practical consideration that the only
connection to Delaware is that the parties are incorporated here does not rise to the
level of overwhelming hardship required for a motion to dismiss on forum non
conveniens grounds.”118 To the contrary, the Delaware Supreme Court has held that
“‘the traditional showing a defendant must make in order to prevail on a motion to
dismiss on the ground of forum non conveniens’ is not varied where a dispute’s only
connection to Delaware is the fact that the defendant is a Delaware entity.”119
Furthermore, Rhode Island cannot be said to have a greater interest in this case
than Delaware. Because this dispute does not perforce call for the application of
Rhode Island law, Rhode Island’s connection to this insurance dispute is the fact that
117
GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 234 A.3d 1186, 1198 (Del. Super. Ct. 2020),
aff’d, appeal dismissed, 253 A.3d 93 (Del. 2021).
118
Royal Indem. Co. v. Gen. Motors Corp., 2005 WL 1952933, at *11 (Del. Super. Ct. July 26,
2005).
119
Mar-Land Indus. Contractors, Inc. v. Caribbean Petroleum Ref., L.P., 777 A.2d 774, 780
(Del. 2001) (internal citation omitted).
-30-
CVS maintains its corporate headquarters there.120 In this context, Delaware’s
interest in offering a “neutral forum to adjudicate commercial disputes against
Delaware entities”121—like CVS—arguably provides Delaware as great an interest
in this dispute as any other state can readily claim.
V. CONCLUSION
To prevail on its Motion to Dismiss or Stay, CVS “must meet the high burden
of showing that the traditional forum non conveniens factors weigh so heavily that
[CVS] will face ‘overwhelming hardship’ if th[is] lawsuit proceeds in Delaware.”122
Because CVS has not met its burden under any of those factors, its Motion is
DENIED.
IT IS SO ORDERED.
_________________________
Paul R. Wallace, Judge
Original to Prothonotary
cc: All Counsel via File & Serve
120
Compare Royal Indem. Co., 2005 WL 1952933, at *11 (“However, the fact that this case will
ultimately be decided, presumably, under Michigan or New York law and not upon Delaware law,
does favor a stay.”).
121
See Candlewood Timber Grp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 1000 (Del. 2004).
122
See Martinez, 86 A.3d at 1104 (internal citations omitted).
-31-