Arrowood Indemnity Company v. AmerisourceBergen Corporation

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ARROWOOD INDEMNITY
COMPANY,
C.A. No. N22C-01-182 AML
Plaintiff, (CCLD)
v.
AMERISOURCEBERGEN
CORPORATION AND
AMERISOURCEBERGEN DRUG
CORPORATION, et al.
Defendants.
NATIONAL UNION FIRE
INSURANCE COMPANY OF C.A. No. N22C-01-109 AML
PITTSBURGH, PA, (CCLD)
Plaintiff,
v.
AMERISOURCEBERGEN
CORPORATION, et al.
Defendants.
AMERICAN ALTERNATIVE
INSURANCE CORPORATION, et al. C.A. No. N22C-02-046 AML
(CCLD)
Plaintiffs,
v.
AMERISOURCEBERGEN
CORPORATION, et al.
Defendants.
XL INSURANCE AMERICA, INC.,
C.A. No. N22C-02-084 AML
Plaintiff, (CCLD)
v.
AMERISOURCEBERGEN
CORPORATION, et al.
Defendants.
HARTFORD CASUALTY
INSURANCE COMPANY, et al. C.A. No. N22C-02-099 AML
(CCLD)
Plaintiffs,
v.
AMERISOURCEBERGEN
CORPORATION, et al.
Defendants.
Peter B. Ladig, Esquire, Elizabeth A. Powers, Esquire, BAYARD, P.A.,
Wilmington, Delaware, Kevin T. Coughlin, Esquire, Suzanne C. Midlige, Esquire,
Patrick K. Coughlin, Esquire, COUGHLIN MIDLIGE & GARLAND LLP,
Morristown, New Jersey; Attorneys for Plaintiff Arrowood Indemnity Company.
Robert J. Katzenstein, Esquire Julie M. O’Dell, Esquire, SMITH, KATZENSTEIN
& JENKINS LLP, Wilmington, Delaware, Christopher J. St. Jeanos, Esquire
WILLKIE FARR & GALLAGHER LLP, New York, New York; Attorneys for
Plaintiff National Union.
Carmella P. Keener, Esquire, COOCH AND TAYLOR, P.A., Wilmington,
Delaware, Adam H. Fleischer, Esquire, Patrick Bedell, Esquire, Kevin F. Harris,
Esquire, BATESCAREY LLP, Chicago, Illinois; Attorneys for Plaintiff American
Alternative.
Erin R. Fay, Esquire, Gabriel B. Ragsdale, Esquire, BAYARD, P.A., Wilmington,
Delaware, James P. Ruggeri, Esquire, Edward B. Parks, II, Esquire, RUGGERI
PARKS WEINBERG LLP, Washington, District of Columbia; Attorneys for
Plaintiffs Hartford Insurance.
Kathleen M. Miller, Esquire, Julie M. O’Dell, Esquire, SMITH, KATZENSTEIN &
JENKINS LLP, Wilmington, Delaware, Kathryn Guinn, Esquire, DENTONS US
LLP, Denver, Colorado, Deborah J. Campbell, Esquire, DENTONS US LLP, St.
Louis, Missouri, Keith Moskowitz, Esquire, John Grossbart, Esquire, DENTONS
US LLP, Chicago, Illinois; Attorneys for Plaintiff XL Insurance America
Garrett Moritz, Esquire, Richard Garrett Rice, Esquire, ROSS ARONSTAM &
MORITZ LLP, Wilmington, Delaware; Attorneys for Plaintiffs ACE American
Insurance Company, ACE Property and Casualty Insurance Company.
Brian M. Rostocki, Esquire, Anne M. Steadman, Esquire, REED SMITH, LLP,
Wilmington, Delaware, Courtney C.T. Horrigan, Esquire Reed Smith LLP,
Pittsburgh, Pennsylvania; Attorneys for Defendants AmerisourceBergen
Corporation, AmerisourceBergen Drug Corporation, and MWI Veterinary Supply,
Inc.
Submitted: March 9, 2023
Decided: March 30, 2023
MEMORANDUM OPINION
Upon Defendants’ Motions to Dismiss or Stay Duplicative Litigation:
DENIED
LEGROW, J.
The plaintiffs in these actions are insurers who issued commercial general
liability policies to one or more of the defendants, which are a prescription opioid
distributor and its predecessor entities. The distributor and its predecessors have
been named as defendants in thousands of lawsuits for their respective roles in
allegedly exacerbating the opioid epidemic in the United States. Many of these
lawsuits were initiated by state, municipal, and local government entities and seek
legal and equitable relief to offset government and health care expenditures that
resulted from the national opioid epidemic. The distributor seeks defense costs and
indemnification from the insurers.
There is a complex history of litigation between these parties. First, the
distributor filed an action in West Virginia seeking declarations regarding various
insurance companies’ obligations, if any, to cover the distributor’s defense costs and
potential liability in the opioid lawsuits. The West Virginia court bifurcated that
coverage case to resolve insurance coverage issues common among the policies in
that case. The West Virginia court also entered a tailored anti-suit injunction relating
to the parties and policies at issue there. That case is ongoing, but none of the
insurers in these Delaware actions are parties in West Virginia.
After the West Virginia coverage action was filed, certain insurers filed an
action in California against the distributor and sought declarations that they have no
duty to defend or indemnify the distributor for its liability in the opioid lawsuits.
1
That case also involves crossclaims between various insurers regarding the extent of
their respective potential liability. The California court stayed that action as to the
insurers who are parties to the West Virginia action. The California court also issued
a tentative ruling that it lacked jurisdiction over the distributor and its affiliates. The
remaining insurers have now voluntarily dismissed all their claims in California
without prejudice.
Between the time the California court issued its stay and the time the insurers
dismissed their claims in California, the insurers filed five actions in this Court.
Each case has been brought by an insurer and is against the distributor or related
entities. The insurers seek declarations that they have no duty to defend or indemnify
the distributor or any of its entities for the opioid lawsuits. Some insurers also seek
declarations limiting the scope of their respective potential duties to defend or
indemnify.
The distributor moved to dismiss or stay these five actions based on forum
non conveniens. The distributor contends these cases should be dismissed or stayed
because the Delaware actions are “later filed,” and earlier actions remain pending in
other jurisdictions. The insurers oppose these motions and urge the Court to allow
the Delaware actions to proceed. At this point, there are no other “pending cases”
involving these insurers, and an analysis of the forum non conveniens factors
otherwise weighs in favor of proceeding in Delaware. For those reasons, as
2
explained further below, the Court denies the distributor’s motions to dismiss or stay
these actions.
FACTUAL BACKGROUND
A. Defendant Entities and the Opioid Lawsuits
In 1977, Alco Standard Corporation acquired Drug House, a pharmaceutical
wholesaler that operated in Pennsylvania and Delaware.1 In 1979, Alco Standard
acquired Kauffman-Lattimer, an Ohio-based company, to expand Alco Standard’s
distribution market.2 In 1994, Alco Health Services, an Alco Standard subsidiary,
changed its name to Amerisource Health.3 Around 2001, Amerisource Health
merged with Bergen Brunswig, another pharmaceutical distributor, to form
AmerisourceBergen.4
Defendants AmerisourceBergen Corporation (“ABC”) and
AmerisourceBergen Drug Corporation (“ABDC”) (collectively,
“AmerisourceBergen” or “Defendants”) are both Delaware corporations with their
principal places of business in Pennsylvania.5 AmerisourceBergen has been named
as a defendant in several thousand lawsuits across the country relating to
Defendants’ distribution of prescription opioids.6 These lawsuits were brought by
1
Arrowood Amended Complaint (“Arrowood Am. Compl.”) ¶ 27 (D.I. 3).
2
Id.
3
Id.
4
Id. ¶ 28.
5
Id. ¶¶ 12-13.
6
Id. ¶¶ 1, 29.
3
state and local government entities, Native American tribes, and others seeking
economic damages, injunctive relief, and other remedies against prescription opioid
manufacturers, drug distributors, and retail pharmacies for alleged harm resulting
from the opioid epidemic (the “Opioid Lawsuits”).7 The majority of the Opioid
Lawsuits are consolidated in the United States District Court for the Northern
District of Ohio, Eastern Division, in the multi-district litigation captioned In re
National Prescription Opiate Litigation, MDL No. 2804, Case No. 1:17-md-2804
(the “MDL Action”).8 Under the procedural framework established by the MDL
Action and other state courts, the Opioid Lawsuits are represented by “bellwether
complaints” that “act as indicators of the content and allegations of the broader class
of Opioid Lawsuits.”9
Some of the cases in the MDL Action are designated as “Track One” cases
(the “Track One Cases”).10 In the Track One Cases, the bellwether complaints allege
AmerisourceBergen violated its statutory duties under federal and state laws to
“monitor, detect, investigate, refuse to fill[,] and report suspicious orders of
prescription opioids.”11 These cases do not allege AmerisourceBergen is liable to
the plaintiffs for damages caused by bodily injury. Instead, they seek recovery for
7
Id. ¶ 1.
8
Id. ¶ 31; XL Insurance America Complaint (“XL Insurance Compl.”) ¶ 36 (D.I. 1).
9
Arrowood Am. Compl. ¶ 32.
10
Id.
11
Id. ¶ 35.
4
economic damages the plaintiffs expended to combat the opioid epidemic.12
AmerisourceBergen has settled some of the Opioid Lawsuits and is litigating
numerous others.13
B. The Pending Actions in this Court
There are five separate actions consolidated for purposes of considering and
resolving AmerisourceBergen’s current Motions to Dismiss or Stay Duplicative
Litigation Due to Improper Venue (collectively, the “Motions”).14 First, Arrowood
Indemnity Company (“Arrowood”) originally filed an action against ABC and
ABDC on January 26, 2022.15 On March 1, 2022, Arrowood filed its Amended
Complaint to add St. Paul Fire and Marine Insurance Company, St. Paul Mercury
Insurance Company, ACE American Insurance Company, and ACE Property and
Casualty Insurance Company as co-defendants (the “Additional Defendants”).16
Arrowood issued seven commercial general liability insurance policies to
Amerisource Health (the “Arrowood Policies”), each of which provided coverage
for one year from December 31, 1994, to December 31, 2001.17 AmerisourceBergen
12
Id. ¶¶ 6, 37. These cases also seek equitable relief to “abate the alleged ‘public nuisance’ created
by AmerisourceBergen and other opioid defendants.” See id. ¶ 6.
13
See, e.g., id. ¶¶ 43-46 (listing cases AmerisourceBergen has settled, with monetary settlements
projected in the multi-billion-dollar range).
14
See, e.g., Defendants’ Motion to Dismiss or Stay Duplicative Litigation Due to Improper Venue
(“Defs.’ Mot. to Dismiss Arrowood Action”) (D.I. 31). AmerisourceBergen filed similar Motions
for all five actions, which are discussed in more detail below.
15
See Arrowood Complaint (D.I. 1). This action is captioned as Arrowood Indem. Co. v.
AmerisourceBergen Corp., et al., C.A. No. N22C-01-182 AML (CCLD).
16
See Arrowood Am. Compl.
17
Id. ¶ 53 (listing each policy number).
5
has demanded coverage for the Opioid Lawsuits under the Arrowood Policies for
1996-2000.18 Arrowood seeks declarations from this Court that Arrowood has no
duty to defend or indemnify AmerisourceBergen under those policies.19 In the event
Arrowood is found to have a coverage obligation with respect to the Opioid
Lawsuits, Arrowood alleges the Additional Defendants likewise have coverage
obligations,20 and Arrowood seeks a declaration as to the scope and amount of
coverage to be provided by Arrowood and the Additional Defendants.21 It also seeks
declarations that relate to the Additional Defendants’ obligations to indemnify
Arrowood.22
Second, National Union Fire Insurance Company of Pittsburgh, PA
(“National Union”) filed an action against ABC and ABDC on January 17, 2022. 23
National Union issued three excess liability policies to Amerisource Health,
Amerisource Distribution Corporation, and other AmerisourceBergen predecessor
entities; these policies covered bodily injury that occurred between December 31,
1994, and December 31, 2000 (the “National Union Policies”).24 National Union
18
See id. ¶ 54.
19
See id. ¶¶ 58-65.
20
See id. ¶ 68.
21
See id. ¶¶ 66-69.
22
See id. ¶¶ 70-77.
23
See National Union Complaint (“National Union Compl.”) (D.I. 1). This action is captioned as
Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. AmerisourceBergen Corp., et al., C.A. No. N22C-
01-109 AML (CCLD).
24
See id. ¶ 2.
6
seeks declarations that it is not obligated to defend or indemnify AmerisourceBergen
in the Opioid Lawsuits under the National Union Policies.25
Third, American Alternative Insurance Corporation and North American
Capacity Insurance Company (collectively, “American Alternative”) filed an action
against ABC and ABDC on February 4, 2022.26 American Alternative Insurance
Company issued one policy to Bergen Brunswig Corporation, an ABC predecessor,
for the coverage period of May 1, 2000, to May 1, 2001 (the “American Alternative
Policy”).27 The American Alternative Policy is a “follow-form excess policy” that
provides coverage for bodily injuries that occurred while the policy was in effect. 28
North American Capacity Insurance Company issued seven insurance policies to
ABC for the period of May 1, 2013, to May 1, 2017 (the “North American Capacity
Policies”).29 The North American Capacity Policies cover damages due to bodily
injury that occurred during the policy period and that were caused by an accidental
occurrence.30 American Alternative seeks declarations that, inter alia, it is not
25
See id. ¶¶ 47-54.
26
American Alternative and North American Capacity Complaint (“American Alternative
Compl.”) (D.I. 1). This action is captioned as Am. Alt. Ins. Corp., and North Am. Capacity Ins.
Co. v. AmerisourceBergen Corp., et al., C.A. No. N22C-02-046 AML (CCLD).
27
Id. ¶ 9.
28
Id. ¶ 10.
29
Id. ¶ 11.
30
Id. ¶ 12.
7
obligated to defend or indemnify AmerisourceBergen in the Opioid Lawsuits under
either the American Alternative Policy or the North American Capacity Policies.31
Fourth, XL Insurance America, Inc. (“XL Insurance”) filed an action against
ABC and ABDC on February 9, 2022.32 XL Insurance issued five excess liability
insurance policies to ABC for the coverage period of May 1, 2013, to May 1, 2018
(the “XL Insurance Policies”).33 The XL Insurance Policies cover losses due to
bodily injury that took place during the policy periods.34 XL Insurance seeks
declarations that it is not obligated to defend or indemnify AmerisourceBergen in
connection with the Opioid Lawsuits under the XL Insurance Policies.35
Finally, Hartford Casualty Insurance Company, Hartford Fire Insurance
Company, Nutmeg Insurance Company, and Twin City Fire Insurance Company
(collectively, “Hartford Insurance” and together with Arrowood, National Union,
American Alternative, and XL Insurance, “Plaintiffs”) filed an action against ABC,
ABDC, and MWI Veterinary Supply, Inc. on February 11, 2022.36 Hartford
Insurance issued policies to Bellco Drug Corporation, Bergen Brunswig
31
See id. ¶¶ 57-87.
32
See XL Insurance Compl. This action is captioned as XL Ins. Am. Inc. v. Amerisource Bergen
Corp., et al., C.A. N22C-02-084 AML (CCLD).
33
See id. ¶ 12.
34
See id. ¶ 55.
35
See id. ¶¶ 62-69.
36
See Hartford Insurance Complaint (“Hartford Insurance Compl.”) (D.I. 1). This action is
captioned as Hartford Cas. Ins. Co. v. AmerisourceBergen Corp., et al., C.A. No. N22C-02-099
AML (CCLD).
8
Corporation, and MWI Veterinary Supply, Inc. for the coverage period of 1996 to
2007 (the “Hartford Insurance Policies”).37 The Hartford Insurance Policies provide
coverage for losses due to bodily injury that took place during the policy periods.38
Hartford Insurance seeks declarations that it has no obligation to defend or
indemnify AmerisourceBergen in connection with the Opioid Lawsuits under the
Hartford Insurance Policies.39
C. The West Virginia Attorney General Action and Other West Virginia
Actions
On June 26, 2012, the State of West Virginia, by its Attorney General, filed a
major opioid-related action against ABC and other prescription drug distributors (the
“WVAG Action”).40 The WVAG Action concerned the distribution of hydrocodone
and oxycodone in West Virginia between 2007 and 2012.41 The State of West
Virginia alleged ABC and others failed to provide effective controls and procedures
to guard against the diversion of controlled substances in violation of West Virginia
law.42 The West Virginia Attorney General alleged non-accidental conduct by ABC
37
See id. ¶ 2.
38
Id. ¶ 44.
39
See id. ¶¶ 46-57.
40
See National Union Compl. ¶ 21; American Alternative Compl. ¶ 27. The WVAG Action is
captioned as State of West Virginia v. AmerisourceBergen Drug Corporation, et al., C.A. No. 12-
C-141 (Circuit Court of Boone County West Virginia).
41
National Union Compl. ¶ 22.
42
Id.; see also American Alternative Compl. ¶ 27.
9
and sought remedies other than those related to damages for bodily injury. 43 On
December 2, 2016, AmerisourceBergen settled the WVAG Action for $16 million.44
After AmerisourceBergen settled the WVAG Action, certain West Virginia
cities and counties filed similar prescription opioid lawsuits in West Virginia. 45
Many are ongoing.46
D. The West Virginia Coverage Action
On March 16, 2017, ABDC filed a coverage action in West Virginia against
St. Paul Fire and Marine Insurance Company, ACE American Insurance Company,
ACE Property and Casualty Insurance Company, American Guarantee & Liability
Insurance Company, and Endurance American Insurance Company, seeking breach-
of-contract damages and a declaration of rights to defense and/or indemnification of
the WVAG Action and all other then-pending Opioid Lawsuits (the “West Virginia
Coverage Action”).47 On July 18, 2018, ABDC filed an amended complaint in the
43
National Union Compl. ¶ 22; XL Insurance Compl. ¶ 34.
44
XL Insurance Compl. ¶ 35; American Alternative Compl. ¶ 27; National Union Compl. ¶ 23.
45
Defs.’ Mot. to Dismiss Arrowood Action, Declaration of Courtney C.T. Horrigan (“Horrigan
Decl.”) ¶ 4 (D.I. 31). “Beginning in 2017, additional government entities, Native American Tribes,
third-party payors, and individuals filed prescription opioid lawsuits against one or more”
AmerisourceBergen entities. See id.
46
“As of April 14, 2022, approximately 3,436 prescription opioid lawsuits have been filed against
one or more” AmerisourceBergen entities. See id. ¶ 5.
47
See Mot. to Dismiss Arrowood Action at 8, Ex. B (displaying a copy of the complaint in the
West Virginia Coverage Action); see also Horrigan Decl. ¶ 8. “[T]he Court may take judicial
notice of publicly available facts that are not subject to reasonable dispute, such as the fact that
statements were made in filings in other courts.” See Nicholas v. Nat’l Union Fire Ins. Co. of
Pittsburgh, Pa., 2013 WL 1143514, at *3 (Del. Super. Mar. 19, 2013) (citing Wal-Mart Stores,
Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 n.28 (Del. 2004)), rev’d on other grounds, 83 A.3d
731 (Del. 2013); see also Nelson v. Emerson, 2008 WL 1961150, at *2 n.2 (Del. Ch. May 6, 2008)
10
West Virginia Coverage Action to list additional Opioid Lawsuits filed against it
since the original complaint was filed.48
The West Virginia court bifurcated the West Virginia Coverage Action into
two phases.49 That court also is employing the “bellwether” concept by first hearing
a test case to decide common contested issues.50 Phase I will evaluate coverage for
the WVAG Action under AmerisourceBergen’s standard form general liability
policies at issue in that action.51 AmerisourceBergen’s general liability policies in
the WVAG Action are comparable to AmerisourceBergen’s and its predecessor
entities’ other general liability insurance policies.52 There are several summary
judgment motions currently pending before the West Virginia court regarding policy
language and exclusions at issue in Phase I.53
E. The California Coverage Action
On November 5, 2020, St. Paul Fire and Marine Insurance Company, St. Paul
Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers
Property Casualty Company of America, and The Travelers Indemnity Company
(taking judicial notice of facts from “documents filed in related federal court proceedings” on a
motion to dismiss).
48
Defs.’ Mot. to Dismiss Arrowood Action at 9, Ex. C (displaying a copy of the amended
complaint).
49
Id. at 10; Horrigan Decl. ¶ 10.
50
Defs.’ Mot. to Dismiss Arrowood Action at 10; Horrigan Decl. ¶ 10.
51
Defs.’ Mot. to Dismiss Arrowood Action at 10, Ex. D (displaying a copy of the West Virginia
court’s order to bifurcate).
52
See id. at 10; Horrigan Decl. ¶ 10.
53
See Official Transcript (“Hearing Tr.”) at 90:17-21, 24:8-18 (D.I. 55 in Am. Alt. Ins. Corp., and
North Am. Capacity Ins. Co. v. AmerisourceBergen Corp., C.A. No. N22C-02-046 AML (CCLD)).
11
(collectively, “St. Paul”) filed an action for declaratory judgment in California
Superior Court against AmerisourceBergen and certain of its affiliates, seeking
judicial declarations that those insurers have no obligation to defend or indemnify
the named defendants for the Opioid Lawsuits (the “California Coverage Action”).54
St. Paul also filed contingent contribution claims against several of the insurers who
are plaintiffs in this action. Those claims sought (i) declarations as to those insurers’
obligations to defend and indemnify the AmerisourceBergen entities; and (ii)
equitable contribution and indemnification against the insurers in the event the court
concluded St. Paul was liable to AmerisourceBergen under the policies.55
Arrowood, National Union, American Alternative, XL Insurance, Hartford Casualty
Insurance Company, and Hartford Fire Insurance Company were joined as
defendants in the California Coverage Action “to ensure the interests they have or
may have in the subject matter of this declaratory judgment action are not litigated
or affected in their absence.”56 The complaint in the California Coverage Action
carved out from its requested relief any determination as to coverage issues that were
the subject of the West Virginia Coverage Action.57
54
See Defs.’ Mot. to Dismiss Arrowood Action at 11, Ex. H (displaying a copy of the California
Coverage Action complaint).
55
See id., Ex. H ¶¶ 54-62.
56
See id., Ex. H ¶¶ 22-23.
57
See id., Ex. H ¶ 41 n.11.
12
Between December 2020 and February 2021, Plaintiffs to the actions in this
Court filed cross-claims and third-party complaints in the California Coverage
Action against AmerisourceBergen, seeking declarations that they have no
obligation under their respective policies to defend or indemnify
AmerisourceBergen for the Opioid Lawsuits.58 From March 2021 to April 2021,
AmerisourceBergen moved to quash service of the cross-claims in California,
arguing the California court did not have personal jurisdiction over
AmerisourceBergen and moved to dismiss or stay the cross-complaint actions based
on forum non conveniens.59 At the time, AmerisourceBergen argued to the
California court that Delaware would be a more appropriate forum.60
58
See Arrowood Answering Brief (“Arrowood Answ. Br.”) at 13 (D.I. 49); National Union Answ.
Brief at 11; American Alternative Answering Brief (“American Alternative Answ. Br.”) at 10 (D.I.
23); XL Insurance Answering Brief (“XL Insurance Answ. Br.”) at 6 (D.I. 25); Hartford Insurance
Answering Brief (“Hartford Insurance Answ. Br.”) at 10 (D.I 24).
59
See Arrowood Answering Br. at 13-14; National Union Answering Brief (“National Union
Answ. Br.”) at 11 (D.I. 21); American Alternative Answ. Br. at 10-11; XL Insurance Answ. Br. at
6; Hartford Insurance Answ. Br. at 11-12.
60
See American Alternative Answ. Br., Ex. D at 8-9 (arguing in its motion that American
Alternative has no connection to California; American Alternative is a Delaware corporation with
its principal place of business in New Jersey; ABC and ABDC have no meaningful connection to
California; ABC and ABDC are both incorporated in Delaware and have their principal places of
business in Pennsylvania); see also id., Ex. E at 8-9 (same, but with regard to XL Insurance); id.,
Ex. H at 15 (arguing in AmerisourceBergen’s motion that West Virginia, Pennsylvania, or
Delaware “are far more suitable forums” than California for the policy coverage disputes).
Additionally, AmerisourceBergen filed a motion in California to admit two attorneys as “specially
appearing,” which is a designation adopted by parties who do not agree to submit to the jurisdiction
of California courts. See Arrowood Answ. Br. at 26, Ex. D (displaying a copy of “specially
appearing defendants case management statement”); see also id., Ex. L (displaying a copy of “joint
stipulation” and noting the “cross-defendants” have the designation of “specially appearing”).
13
On February 19, 2021, the California court stayed further proceedings on St.
Paul’s insurance coverage complaint “pending resolution of the West Virginia
action.”61 On June 17, 2021, the California court issued a tentative ruling on
AmerisourceBergen’s Motion to Quash and Motion to Dismiss or Stay the cross-
complaints. The California court held “specific jurisdiction [was] lacking,” but
permitted the insurers to take jurisdictional discovery related to
AmerisourceBergen’s opioid sales in California.62 Jurisdictional discovery failed to
provide a clear record from which the insurers could argue general jurisdiction
existed in California.63 As a result, the insurers voluntarily dismissed their cross-
complaints, as discussed more fully below.
F. The Anti-Suit Injunction in West Virginia
On November 25, 2020, AmerisourceBergen filed a motion in the West
Virginia Coverage Action seeking an anti-suit injunction precluding the insurers
from pursuing the California Coverage Action.64 The West Virginia court granted
61
Defendants’ Motion to Dismiss National Union Action (“Defs.’ Mot. to Dismiss National Union
Action”) at 12, Ex. L at 4 (staying the California Coverage Action because, inter alia, the West
Virginia Coverage Action involved similar issues and parties) (D.I. 9). The California court’s
order to stay the California Coverage Action was affirmed by the California Court of Appeals. See
Letter for Judicial Review in the Arrowood Action, Ex. B (D.I. 52).
62
See id., Ex. G. This was the ruling for Arrowood, but all other Plaintiffs received similar rulings.
See National Union Answ. Br. at 11-12, Ex. D; American Alternative Answ. Br. at 11; XL
Insurance Answ. Br. at 6-7; Hartford Insurance Answ. Br. at 12-13.
63
See, e.g., Arrowood Answ. Br. at 14-15 (noting that AmerisourceBergen was unable to produce
evidence of opioid sales for the relevant time period, and that “jurisdictional discovery became
bogged down in various disputes with the prospect of drawn-out motion practice”).
64
See Defs.’ Mot. to Dismiss Arrowood Action, Ex. I ¶ 9.
14
AmerisourceBergen’s motion.65 The injunction “enjoined [all parties] from
instituting or prosecuting any collateral litigation . . . against one another relating to
insurance coverage for prescription opioid lawsuits against ABC, ABDC, or any
other affiliated entity” and would “remain in effect unless and until lifted by further
order of the [West Virginia court] or until [the West Virginia Coverage Action] has
concluded.”66
On November 15, 2021, the Supreme Court of Appeals of West Virginia
affirmed in part, reversed in part, and remanded the lower court’s injunction.67 The
Supreme Court of Appeals upheld entry of the injunction but concluded its scope
was overly broad.68 On June 10, 2022, the lower court modified its initial injunction
(the “Amended Injunction”) as follows:
a. The Injunction shall be a temporary rather than permanent injunction
and shall only enjoin the parties from pursuing collateral litigation
while [the West Virginia Coverage Action] remains pending.
b. The Injunction will only apply where each of the following
conditions are met: [i.] The collateral suit must concern insurance
policies issued to ABDC or its predecessors and affiliates[;] [ii.] The
collateral suit must concern insurance policies issued by the Insurer
Defendants in this case or their predecessors and affiliates[;] [iii.] The
collateral suit must concern insurance policies that are either expressly
at issue in this case, that are implicitly at issue in this case by virtue of
65
See id., Ex. I ¶ 15.
66
See id., Ex. I ¶¶ 164-65.
67
See id. at 13 n.8; Arrowood Answ. Br. at 10 n.4; see also St. Paul Fire & Marine Ins. Co. v.
AmerisourceBergen Drug Corp., 868 S.E.2d 724, 737 (W. Va. 2021).
68
Arrowood Answ. Br. at 10 n.4; St. Paul Fire & Marine Ins. Co., 868 S.E.2d at 737.
15
the temporal scope of the claims asserted in the cases that make up
Phase 2 of this case, which include all of defendants’ policies back to
at least January 1, 1996, and/or that are written on forms that are
substantially similar to the forms at issue in this case, or that follow
form to such insurance policies; and [iv.] The collateral suit must
concern insurance coverage for prescription opioid liability lawsuits of
the same types that have been included in the National Opioid MDL or
the West Virginia Opioid MLP.
c. The Injunction is modified to clarify that nothing in the Injunction
will preclude any party from seeking a compromise resolution of any
claims, whether through settlement or otherwise.
d. Finally, the Court further modifies the Injunction to confirm that the
Court will hold a hearing at the conclusion of Phase 1 of this dispute,
which is currently scheduled for trial on October 4, 2022, at which time
the Court will hear argument on whether changed circumstances
equitably require modification of the Injunction to effectuate the
purposes identified by the West Virginia Supreme Court or whether
further modifications in the interests of justice are required.69
On October 11, 2022, certain insurers to the West Virginia Coverage Action
filed an appeal in the West Virginia Supreme Court of Appeals seeking to reverse
and vacate the Amended Injunction.70 Additionally, St. Paul’s opening brief to the
West Virginia Supreme Court of Appeals states the “Phase 1 trial that was previously
set to begin in [the West Virginia Coverage Action] on October 4, 2022 has been
adjourned, with no new trial date set.”71
69
Letter for Judicial Review in the Arrowood Action, Ex. A at 62-63 (D.I. 52).
70
See Letter for Judicial Review in the Arrowood Action, Ex. A (D.I. 77); see also id., Ex. A at
40.
71
See id., Ex. A at 13.
16
G. The Delaware Actions Are Filed
The five pending actions in this Court were filed between January 17, 2022,
and February 11, 2022.72 The California Coverage Action was stayed by the time
the actions were filed in this Court, and it also appeared likely by that time that
AmerisourceBergen would prevail in its personal jurisdiction defense to the
crossclaims.73 The California Court of Appeals affirmed the lower court’s stay
during the pendency of these actions.74 After filing the Delaware complaints, each
of the Plaintiff insurers moved to dismiss its California cross-complaint without
prejudice.75 Additionally, in July 2022, St. Paul filed in the California Coverage
Action a request to dismiss its contribution claims against the insurers without
prejudice.76
As a result of those procedural shifts, by the time this Court heard oral
argument on the pending Motions, the following was (and remains) true: none of the
72
See Arrowood Complaint (filing date of January 26, 2022); National Union Compl. (filing date
of January 17, 2022); American Alternative Compl. (filing date of February 4, 2022); XL
Insurance Compl. (filing date of February 9, 2022); Hartford Insurance Compl. (filing date of
February 11, 2022).
73
See, e.g., Arrowood Answ. Br., Ex. G.
74
See Letter for Judicial Review in the Arrowood Action, Ex. B (D.I. 52).
75
Arrowood Answ. Br. at 15; Defs.’ Mot. to Dismiss Arrowood Action, Ex. O; National Union
Answ. Br. at 12-13; American Alternative Answ. Br. at 11-12, Ex. J, Ex. K; 75 XL Insurance Answ.
Br. at 7; see also Defendants’ Motion to Dismiss XL Insurance Action (“Defs.’ Mot. to Dismiss
XL Insurance Action”), Ex. Q (D.I. 20); Hartford Insurance Answ. Br. at 14, Ex. H, Ex. I.
76
See Letter for Judicial Review in the Arrowood Action, Ex. A (D.I. 59); Letter for Judicial
Review in the National Union Action, Exs. (D.I. 34).
17
Plaintiffs have claims pending in the California Coverage Action;77 none of the
Plaintiffs are parties in the West Virginia Coverage Action;78 the policies at issue in
this case are not at issue in the West Virginia Coverage Action;79 and the California
court stayed St. Paul’s complaint—including its contingent contribution claims—in
the California Coverage Action pending resolution of the West Virginia Coverage
Action.80 Further, AmerisourceBergen has not agreed to withdraw its jurisdictional
objections in California.81 Even if St. Paul refiled its contribution claims against
Plaintiffs in California, AmerisourceBergen will continue to resist jurisdiction there,
likely successfully. As a result, even if the California court rules on Plaintiffs’
coverage obligations vis-à-vis AmerisourceBergen, that ruling likely would not have
any preclusive effect on AmerisourceBergen, a point AmerisourceBergen’s counsel
conceded during oral argument on the Motions.82 In other words, neither the West
Virginia court nor the California court is positions to decide Plaintiffs’ coverage
obligations to AmerisourceBergen under the policies and underlying proceedings
raised in the Delaware complaints.
77
This is because, as explained supra, all Plaintiffs to these actions voluntarily dismissed their
cross-complaints without prejudice in California.
78
See Hartford Insurance Answ. Br. at 9; XL Insurance Answ. Br. at 5; American Alternative
Answ. Br. at 8; National Union Answ. Br. at 8; Arrowood Answ. Br. at 9-10.
79
Hearing Tr. at 116:1-6, 120:5-10, 35:6-8, 77:9-14.
80
Defs.’ Mot. to Dismiss Arrowood Action, Ex. K at 4; see also Arrowood Answ. Br. at 12 (noting
St. Paul’s California complaint has been stayed since February 2021).
81
Hearing Tr. at 130:4-133:4, 43:22-44:5, 97:11-15, 98:2-5, 105:4-7.
82
Hearing Tr. at 130:4-17
18
H. The Parties’ Contentions
AmerisourceBergen’s arguments in all five Motions are essentially the same
and will be discussed together. AmerisourceBergen asks this Court dismiss or stay
these actions and relies on the Delaware Supreme Court’s decision in McWane Cast
Iron Pipe Corp. v. McDowell-Wellman Engineering Co.83 as support for that motion.
AmerisourceBergen contends the McWane doctrine requires a dismissal or stay of
these Delaware actions because a substantially similar action already is pending
elsewhere.84 AmerisourceBergen maintains St. Paul filed the California Coverage
Action more than a year before Plaintiffs filed these “duplicative” cases in
Delaware;85 the stay in California does not change the McWane analysis;86 the
California Coverage Action involves all the issues Plaintiffs raise in these actions;87
and to litigate these actions before resolution of the California Coverage Action is
“not necessary to have prompt and complete justice.”88 AmerisourceBergen
contends these factors, taken together, establish that Delaware is an improper venue
for these actions, or, at a minimum, these Delaware actions should be stayed pending
resolution in California.89
83
263 A.2d 281 (Del. 1970).
84
See Defs.’ Mot. to Dismiss Arrowood Action at 18-21.
85
See id. at 21-23.
86
See id. at 23-25.
87
See id. at 25-27.
88
See id. at 27-29.
89
See id. at 29.
19
Plaintiffs’ responses to AmerisourceBergen’s Motions also are substantially
similar. Plaintiffs contend McWane is the incorrect standard in this case and should
not be applied.90 Plaintiffs maintain Cryo-Maid’s forum non conveniens factors
should be evaluated under the neutral application set forth in Gramercy Emerging
Markets Fund v. Allied Irish Banks, P.L.C.,91 rather than the defendant-friendly
application set forth in McWane.92 Plaintiffs argue that when the facts are evaluated
under a neutral application of the Cryo-Maid factors, they weigh “overwhelmingly”
in favor of proceeding in Delaware.93 Namely, the parties’ access to proof is easier
in Delaware because each party’s business is headquartered on the East Coast;94 the
availability of compulsory process does not favor California;95 Delaware has a
significant interest in these disputes;96 proceeding in Delaware would be easier, more
expeditious, and less expensive;97 there is no other pending action where a court will
resolve Plaintiffs’ claims against AmerisourceBergen;98 and there is no other
suitable forum for these claims.99
90
See Hartford Insurance Answ. Br. at 15-19.
91
173 A.3d 1033 (Del. 2017).
92
See Arrowood Answ. Br. at 18-25.
93
See id. at 29-30.
94
See id. at 30-31.
95
See id. at 31.
96
See id. at 32-33.
97
See id. at 33-34.
98
See id. at 34.
99
See id. at 34-35.
20
ANALYSIS
Delaware Superior Court Civil Rule 12(b)(3) governs a motion to dismiss or
stay on the basis of forum non conveniens.100 Under Delaware law, the applicable
forum non conveniens test varies based on the proceedings in this Court and the
parties’ litigation history.101 Generally, on a motion to dismiss, the Court accepts
the complaint’s well-pleaded facts as true and draws all reasonable inferences in the
plaintiff’s favor.102 When, however, the motion to dismiss is one based on forum
non conveniens, “this Court exercises its sound discretion when making findings of
fact and drawing conclusions therefrom” by using “an orderly and logical deductive
process.”103
“A motion raising forum non conveniens is a request that a court possessing
both personal and subject matter jurisdiction over an action nevertheless decline to
hear it.”104 The common law forum non conveniens doctrine “does not exist to
deprive a plaintiff of [its] choice of forum, but rather as a backstop to prevent resort
to intentionally inconvenient forums for illegitimate purposes.”105 In settling these
100
See Del. Super. Ct. Civ. R. 12(b)(3); see also Focus Fin. P’rs, LLC v. Holsopple, 250 A.3d 939,
952 (Del. Ch. 2020) (“A motion invoking [the doctrine of forum non conveniens] proceeds under
Rule 12(b)(3).” (citation omitted)).
101
In re CVS Opioid Ins. Litig., 2022 WL 3330427, at *3 (Del. Super. Aug. 12, 2022) (citing
Aranda v. Philip Morris USA Inc., 183 A.3d 1245, 1250-51 (Del. 2018)).
102
Id. at *4 (citing Olenik v. Lodzinski, 208 A.3d 704, 714 (Del. 2019)).
103
Id. (citing Williams Gas Supply Co. v. Apache Corp., 594 A.2d 34, 37 (Del. 1991)).
104
GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 234 A.3d 1186, 1193 (Del. Super. 2020), aff’d,
appeal dismissed, 253 A.3d 93 (Del. 2021).
105
Id. (citing Winsor v. United Air Lines, Inc., 154 A.2d 561, 563 (Del. Super. 1958)).
21
Motions, the primary issue before the Court is whether a “prior pending” action
exists between the parties. The answer to that question will control the standard the
Court applies to the Motions.106
Three distinct standards for forum non conveniens exist in Delaware and a
reviewing court must select the appropriate standard based on the case’s procedural
facts. First, under the “plaintiff friendly” Cryo-Maid test, when a case in Delaware
is first-filed, Delaware courts should award dismissal only when the defendant has
established that litigating in Delaware would create an “overwhelming hardship.”107
The so-called Cryo-Maid factors, discussed below, guide the reviewing court’s
hardship analysis. Second, the “defendant friendly” McWane doctrine applies when
a case in Delaware is later-filed and when an earlier case remains pending in another
jurisdiction.108 Under this standard, a stay should be granted when: “there is a prior
action pending elsewhere”; the other court is “capable of [providing] prompt and
complete justice”; and the other action involves “the same parties and the same
issues.”109 Finally, a more neutral, intermediate Cryo-Maid test applies when the
case in Delaware is later-filed but the earlier case has been dismissed by the other
jurisdiction. Under this intermediate standard, the reviewing court may exercise its
106
See id. at 1193-95 (noting different standards to apply to a forum non conveniens motion
depending on the litigation history of the parties).
107
See id. at 1194 (citing Candlewood Timber Grp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989,
998 (Del. 2004)); In re CVS Opioid Ins. Litig., 2022 WL 3330427, at *4.
108
See GXP Cap., LLC, 234 A.3d at 1194; McWane Cast Iron Pipe Corp., 263 A.2d at 283.
109
McWane Cast Iron Pipe Corp., 263 A.2d at 283.
22
discretion and should award dismissal when the Cryo-Maid factors weigh in favor
of that outcome.110 The Delaware Supreme Court’s decision in Gramercy is the
defining precedent for this intermediate standard.111
I. The Defendants’ Motions must be evaluated under Gramercy’s
“intermediate” framework.
The first standard, which focuses on “overwhelming hardship,” does not apply
to this case. None of these actions was “first-filed” in Delaware. None of the parties
advocates for this standard.
AmerisourceBergen urges the Court to apply the McWane doctrine, but it also
does not apply to this case. None of the cross-claims Plaintiffs filed against
AmerisourceBergen in California remains pending; those actions all have been
voluntarily dismissed without prejudice.112 AmerisourceBergen’s Motions relied in
part on its position that, although the cross-claims in California were dismissed, the
coverage issues in California remained pending because of St. Paul’s contingent
contribution claims.113 Those contribution claims also now have been dismissed.114
110
See Gramercy Emerging Markets Fund, 173 A.3d at 1044.
111
GXP Cap., LLC, 234 A.3d at 1195 (citing Aranda, 183 A.3d at 1250-51).
112
See Arrowood Answ. Br. at 15; Defs.’ Mot. to Dismiss Arrowood Action, Ex. O; National
Union Answ. Br. at 12-13; American Alternative Answ. Br. at 11-12, Ex. J, Ex. K; XL Insurance
Answ. Br. at 7; Defs.’ Mot. to Dismiss XL Insurance Action, Ex. Q; Hartford Insurance Answ. Br.
at 14, Ex. H, Ex. I.
113
See, e.g., Defs.’ Mot. to Dismiss Arrowood Action at 25 (arguing that resolution of St. Paul’s
contribution claims in California will resolve or narrow the issues in these actions).
114
See Letter for Judicial Review in the American Alternative Action (D.I. 38) (“St. Paul has
recently filed requests to dismiss all claims against the plaintiff insurers in the [California
Coverage Action] and the plaintiff insurers have filed requests to dismiss all cross-complaint
claims pending against St. Paul in California.”).
23
At oral argument, AmerisourceBergen urged this Court not to consider those
dismissals, characterizing them as “machinations” intended to force
AmerisourceBergen into a third forum for coverage litigation.115
AmerisourceBergen suggested this Court should resolve the pending Motions based
on the California Coverage Action’s procedural posture at the time the Delaware
complaints were filed. AmerisourceBergen offers no support for this position, which
in any event would not promote judicial efficiency or the prompt resolution of the
parties’ dispute.
The Court sees no reason to ignore the procedural realities in California. To
the contrary, it is unlikely the coverage issues between AmerisourceBergen and the
Plaintiffs will be revived in California due to the jurisdictional defenses
AmerisourceBergen raised there.116 AmerisourceBergen’s position would require
the Court to ignore those defenses and their legal and practical effect in the
California Coverage Action. Although AmerisourceBergen suggests Plaintiffs are
involved in “gamesmanship” because they allegedly used the California Coverage
Action’s procedural posture to their advantage, the Court finds little merit to those
arguments. Plaintiffs’ decision to file here, even if partially motivated by the
Delaware Supreme Court’s decision in ACE American Insurance Company v. Rite
115
Hearing Tr. at 19:21-20:3.
116
See, e.g., Arrowood Answ. Br. at 14-15 (noting that AmerisourceBergen was unable to produce
evidence of opioid sales for the relevant period, and that “jurisdictional discovery became bogged
down in various disputes with the prospect of drawn-out motion practice”).
24
Aid Corporation,117 also stemmed from AmerisourceBergen’s decision to resist
jurisdiction in California. That is, AmerisourceBergen’s position would have this
Court blind itself to the reality that Delaware appears to be the only jurisdiction in
which the coverage claims between these parties are likely to proceed.
When the Court considers the California Coverage Action in its present
procedural posture, it is plain that Defendants’ argument for McWane’s application
is not persuasive. McWane hinges on whether there are currently pending claims
elsewhere that could make the Delaware action duplicative.118 There are not. The
only claims remaining in California are St. Paul’s claims, which have been stayed.119
To the extent Plaintiffs’ coverage claims against AmerisourceBergen were ever
pending in California, they have now been voluntarily dismissed without
prejudice.120 “[W]hen a prior-filed case is no longer pending, relief will be granted
117
270 A.3d 239 (Del. 2022).
118
See Gramercy Emerging Markets Fund, 173 A.3d at 1036 (“[A] Delaware action with a
predecessor pending elsewhere . . . implicates McWane’s discretionary standard.” (emphasis
added)); see also Aranda, 183 A.3d at 1250 (noting that the McWane test is implicated when there
is “a second-filed Delaware case with another first-filed case pending elsewhere”).
119
See Arrowood Answ. Br. at 28 (“[T]he [California Coverage Action] relates to whether [St.
Paul] and other insurers that issued insurance policies to the Bergen Brunswig Affiliates owe
coverage to [AmerisourceBergen] for alleged misconduct by the Bergen Brunswig Affiliates
relating to the distribution of opioids between 1995 and 2016, whereas this action relates to
whether [Plaintiffs, who] issued coverage to [ABC predecessors], owe[] coverage to
[AmerisourceBergen] for alleged misconduct by [ABC predecessors].” (emphasis in original));
see also id. at 13 (noting St. Paul issued “primary or umbrella coverage” to “ABC Entities” or
“Bergen Brunswig,” which were the policies at issue in California).
120
See Defendants’ Reply Brief in Hartford Action (“Defs.’ Reply Br. in Hartford Action”) at 10-
11 (D.I. 30). Defendants admit that “when a prior action is no longer pending, McWane does not
apply.” See id. at 11.
25
or denied based on whichever party bears the greater weight of the Cryo-Maid
factors.”121
Additionally, the only “pending” non-Delaware action is the West Virginia
Coverage Action, which was filed by ABDC but does not name any of the insurers
in the Delaware actions.122 For McWane to apply, a prior pending action must
involve, inter alia, “the same parties and the same issues.”123 The West Virginia
Coverage Action does not involve the same parties. The Court therefore will
evaluate the Motions under Gramercy’s “intermediate framework.”
II. The Cryo-Maid factors weigh in favor of denying Defendants’ forum
non conveniens Motions and allowing these actions to proceed in
Delaware.
To reiterate, under Gramercy, the Court should exercise its discretion to
dismiss or stay a Delaware action when an application of the Cryo-Maid factors
favors that result. The six Cryo-Maid factors are:
“(1) [t]he relative ease of access to proof; (2) the availability of
compulsory process for witnesses; (3) the possibility of the view of the
premises [sic], if appropriate; . . . (4) all other practical problems that
would make the trial of the case easy, expeditious and inexpensive;”
and (5) “whether or not the controversy is dependent upon the
121
GXP Cap., LLC, 234 A.3d at 1194; see also Gramercy Emerging Markets Fund, 173 A.3d at
1044 (“[W]hen a case is later-filed and its predecessors are no longer pending, the analysis is not
tilted in favor of the plaintiff or the defendant. In that situation, Delaware trial judges exercise
their discretion and award dismissal when the Cryo-Maid factors weigh in favor of that outcome.”).
122
Arrowood Answ. Br. at 10; National Union Answ. Br. at 8; American Alternative Answ. Br. at
8; XL Insurance Answ. Br. at 5; Hartford Insurance Answ. Br. at 9.
123
McWane Cast Iron Pipe Corp., 263 A.2d at 283.
26
application of Delaware law which the courts of this State more
properly should decide than those of another jurisdiction. A sixth
[factor]—the pendency or nonpendency of a similar action in another
jurisdiction—was added to the Cryo-Maid framework by subsequent
decisions.”124
Having evaluated each of those factors, the Court concludes they either favor
continuing with the Delaware action or are neutral and therefore not relevant to the
analysis.
1. The relative ease of access to proof factor weighs in favor of Delaware.
The access to proof factor weighs in Plaintiffs’ favor. Nearly all witnesses for
AmerisourceBergen are located in Pennsylvania.125 All Plaintiffs are headquartered
on the East Coast.126 AmerisourceBergen is headquartered in Pennsylvania.127 The
insurance claims at issue arise out of national opioid litigation and insurance policies
124
Gramercy Emerging Markets Fund, 173 A.3d at 1036-37 (quoting Gen. Foods Corp. v. Cryo-
Maid, Inc., 198 A.2d 681, 684 (Del. 1964)); id. at 1037 n.5.
125
See American Alternative Answ. Br., Ex. D at 8-9 (noting in AmerisourceBergen’s motion to
stay in the California Coverage Action that ABC and ABDC both are incorporated in Delaware
and have their principal places of business in Pennsylvania); see also Arrowood Am. Compl. ¶¶
12-13 (noting that ABC and ABDC both are Delaware corporations with their principal places of
business in Pennsylvania).
126
See Arrowood Am. Compl. ¶¶ 11-17; National Union Compl. ¶¶ 8-9; American Alternative
Compl. ¶¶ 15-18; XL Insurance Compl. ¶¶ 7-9; Hartford Insurance Compl. ¶¶ 8-13.
AmerisourceBergen made a judicial admission in California that AmerisourceBergen and “all of
the parties named in the Cross-Complaints” are headquartered on the East Coast. See Arrowood
Answering Br., Ex. E at 11 (emphasis and underlining in original). The only party to the Delaware
actions that is not headquartered on the East Coast is MWI Veterinary Supply, Inc., which is
headquartered in Boise, Idaho. See Hartford Insurance Compl. ¶ 14.
127
Arrowood Am. Compl. ¶¶ 12-13 (noting that ABC and ABDC both are Delaware corporations
with their principal places of business in Pennsylvania); American Alternative Answering Br., Ex.
D at 8-9 (noting in AmerisourceBergen’s motion to stay in the California Coverage Action that
ABC and ABDC both are Delaware corporations and have their principal places of business in
Pennsylvania).
27
that were issued to AmerisourceBergen (and predecessor entities) in Pennsylvania,
which is closer to Delaware than California. By proceeding with these cases in
Delaware, Plaintiffs will have more efficient access to AmerisourceBergen’s
discovery. Conversely, AmerisourceBergen has not pointed to anything indicating
its access to Plaintiffs’ discovery will be limited by proceeding in Delaware.
2. The factors relating to availability of compulsory process and the
possibility of viewing the premises do not favor either side.
For purposes of considering the availability of compulsory process, the Court
evaluates whether “another forum would provide a substantial improvement as to
the number of witnesses who would be subject to compulsory process.” 128 The
“moving party . . . must identify the inconvenienced witnesses and the substance of
their testimony.”129 As the moving party, it is AmerisourceBergen’s burden to
demonstrate that another forum, particularly California or West Virginia, would
subject more witnesses to compulsory process. AmerisourceBergen has not done
so. Similarly, the third factor, which considers the possibility of viewing the
premises, is not relevant to the current dispute.
128
Mt. Hawley Ins. Co. v. Jenny Craig, Inc., 668 A.2d 763, 769 (Del. Super. 1995) (citation
omitted).
129
Id.28
3. Other practical problems that would make trial easy, expeditious, and
inexpensive weigh in favor of Delaware.
Other practical issues weigh in Plaintiffs’ favor and could make resolution of
these disputes in Delaware more efficient and prompt. Preliminary dispositive issues
could promptly resolve disputes regarding coverage in these actions. The parties are
incorporated in Delaware, Pennsylvania, New Hampshire, or Connecticut.130
Plaintiffs are not parties to the West Virginia Coverage Action,131 which is still only
in Phase I of litigation.132 There is no imminent trial or near term resolution likely
in West Virginia, and in any event that action does not involve the policies or
Plaintiffs at issue in this case.133 Accordingly, this factor weighs in favor of
Delaware.
4. Whether or not the controversy is dependent upon application of
Delaware law which the courts of Delaware more properly should
decide weighs in favor of Delaware.
Delaware is “available to litigants [as] a neutral forum to adjudicate
commercial disputes against Delaware entities, even where the dispute involves
130
See Arrowood Am. Compl. ¶¶ 11-17 (“Arrowood is a Delaware corporation . . . ABC is a
Delaware corporation . . . ABDC is a Delaware corporation . . . St. Paul . . . is organized under the
laws of Connecticut . . . ACE . . . is organized under the laws of Pennsylvania.”); National Union
Compl. ¶ 8 (“National Union is a Pennsylvania corporation.”); American Alternative Compl. ¶¶
15-16 (“American Alternative Insurance Corporation is a Delaware corporation . . . North
American Capacity Insurance Company is a New Hampshire corporation.”); XL Insurance Compl.
¶ 7 (“XL Insurance America, Inc. is incorporated under the laws of Delaware.”); Hartford
Insurance Compl. ¶¶ 8-11 (“Hartford [Insurance] is a Connecticut corporation.”).
131
See Hartford Insurance Answ. Br. at 9; XL Insurance Answering Br. at 5; American Alternative
Answ. Br. at 8; National Union Answ. Br. at 8; Arrowood Answ. Br. at 9-10.
132
See Letter for Judicial Review in the Arrowood Action, Ex. A at 13 (D.I. 77).
133
Arrowood Answ. Br. at 27 (citing Defs.’ Mot. to Dismiss Arrowood Action at 10-11).
29
foreign law and the parties and conduct are centered in a foreign jurisdiction.”134
Plaintiffs seek declarations that they have no duty to defend or indemnify
AmerisourceBergen with respect to all Opioid Lawsuits, particularly all government
lawsuits, including those filed by the State of West Virginia (the WVAG Action)
and those filed by other West Virginia cities and counties.135
Although Pennsylvania law, rather than Delaware law, may apply to the
policies at issue here,136 that fact does not favor staying this case in favor of
California or West Virginia. To the contrary, ACE American Insurance Co. v. Rite
Aid Corporation, a recent Delaware Supreme Court decision, demonstrates that the
application of Delaware law and Pennsylvania law are not in conflict in this area,137
and that case applied Delaware law to a coverage action regarding a retail
pharmacy’s liability for prescription opioid claims.138 Delaware is a proper forum
to resolve a coverage dispute relating to a Delaware entity, and AmerisourceBergen
134
Candlewood Timber Grp. LLC, 859 A.2d at 1000.
135
See, e.g., National Union Compl. ¶¶ 47-54 (asserting counts for declarations that National
Union has no duty to defend or indemnify AmerisourceBergen for the Opioid Lawsuits).
136
See Hearing Tr. at 91:8-20; see also Arrowood Answ. Br. at 16 (arguing Pennsylvania law or
Delaware law should apply to the Arrowood Policies); National Union Answ. Br. at 25 (arguing
Pennsylvania law should apply to the National Union Policies); American Alternative Answ. Br.
at 31 (arguing Delaware law should apply to the American Alternative Policies absent a conflict
of law); XL Insurance Answ. Br. at 19 (arguing Pennsylvania law or Delaware law should apply
to the XL Insurance Policies).
137
ACE Am. Ins. Co., 270 A.3d at 244-45.
138
See id. at 245 (applying Delaware law to the insurance coverage issues).
30
previously told the California court that Delaware is a more appropriate forum than
California.139
5. The pendency or nonpendency of a similar action in another
jurisdiction weighs in favor of Delaware.
The similar pending actions factor was added to the Cryo-Maid framework by
later decisions.140 “[T]he absence of a prior pending action in another jurisdiction
‘is an important, if not controlling, consideration.’”141 From a practical perspective,
there is no pending action in another jurisdiction involving these parties and issues.
The cross-claims in California were voluntarily dismissed without prejudice and are
no longer pending there,142 and St. Paul’s contribution claims in the California
Coverage Action similarly were dismissed without prejudice and are no longer
pending.143 The California proceeding, in its present posture, will not result in a
coverage decision that is binding on AmerisourceBergen.
139
See American Alternative Answ. Br., Ex. D at 8-9 (arguing in its motion that American
Alternative has no connection to California; American Alternative is a Delaware corporation with
its principal place of business in New Jersey; ABC and ABDC have no meaningful connection to
California; ABC and ABDC are both incorporated in Delaware and have their principal places of
business in Pennsylvania); see also id., Ex. E at 8-9 (same, but with regard with XL Insurance);
id., Ex. H at 15 (arguing in AmerisourceBergen’s motion that West Virginia, Pennsylvania, or
Delaware “are far more suitable forums” than California for the policy coverage disputes).
140
See Gramercy Emerging Markets Fund, 173 A.3d at 1037 (noting that this sixth factor was
added to the Cryo-Maid framework by subsequent decisions).
141
Martinez v. E.I. DuPont De Nemours and Co., Inc., 82 A.3d 1, 34 (Del. Super. 2012) (citing
State Marine Lines v. Domingo, 269 A.2d 223, 226 (Del. 1970)), aff’d, 86 A.3d 1102 (Del. 2014).
142
See Arrowood Answ. Br. at 15; Defs.’ Mot. to Dismiss Arrowood Action, Ex. O; National
Union Answ. Br. at 12-13; American Alternative Answ. Br. at 11-12, Ex. J, Ex. K; XL Insurance
Answ. Br. at 7; Defs.’ Mot. to Dismiss XL Insurance Action, Ex. Q; Hartford Insurance Answ. Br.
at 14, Ex. H, Ex. I.
143
See Letter for Judicial Review in the American Alternative Action (D.I. 38) (“St. Paul has
recently filed requests to dismiss all claims against the plaintiff insurers in the [California
31
For all the foregoing reasons, the Cryo-Maid factors weigh in favor of these
actions proceeding in Delaware. The Court nevertheless remains sensitive to
AmerisourceBergen’s comity concerns and the existence of the anti-suit injunction
in the West Virginia Coverage Action. The Court has no intention of usurping the
West Virginia court’s authority regarding the claims pending before it. This Court
remains open to working with the parties and the West Virginia court as appropriate
to fashion a scheduling order and discovery process that accords comity to the West
Virginia court, uses the parties’ resources as efficiently as possible, and avoids as
much as possible the risk of inconsistent rulings.
CONCLUSION
For the foregoing reasons, Defendants’ Motions to Dismiss or Stay the actions
are DENIED. IT IS SO ORDERED.
Coverage Action] and the plaintiff insurers have filed requests to dismiss all cross-complaint
claims pending against St. Paul in California.”).
32