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Travelers Prop. Cas. Co. of Am. v. Anda, Inc.

United States District Court for the Southern District of Florida

March 9, 2015, Decided; March 9, 2015, Filed

CASE NO. 0:12-cv-62392-KMM

Opinion

 [*1310]  OMNIBUS ORDER ON MOTIONS AND CROSS-MOTIONS FOR SUMMARY JUDGMENT

THIS CAUSE comes before the Court upon the Motions and Cross-Motions for Summary Judgment filed by Gemini Insurance Company ("Gemini"); Anda Inc. ("Anda"); Watson Pharmaceuticals, Inc. ("Watson") (referred to jointly [**2]  with Anda as "Anda"); Federal Insurance Company ("Federal") and Great North Insurance Company ("Great Northern") (referred to jointly as "Federal"); and St. Paul Fire and Marine Insurance Company ("St. Paul") and The Travelers Property Casualty Company of America ("Travelers") (referred to jointly as "S&T").1 The Motions and Cross-Motions for Summary Judgment have been fully briefed and the Court has fully considered each of the filings.

Accordingly, UPON CONSIDERATION of the Motions for Summary Judgment, the Cross-Motions for Summary Judgment, the Responses, the Replies, the applicable evidence, and being otherwise fully advised in the premises, the Court enters the following Omnibus Order.

I. Gemini's Motion for Summary Judgment

A. Background

The issue in this Motion is whether Gemini owes Anda a duty to defend and indemnify Anda for a lawsuit brought by the State of West Virginia. West Virginia filed its Amended Complaint (ECF No. 191-6) (the "Underlying Complaint") seeking injunctive relief and damages for costs to the State resulting from the prescription drug abuse epidemic in West Virginia. See generally Underlying Compl. Anda is a major distributor of prescription drugs, which are also controlled substances. Id. ¶¶ 2—3. West Virginia alleges that Anda "violated West Virginia statutes and regulations that govern controlled substances and consumer protection" [**4]  by "distributing controlled substances without sufficient monitoring and controls." Id. ¶¶ 5, 7. For example, West Virginia alleges that Anda and other prescription drug manufacturers sold pharmacies such large quantities of  [*1311]  abused prescription drugs that the number of prescription drugs in some communities is far greater than the population could actually warrant. Id. ¶ 3. This practice of unfettered distribution to "pill mills" cost West Virginia an estimated "$430 million annually in . . . 2010 with costs projected to be as much as $695 million annually by 2017." Id. ¶¶ 3, 6(a). These figures are derived from additional costs to West Virginia's hospitals, schools, courts, social service agencies, jails, and prisons due to the epidemic. Id. ¶ 1.

The Underlying Complaint alleges the following counts: (I) Injunctive Relief for Violations of . . . the West Virginia Uniform Controlled Substances Act; (II) Damages Resulting from Negligence and Violations of the West Virginia Uniform Controlled Substances Act; (III) Unfair Methods of Competition or Unfair or Deceptive Acts or Practices in Violation of the West Virginia Consumer Credit and Protection Act (WVCCPA); (IV) Public Nuisance; and [**5]  (V) Negligence. See generally id. Key to the conceptualization of the Underlying Complaint is West Virginia's theory of relief — the State seeks relief solely for its own economic loss and not for any individual claims the persons harmed directly by the prescription drugs might assert.

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90 F. Supp. 3d 1308 *; 2015 U.S. Dist. LEXIS 31450 **; 25 Fla. L. Weekly Fed. D 108

THE TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA and ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiffs/Counter Defendants, vs. ANDA, INC. and WATSON PHARMACEUTICALS, INC., Defendants/Counter Plaintiffs.FEDERAL INSURANCE COMPANY and GREAT NORTHERN INSURANCE COMPANY, Plaintiff/Counter Defendant, vs. ANDA, INC., Defendant/Counter Plaintiff.ANDA INC., Counter Plaintiff, vs. GEMINI INSURANCE COMPANY, Counter Defendant.

Subsequent History: Affirmed by Travelers Prop. Cas. Co. of Am. v. Anda, Inc., 2016 U.S. App. LEXIS 15760 (11th Cir. Fla., Aug. 26, 2016)

CORE TERMS

bodily injury, summary judgment, damages, coverage, insured, duty to defend, no duty, indemnify, property damage, unfair competition, costs, prescription drug, Parties, duty to indemnify, alleges, controlled substance, insurance policy, choice of law, provisions, Consumer, Products, sickness, disease, argues, ambiguous, jointly, asserted claim, economic loss, legally obligated to pay, seek damages

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Burdens of Proof, Movant Persuasion & Proof, Evidentiary Considerations, Scintilla Rule, Appropriateness, Insurance Law, Remedies, Declaratory Judgments, Procedure, Preliminary Considerations, Federal & State Interrelationships, Erie Doctrine, Choice of Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Claim, Contract & Practice Issues, Plain Language, Exclusions, Question of Law, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Indemnification