The question whether so-called “medical monitoring” qualifies as “bodily injury,” for purposes of triggering coverage under a liability policy, is one that has long been asked. But despite the popularity of the question, there are very few cases, even nationally, that have answered it. What’s more, the few decisions on the issue are generally fact-driven and not always accompanied by a detailed rationale. This combination of factors can make for a challenging time, for policyholders and insurers, and their counsel, when confronted with the medical monitoring question.
As for what is medical monitoring in the first place, given that the cases are fact sensitive, that is best demonstrated by way of the examples provided in some of the few cases that have addressed whether such monitoring is “bodily injury.” But, in general, it is the establishment of a fund to pay for future testing of individuals to determine if they have sustained a certain type of injury on account of a prior incident.
Whether medical monitoring qualifies as “bodily injury” recently arose in Cincinnati Ins. Co. v. Richie Enterprises, LLC, No. 12-186 (W.D. Ky. Mar. 4, 2014) [enhanced version available to lexis.com subscribers]. As an unreported decision, from a District Court in Kentucky, Ritchie is not some sort of wide-spread pronouncement of whether “medical monitoring” qualifies as “bodily injury.” But when an issue has not been the subject of many decisions, even nationally, unreported decisions from District Courts in Kentucky can take on more importance nationally than they might otherwise.
At issue in Richie was coverage for Ritchie Enterprises, LLC, a pharmaceutical drug distributor. The West Virginia Attorney General sued Richie and twelve other pharmaceutical drug distributors, alleging that “they illegally distributed controlled substances by supplying physicians and drugstores with drug quantities in excess of legitimate medical need. According to the AG, Richie and the other drug distribution companies became an integral part of the ‘pill mills’ in West Virginia.” The AG asserted numerous causes of action against Richie and the other drug distributors. In general, the AG alleged violations of the Uniform Controlled Substances Act by Ritchie failing to diligently respond to suspicious orders and filling them. The AG also alleged that Ritchie “willfully turned a blind eye towards the actual facts by regularly distributing large quantities of controlled substances to customers.” In addition to these causes of action, others asserted by the AG were for violation of the state’s Consumer Credit and Protection Act, anti-trust violations, public nuisance and negligence.
Turning to the relevant portion for discussion here, in Count VII, the AG sought a court-approved medical monitoring program for prescription drug users in West Virginia to aid in diagnosis, treatment, and research.
The court turned to the question whether a defense was owed under Ritchie’s commercial general liability policy. To do so required an examination of such issues as whether the complaint alleged an “occurrence” (accident) and potential applicability of the policy’s intentional and criminal act exclusion. For various reasons, the court held that, at least for duty to defend purposes, the complaint alleged an “occurrence” – yes, the complaint contained allegations of intentional conduct, but it also contained allegations that Ritchie’s conduct was negligent. As for the intentional and criminal act exclusion, the court concluded that it did not preclude a defense: “[T]he conduct of distributing prescription drugs based upon orders placed by pharmacies is not, in and of itself, illegal and the violation of laws cannot be reasonably anticipated. Further, the underlying complaint contains allegations that fall within the insurance policy’s language, as there are allegations that the prescription drug abuse epidemic was ‘fortuitous,’ an ‘accident,’ and an ‘occurrence.’”
But what about the CGL policy’s requirement that the complaint allege “bodily injury?” The insurer argued that West Virginia is not seeking damages for “bodily injury.” Instead, as the insurer saw it, the state was seeking “damages for its economic losses -- namely, the money it has been required to spend because of the prescription drug abuse epidemic in West Virginia.”
The Ritchie court concluded that the complaint sought damages that went beyond economic harm and included allegations seeking damages for “bodily injury.” For this the court pointed to the AG’s claim for a “medical monitoring” program: “The AG alleges that the ‘increased susceptibility to death, injuries and irreparable harm to the health of abusers and dependent users resulting from their exposure to prescription drugs can only be mitigated or addressed by the creation of a Court-supervised fund, financed by the Defendants, that will fund a comprehensive medical monitoring program....’ The AG also alleges that ‘[p]rescription drug users in West Virginia have no adequate remedy at law in that monetary damages alone do not compensate for the continuing nature of the harm to them....’ Further, the AG alleges that ‘[w]ithout a court-approved medical treatment monitoring program, the relevant product users will not receive prompt medical care which could detect and prolong their productive lives, increase prospects for improvement and minimize disability.’”
The court held that such allegations “show that in addition to seeking damages for economic harm, the State of West Virginia is seeking to recover damages on behalf of its citizens for ‘bodily injury.’”
Unfortunately, the Ritchie court provided no real discussion of how it reached this conclusion. It’s decision seemed to have been along the lines of – this involves health and medical care so that makes it “bodily injury.” The court cited Baughman v. U.S. Liability Ins. Co., 662 F. Supp. 2d. 386 (D.N.J. 2009) [enhanced version available to lexis.com subscribers], in support of its decision – which also concluded that medical monitoring qualified as “bodily injury” because, in that case: “The underlying plaintiffs have brought suit to procure, among other things, the costs of medical monitoring ‘as damages' for the ‘bodily injury’ they allegedly suffered due to exposure to dangerous levels of mercury and so the underlying suit falls within the general coverage of the CGL policy.”
Ritchie is one more case to add to the short list addressing whether medical monitoring qualifies as “bodily injury.” But like the others, it is fact driven and the court failed to explain the rationale for its decision.
[FYI – The Baughman court made an effort to synthesize some of the medical monitoring cases to determine when such monitoring is “bodily injury” and when it is not.]
Coverage Opinions is a bi-weekly (or more frequently) electronic newsletter reporting or providing commentary on just-issued decisions from courts nationally addressing insurance coverage disputes. Coverage Opinions focuses on decisions that concern numerous issues under commercial general liability and professional liability insurance policies. For more information visit www.coverageopinions.info.
The views expressed herein are solely those of the author and not necessarily those of his firm or its clients. The information contained herein shall not be considered legal advice. You are advised to consult with an attorney concerning how any of the issues addressed herein may apply to your own situation. Coverage Opinions is gluten free but may contain peanut products.
Randy Maniloff is Counsel at White and Williams, LLP in Philadelphia. He previously served as a firm Partner for seven years and transitioned to a Counsel position to pursue certain writing projects including Coverage Opinions . Nonetheless he still maintains a full-time practice at the firm. Randy concentrates his practice in the representation of insurers in coverage disputes over primary and excess obligations under a host of policies, including commercial general liability and various professional liability policies, such as public official’s, law enforcement, educator’s, media, computer technology, architects and engineers, lawyers, real estate agents, community associations, environmental contractors, Indian tribes and several others. Randy has significant experience in coverage for environmental damage and toxic torts, liquor liability and construction defect, including additional insured and contractual indemnity issues. Randy is co-author of “General Liability Insurance Coverage - Key Issues In Every State” (Oxford University Press, 2nd Edition, 2012). For the past twelve years Randy has published a year-end article that addresses the ten most significant insurance coverage decisions of the year completed.
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