Injunction Against Parallel CA Coverage Overbroad

The Supreme Court of Appeals of West Virginia, applying West Virginia law, affirmed the circuit court’s authority to enter an anti-suit injunction against parallel coverage litigation regarding opioids pursued in California, but also held that the injunction itself was overbroad, constituting an abuse of discretion. The Supreme Court accordingly remanded the case for clarification of the anti-suit injunction.

The instant coverage dispute stems from an increase in litigation against pharmaceutical distributors for their contributory role in the opioid-use epidemic. The insured, AmerisourceBergen Drug Corporation (“ABDC”), is one of those pharmaceutical distributors who has been sued by a host of governmental bodies, hospitals, and individuals. In 2017, ABDC filed suit against five insurance coverage policies, seeking to establish the insurers’ duty to defend and coverage obligations under sixteen policies issued between 2006 and 2013.

After 3.5 years of extensive discovery, one of the insurers, St. Paul Fire and Marine Ins. Co. (“St. Paul”), filed a competing insurance coverage action in California state court against ABDC, alleging that ABDC had been named as a defendant in more than 80 California lawsuits, and hundreds more in other states. In that same action, St. Paul named as defendants seventy insurance companies who had issued insurance policies to ABDC and its affiliates between 1995 and 2018. Both the West Virginia and California actions seek to determine coverage obligations based on the language of the various policies.

At issue, then, was whether the California action constituted a parallel, duplicative, or substantially similar litigation relative to the action proceeding in West Virginia. The circuit court in West Virginia found that it did and entered an “anti-suit injunction” against the proceeding in California, stating that “[a]ll parties” are enjoined from pursuing any actions relating to insurance coverage for prescription opioid lawsuits against one another in another forum.

The Supreme Court, hearing St. Paul’s appeal to the anti-suit injunction, affirmed the power of the circuit court to protect its jurisdiction over a controversy by entering an anti-suit injunction. Nonetheless, such an injunction is an exceptional remedy that should be used “cautiously and with restraint.”

Noting that every party to the West Virginia action are parties to the California action and that the two proceedings both seek to interpret the same policies, the Supreme Court found that entering the anti-suit injunction here was not an abuse of discretion per se. But, turning to the breadth and focus of the specific injunction, the Supreme Court found that the circuit court abused its discretion in enjoining all parties from pursuing any litigation in California, even if that litigation did not concern the sixteen insurance policies at issue in the West Virginia case. Accordingly, the Supreme Court, while affirming a circuit court’s power to issue an anti-suit injunction, reversed and remanded this particular injunction, as currently drafted, for being overly broad. St. Paul Fire & Marine Insurance Co v. AmerisourceBergen Drug Corp, West Virginia Supreme Court of Appeals, No. 21-0036 (W. Va. Nov. 15, 2021).