Ohio Supreme Court Rules Insurer Has No Duty to Defend Opioid-Epidemic Suits

Adding to a growing split among courts, the Ohio Supreme Court held that an insurance policy covering "damages because of bodily injury" was not triggered by lawsuits brought by governmental entities seeking damages for costs arising out of the opioid epidemic. Interpreting nearly identical insurance-policy language, the Seventh Circuit Court of Appeals previously found that the insurer did have a duty to defend the insured, whereas the Delaware Supreme Court had ruled in the same way as the Ohio Supreme Court in finding no duty to defend against opioid-epidemic lawsuits.


Masters Pharmaceutical, Inc., a distributor of pharmaceutical products, including opioids, purchased several commercial general liability policies from Acuity, an insurer. The policies imposed a duty on Acuity to defend Masters against any suit seeking "damages because of bodily injury." Masters, like many entities involved in the production, sale, and distribution of prescription opioids, was sued by a raft of governmental entities who sought damages for harms resulting from the opioid epidemic, including "increased law-enforcement expenses, judicial expenditures, prison and public-works costs, emergency and medical-care-services costs, substance-abuse-treatment expenses, and lost economic opportunity." Masters and Acuity sought dueling declaratory judgments about whether Acuity had a duty to defend Masters in the litigation. The trial court said yes; the court of appeals held no.

Court's Analysis

Insurance policies often impose both a duty to defend and a duty to indemnify, with the former being "both broader and distinct from" the latter. "When determining whether an insurer has a duty to defend, we look to the scope of the allegations of the underlying complaint filed against the insured. . . . If the allegations state a claim that potentially or arguably falls within the liability insurance coverage, then the insurer must defend the insured in the action."

After discussing the split among courts that had reached opposite conclusions based on the same language, the court conceded that "some of the complaints include allegations that the governments' citizens sustained opioid-related injuries and that the damages sought by the governments include costs for providing medical care and treatment services." Combining the broad "potentially or arguably" standard for a duty to defend and an acknowledgement that some of the complaints sought damages because of bodily injuries, it would seem to follow that the insurer had a duty to defend - which was the conclusion reached by the dissent - but the majority instead construed the coverage language as requiring "more than a tenuous connection between the alleged bodily injury sustained by a person and the damages sought."

Focusing on the repeated phrase "the bodily injury," the Court read the word "the" as imposing a requirement that there be a specific bodily injury for which damages were sought. In the Court's view, the governments were not seeking damages for any such particular bodily injury. "State differently, the governments seek damages for their own aggregate economic injuries caused by the opioid epidemic and not for any particular opioid-related bodily injury sustained by a citizen as a direct result of Masters's alleged failures." The Court then described three scenarios where there would be a duty to defend under the policy language: (1) a suit by an injured person for losses sustained by them; (2) "a person recovering on behalf of an injured person," such as a parent suing for harm to a child; and (3) "a person or organization that directly suffered harm because of another person's injury—in which case, the existence and cause of the injury must be proved."


The case outcome produces a paradox for policyholders. If an insured is alleged to have caused a bodily injury, the insurer has a duty to defend the action. If an insured is alleged to have caused numerous bodily injuries, such as in a mass tort action, the insurer has a duty to defend. But, if an insured is alleged to have caused such widespread harm and so many bodily injuries that an epidemic results and the same actions that caused the underlying harms instead are recast as a public nuisance and as RICO violations, then the insurer does not have a duty to defend, because the plaintiffs "tie their alleged losses to the aggregate economic injuries they have experiences as a result of the opioid epidemic, not to any particular bodily injury." That is the case even though those "aggregate economic injuries" are nothing more than the accumulation of countless individual harms, which the Court conceded "necessarily relate[] to bodily injury." Complaints alleging catastrophic harm and enormous damages are the exact situation in which policyholders most need insurance, and yet, for the opioid-epidemic lawsuits, that is the situation in which insurers have no duty to defend.