Court Poised to Deny Publix Opioid Coverage

Last month, a Florida federal court denied Publix’s motion for partial summary judgment seeking coverage for defense costs it incurred defending dozens of opioid lawsuits. The Court also ordered Publix to show cause as to why summary judgment should not be granted for defendants.

As is often the case in coverage actions, the parties were at odds over the appropriate application of the policy language that would trigger coverage to the alleged occurrence. Specifically, whether Publix’s defense costs were incurred “because of bodily injur[ies] arising out of” drugs prescribed at Publix pharmacies. Publix was seeking coverage for the millions it had incurred defending opioid lawsuits brought in 2021. The lawsuits all alleged public nuisance claims stemming from the wrongful distribution of opioids and specifically listed overdoses, death, and addiction as the consequences of Publix’s actions.

While the Court acknowledged that some of the alleged consequences were bodily injuries, it found no coverage because the lawsuits did not allege direct causation between the wrongful conduct and the bodily injuries. And under Florida law, “because of” language requires direct causation to trigger coverage.

Notably, the Court’s opinion appeared to indicate the Publix would have had coverage if the policy covered costs “arising out of bodily injury . . ..” And given that the more expansive “arising out of” language directly follows the term “bodily injury” in the policy, the Court’s ruling will no-doubt be frustrating to Publix and policyholders in similar situations. The critical takeaway for policyholders is to know your policy terms and how those terms have been interpreted in relevant jurisdictions.