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Walmart Sues Insurance Carriers Over Denied Opioid Litigation Coverage

3 min read

Walmart Inc.’s insurance companies are refusing to cover the Bentonville retailer’s costs in the hundreds of opioid lawsuits it’s facing, possibly costing the retailer billions of dollars.

Walmart sued dozens of its insurance providers last week in Benton County Circuit Court, saying its insurance companies are obligated to cover its defense costs, settlements, judgments and other losses in connection with the opioid lawsuits, but aren’t. Walmart wants a judge to rule that it is entitled to the coverage. 

Walmart filed the lawsuit a week before it offered on Tuesday a $3.1 billion nationwide opioid settlement framework to resolve substantially all opioid lawsuits and potential lawsuits by state, local and tribal governments. Lawyers representing local governments said the company would pay most of the settlement over the next year if it is finalized. The deals are the product of negotiations with a group of state attorneys general, but they are not final.

In its lawsuit against insurers, Walmart said that it has spent millions of dollars in insurance premiums and expected that it would be covered against allegations such as those brought in the opioid lawsuits, which accused Walmart’s pharmacists of unlawfully dispensing opioids, fueling the national opioid crisis. 

“Walmart has spent tens of millions of dollars defending itself against the Opioid Lawsuits and expects to spend much more in the future,” according to the 31-page lawsuit filed Nov. 7. “But now, when Walmart seeks to rely on the policies it has purchased to cover these losses, the Insurers have turned their backs, providing a litany of excuses why the policies supposedly do not cover the Opioid Lawsuits.

“Those excuses are meritless, as Walmart has repeatedly explained to Insurers, yet they continue to refuse to live up to their obligations under the policies.”

Walmart said its insurance providers, many of the nation’s leading companies, have either reserved their rights to deny coverage, denied their duties to defend or indemnify, or haven’t acknowledged their obligations to provide coverage in the lawsuits. 

“For example, certain Insurers have asserted that these lawsuits are not brought ‘because of bodily injury,’ despite complaints and settlements expressly stating otherwise and making clear that the underlying plaintiffs’ alleged damages are because of alleged injury and death to hundreds of thousands of individuals as a result of opioid abuse and addiction,” Walmart said.

Walmart said that it bought policies that provide hundreds of millions of dollars in general liability insurance. Its lawsuit involves nearly 200 insurance policies spanning two decades. Many of those policies are hundreds of pages long. 

Walmart’s lawsuit seeks an unspecified amount of damages for breach of contract against the insurance companies for failing to pay Walmart’s defense costs in the opioid litigation. Walmart also is suing the companies for failing to pay its losses, including the settlements to resolve the opioid lawsuits. 

“Despite Walmart’s request that they do so, no Insurer has acknowledged its indemnity coverage obligations or communicated to Walmart that it will honor its coverage obligations,” the lawsuit said.

Walmart is represented by the law firms Quattlebaum Grooms & Tull of Little Rock, RMP of Springdale and Cohen Ziffer Frenchman & McKenna of New York.  

In a statement Tuesday announcing its settlement offer, Walmart said that it “strongly disputes” allegations that its pharmacies improperly filled prescriptions for the powerful prescription painkillers. The company does not admit liability with the settlement plan.

Walmart’s $3.1 billion proposal follows similar announcements Nov. 2 from the two largest U.S. pharmacy chains, CVS Health and Walgreen Co., which each said they would pay about $5 billion.

The Associated Press contributed to this report.

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