Albertsons Balks at Judge’s Take on California Law

Tuesday, August 18, 2026

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Albertsons Balks at Judge’s Take on California Law

Food Chain Says Fact That State’s High Court Hasn’t Spoken on Whether Insurance Policies Apply to Suits Over Filling of Opioid Prescriptions Doesn’t Justify Assumption That Same Result Would Be Reached as in Delaware

By a MetNews Staff Writer

Albertsons is asking the Delaware Supreme Court to reverse a summary judgment in favor of liability insurers in their quest to avoid indemnifying the grocery-store chain in connection with litigation costs stemming from governmental actions over its filling, unquestioningly, of a massive number prescriptions for opioids, arguing that a lower court erred in assuming that application of California law would not give rise to a duty to defend.

Under California law, the general liability insurance policies might well provide coverage, Albertsons argued, relying largely on a forecast by a judge of the U.S. District Court for the Northern District of California as to how the California Supreme Court would determine the issue if it were presented to it.

In a brief filed Friday, the appellant asked the state high court to reverse an April 27 determination by a Superior Court judge that Delaware’s decisional law—under which the insurers would not face liability—applies, without need to conduct a choice-of-law analysis. Neither the law of California, where Safeway was headquartered prior to its 2015 acquisition by Albertson, or that of Idaho, differs from that of the forum state, the trial judge ruled.

Idaho is where Albertsons—a group of companies collectively comprising the nation’s second largest grocery store operation, behind Kroger—is headquartered. It is a Delaware corporation but, it stressed in its brief, with only scant ties to that state.

2022 Decision

Without deciding whether Delaware actually has an interest in its law being applied, Superior Court Judge Patricia A. Winston invoked her state’s 2022 decision in Ace American Insurance Co. v. Rite Aid Corp., finding no California or Idaho holding to the contrary. There, insurance policies (materially the same as those relied upon by Albertson’s) read:

“We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘personal injury’ or ‘property damage’ to which the insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages. However, we will have no duty to defend the insured against any ‘suit’ seeking damages for ‘personal injury’ or ‘property damage’ to which this insurance does not apply.”

Rite Aid sought coverage under the policies in defending actions but against, starting in 2018, alleging that it failed “to identify suspicious orders of prescription opioids, maintain effective controls against diversion, and halt suspicious orders when they were identified, thereby contributing to the oversupply of such drugs and fueling an illegal secondary market.”

Delaware Decision

The Delaware Supreme Court held in Rite Aid, in an opinion by Chief Justice C.J. Seitz Jr.:

“Three classes of plaintiffs are within the scope of the insured’s personal injury coverage—the person injured, those recovering on behalf of the person injured, and people or organizations that directly cared for or treated the person injured. To recover under the insured’s policy as a person or organization that directly cared for or treated the injured person, the plaintiff must prove the costs of caring for the individual’s personal injury. Here the plaintiffs, governmental entities, sought to recover only their own economic damages, specifically disclaiming recovery for personal injury or any specific treatment damages. Thus, the carriers did not have a duty to defend Rite Aid under the governing insurance policy.”

On the heels of the decision in Rite Aid came by one in 2025 from the same court in In re CVS Opioid Insurance Litigation also holding that there was no coverage to a drug store chain in connection its role in the opioid crisis.

Winston wrote:

“At bottom, Albertsons disagrees with Rite Aid and CVS and asks the Court to predict that California and Idaho will also disagree. Absent contrary California or Idaho authority, that prediction is not warranted. Because there is no coverage under settled Delaware law, the Insurers are entitled to summary judgment.”

Albertson’s Brief

Albertson said in Friday’s brief that the “Insurers, terrified by the mounting costs of the lawsuits they had contractually agreed to cover, rushed to the Courts of this State, where, despite having no meaningful connection to any party apart from incorporation status, they hoped to take advantage of this Court’s rulings” in Rite Aid and CVS. Disputing Winston’s conclusion that California law is the same as Delaware’s, the appellant pointed to a 2022 decision by U.S. District Court Judge Jacqueline Scott Corley of the Northern District of California in AIU Insurance Co. v. McKesson Corp., noting that “[t]he court there explicitly criticized Rite Aid, finding the insurers’ reliance on the case ‘unpersuasive.’ ”

Granting partial summary judgment on favor of a pharmaceutical and against three insurers, Corley declared that she “is not persuaded that the California Supreme Court would agree with Rite Aid’s interpretation of the insurance policy language.”

The judge made note of the dissenting opinion in Rite Aid, which says:

”I disagree with the Majority’s view that the policy covers only personal injury claims asserted by the person injured, a person recovering on behalf of the person injured, or people or organizations that treated the person injured or deceased, who demonstrate the existence and cause of the injuries. The policy does not contain such language. The policy covers damages claimed by any organization for the care of a person injured by Rite Aid.”

Agreeing with that dissent, by Justice James Vaughn Jr., Corley said:

“Nothing in the policy language limits coverage to claims asserted by the person injured, a person recovering on behalf of the person injured, or an organization that treated the person injured and demonstrates the existence and cause of the ‘specific’ injuries….Rather, the policies cover damages claimed by any organization for care resulting at any time from the bodily injury.”

Appellant’s Contention

The brief filed Friday sets forth:

“Given the peculiar facts of this case and the wide-ranging implications of its decision, the Superior Court should not have fixated on whether a foreign court would rule differently than a Delaware court, but, rather, whether the foreign court could rule differently and, if so, whether Delaware’s concern for comity warrants application of the foreign law. At minimum, the Superior Court should have proceeded with a full choice of law analysis, including full consideration of whether the foreign courts would have applied the same insurance law principles that this Court articulated in Rite Aid and CVS….[I]t is doubtful that either California or Idaho would have followed this Court’s decisions in Rite Aid or CVS.

“Accordingly, a choice of law analysis could have led to a result that differs from the holding of the trial court.”

The case is Albertsons Companies, Inc. v. Ace American Insurance Company, 2122026.