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Week Ahead in Insurance: Oct. 18, 2021

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(Reuters) - (Reuters) - Here are some events of interest to the Insurance Law community this week. All times are local unless otherwise noted.

Tuesday, Oct. 19

10 a.m. - U.S. Bankruptcy Judge Laurie Selber Silverstein in Delaware has scheduled a status hearing on discovery issues for parties who intend to participate in the Jan. 24 confirmation hearing for the Boy Scouts of America’s reorganization plan, including Century Indemnity, The Hartford, and multiple other insurers. The insurers and the official Tort Claimants Committee sought to postpone the confirmation hearing and interim deadlines to allow for additional discovery, but Silverstein overruled their objections on Oct. 8. Silverstein last month approved the disclosure statement to be sent to creditors and about 82,500 sex-abuse claimants, outlining the plan to create a fund of at least $1.8 billion and to pay claimants amounts ranging from $3,500 to $2.7 million. The case is In re Boy Scouts of America, U.S. Bankruptcy Court for the District of Delaware, No. 20-10343. For the Boy Scouts: Jessica Lauria of White & Case; Derek Abbott and Paige Topper of Morris, Nichols, Arsht & Tunnell. For Hartford: James Ruggeri of Shipman & Goodwin; Philip Anker of Wilmer Cutler Pickering Hale and Dorr; Erin Fay and Gregory Flasser of Bayard. For Century Indemnity: Stamatios Stamoulis of Stamoulis & Weinblatt and Tancred Schiavoni of O’Melveny & Myers. For the TCC: James Stang and James O'Neill of Pachulski Stang Ziehl & Jones.

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Wednesday, Oct. 20

10 a.m. – U.S. District Judge R. David Proctor in Birmingham, Alabama, will commence the final fairness hearing on the proposed $2.67 billion settlement of the Blue Cross Blue Shield consumer (subscriber) antitrust cases, continuing on Oct. 21 if necessary. The plaintiffs in the 2013 multidistrict litigation alleged that Blue Cross Blue Shield Association and its 36 member companies divided up health insurance markets to avoid competing with each other. Proctor granted the settlement preliminary approval in November. The settlement provides formulas for distributing $1.9 billion to the settling plaintiffs, with $107 million set aside for a Notice and Administration Fund and expenses, and $667 million, combined, for attorneys’ fees and expenses. BCBS has also agreed to allow member companies to compete with each other and to earn more revenue from “non-Blue” services. The case is In Re Blue Cross Blue Shield Antitrust Litigation (MDL 2406), U.S. District Court for the Northern District of Alabama No. 13-20000. For the settlement class: Michael Hausfeld of Hausfeld LLP and David Boies of Boies Schiller Flexner. For Self-Funded Subclass: Warren Burns of Burns Charest. For BCBS Association: David Zott, Kirkland & Ellis.

4 p.m. – ACE Property and Casualty Insurance and an AIG unit must respond to McKesson Corp.’s claims that they have a duty to defend it against thousands of federal lawsuits consolidated in the National Prescription Opiate Litigation MDL and hundreds of similar suits filed in state courts. The insurers initiated the litigation last year in federal court in San Francisco, seeking declaratory judgments that they owed no duty to defend or indemnify McKesson for allegedly contributing to the opioid crisis. McKesson counterclaimed for breach of contract in November, days after reaching a settlement in the MDL under which it agreed to pay about $8 billion over the next 18 years. McKesson is now seeking partial summary judgment solely on the duty to defend, alleging that its legal bills have already topped more than $270 million. The lead case is AIU Insurance and National Union Fire Insurance of Pittsburgh PA v. McKesson Corp., U.S. District Court for the Northern District of California, No. 20-7469. For AIG’s National Union: Christopher St. Jeanos of Willkie Farr and Gallagher; Richard Doren of Gibson, Dunn & Crutcher. For ACE: Michael Shuster and Daniel Sullivan of Holwell Shuster & Goldberg. For McKesson: Gretchen Hoff Varner of Covington & Burling.

Friday, Oct. 22

9 a.m. – The 6th U.S. Circuit Court of Appeals will hear a Michigan dentist’s claim that his all-risk property insurance policy covered his loss of two months’ income last year due to executive orders that barred all non-emergency medical procedures in an effort to reduce the spread of Covid-19. A federal judge in Eastern Michigan dismissed Dr. Richard Kirsch’s lawsuit against Aspen American Insurance Co. in December, finding the shutdown orders did not cause “direct physical damage,” defined in the policy as “partial or total loss of or damage to” the covered property. Michigan courts have never interpreted that language, and Kirsch argues that it includes loss of use. A different 6th Circuit panel rejected that interpretation in a similar case in September, applying Ohio law. The dentist’s appeal is Kirsch v. Aspen American Ins. Co., 6th U.S. Circuit Court of Appeals No. 21-1038. For Kirsch: Philip Miller and Nathan Fink of Fink Bressack. For Aspen American: Tacy Fletcher Flint of Sidley Austin.

2 p.m. – The respondents' brief is due in the U.S. Supreme Court from people with HIV/AIDS, who allege that CVS Pharmacy and pharmacy benefits manager Caremark discriminated against them by requiring ERISA-plan participants to use CVS or its mail-order pharmacy to get the in-network price for the highest-cost tier of drugs. The 9th U.S. Circuit Court of Appeals found the “John Doe” parties had stated a claim for discrimination under the Affordable Care Act. CVS argues that the ACA only allows individuals to sue for intentional discrimination – not facially neutral practices that have a disparate impact on people with disabilities. The Supreme Court granted CVS’s petition for review in July and has scheduled argument for Dec. 7. The case is CVS Pharmacy et al. v. John Doe One et al., U.S. Supreme Court No. 20-1374. For CVS: Lisa Schiavo Blatt of Williams & Connolly. For John Doe One et al.: Gerald Sinclair Flanagan of Consumer Watchdog

Know of an event that could be included in Week Ahead in Insurance Law? Contact Alexia Garamfalvi at alexia.garamfalvi@thomsonreuters.com

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