Supreme Court of California Grants Review of Emergent Class Action Case

On February 28, 2018, the Supreme Court of California granted the petition of Emergent LLP client James Noel to review the appellate decision denying certification of his class action lawsuit against Rite Aid, which sold Noel and 20,000 other California consumers an inflatable “Ready Set Pool” using packaging that deceptively exaggerated the size of the pool.  A copy of the petition, which includes photographs of the pool and packaging, is here.

The Supreme Court’s decision on Noel’s petition could affect numerous class actions brought under California’s consumer protection laws.  Rite Aid argued, and the appellate court agreed, that a class of pool purchasers could not be certified, because Noel had not shown that Rite Aid’s records contained enough contact information for the court to personally notify each class member of the lawsuit. 

This rationale would apply to every consumer class action and, Noel argued, would spell the end of consumer class actions in California.  Large retailers and manufacturers often do not retain individualized data about the sales of their products, and if consumer class actions could be defeated by an absence of contact information, companies likely to be sued for deceptive advertising, defective products, or any other mass consumer harm could insulate themselves by purging their purchase records or anonymizing those records so they retained the demographic information companies use to target their advertising, but eliminated the identifying information that would permit a class action.

The parties will submit their briefs to the Court between March and May, and the Court will then set a date for argument, likely in 2019.  Emergent partners Peter Roldan and Christopher Wimmer represent the late Noel, who passed away in 2016, and his widow.

Emergent LLP has an active appellate practice, representing parties in the Court of Appeals for the Ninth Circuit, California Court of Appeal, and Supreme Court of California, as well as amici curiae in the Supreme Court of the United States.  To find out whether Emergent can handle your appeal, contact us.

Emergent Partner Peter Roldan Argues High Profile D&O Insurance Appeal in the Ninth Circuit

Emergent LLP partner Peter Roldan represents corporate and individual policyholders in insurance coverage and bad faith litigation.  On February 13, Peter appeared before the Ninth Circuit for oral argument in HotChalk, Inc. v. Scottsdale Ins. Co., a much-discussed case that commentators believe “is likely to shape the scope of professional services exclusions.”  Law360 named it one of the three key D&O insurance cases to watch in 2018. 

Appearing on behalf of Emergent’s client, HotChalk, Inc., a leading online education platform that serves universities and students across the United States, Peter advocated for a reversal of the district court’s holding that HotChalk could only be liable for the claims alleged against it because of the professional services that it provided, even if, as was the case here, there was only a minimal causal connection or incidental relationship between the claim and HotChalk’s professional services.  This standard, if upheld, would essentially eviscerate D&O coverage for HotChalk and other professional service companies.

Peter argued that the professional services exclusion should only apply to claims arising out of a company’s provision of services to its clients and customers, and that it was not meant to exclude claims arising out of an insured’s internal business practices and management decisions.  Otherwise, professional service companies would find that their coverage was effectively swallowed up by the exclusion because almost everything they do is in some way tied to the services they provide.

Video of Peter's argument is available through the Ninth Circuit's YouTube channel.

Emergent also received support from policyholder advocacy group United Policyholders, which filed an amicus brief in connection with the appeal, seeking to reverse the trend of insurers stretching the professional services exclusion beyond its intended scope.

Peter's Ninth Circuit oral argument is the second Emergent partners have presented in the past three months; over that same period, the firm also argued two cases before the California Court of Appeal.  To find out whether Emergent can handle your appeal, contact us.

Legal Press Cover Emergent's Growth

In late January, Emergent LLP announced the addition of Patricia Ronan and Mikhail Ratner to the firm, along with the expansion of Emergent's New York office, the opening of its Phoenix office, and the launch of its employment practices group.  Since then, a number of legal publications have taken notice, including the New York Law Journal, Attorney at Law, Reuters, and Global Banking and Finance.

Emergent offers clients advice and counseling of the highest quality by attorneys with elite legal education and big firm training, on flexible fees well below big firm rates.  To find out if Emergent can help you, contact us.

Emergent Expands in New York and Arizona with Seasoned Litigators Mikhail Ratner and Patricia Ronan

Continuing its steady growth, Emergent LLP announces new partners, new offices, and new client services to start 2018.

Mikhail Ratner has joined Emergent as a partner, leading the firm’s New York commercial litigation and business advice practices in its new offices at 48 Wall Street.  Mikhail specializes in federal and state business litigation matters ranging from shareholder rights and corporate dissolutions to real estate and e-commerce disputes. His 17 years of experience bridge large and small business interests.

Patricia E. Ronan, an accomplished trial and appellate lawyer with 16 years of experience in the state and federal courts of multiple states, will head the opening of Emergent's newest office in Phoenix, Arizona.  Barred in New York, California, and Arizona, Patricia will also lead the firm’s new employment law and civil rights practice areas in all three states.

Mikhail and Patricia are both Columbia Law School alumni.  Prior to joining Emergent, Mikhail worked with several prominent New York firms, including Paul, Weiss, Rifkind, Wharton & Garrison LLP and Herrick Feinstein LLP before founding his own practice. While at Paul Weiss, Mikhail spearheaded the firm’s representation of 9/11 survivors and families before the federal Victim Compensation Fund, securing awards totaling $120 million.

Patricia also worked for almost a decade at prominent New York firms before joining Emergent, including Paul Weiss and Kramer Levin Naftals & Frankel LLP.  After relocating to Arizona in 2011, Patricia worked with a number of small firms before founding her own practice.

Mikhail and Patricia widen Emergent's array of litigation and transactional client services, strengthen the firm’s presence in New York, and open new frontiers in the Southwest.

Get in touch with Mikhail or Patricia, or contact us, to find out how Emergent LLP can help you.

In Broad Terms, California Court of Appeal Finds No Insurance Coverage in Opioid Lawsuit

Emergent LLP partner Peter Roldan represents corporate and individual policyholders in high-value insurance coverage and bad faith litigation, including a significant pending appeal before the Court of Appeals for the Ninth Circuit.  Below, he discusses a recent California Court of Appeal decision rejecting coverage for a drug manufacturer sued for causing addiction and other harms of the opioid crisis, in terms that insurers are likely to apply broadly to future claims.  If you believe your insurer is resisting paying your insurance claim, email Peter ( or contact us.

Sued for Promoting Opioids, Drug Manufacturer Actavis Is Denied Coverage by Its Insurer

Well before the nation’s opioid crisis was declared a public health emergency by President Trump, numerous states, counties, and municipalities were launching investigations and bringing lawsuits against the pharmaceutical manufacturers and distributors who are alleged to be responsible for the epidemic.  In defending against these actions, the targeted companies have sought coverage under their commercial general liability (“CGL”) insurance policies for their mounting defense costs and for indemnity against any judgments, while insurers have sought to limit their duties.

The question of whether insurance coverage exists for these suits was recently addressed by the California Court of Appeal in Traveler’s Property Casualty Co. of America v. Actavis, Inc., No. GO53749, 2017 WL 5119167 (Nov. 6, 2017).  The court concluded that Travelers had no duty to defend various pharmaceutical manufacturers who were alleged to have engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to increase sales of opioid products.

The County of Santa Clara and the County of Orange brought a lawsuit against Actavis and other pharmaceutical companies who were involved in promoting opioid products for treatment of long-term chronic pain (the “California Action”).  The City of Chicago brought a separate action making essentially the same allegations (the “Chicago Action”). Travelers, which insured Actavis, Inc. and other related companies under a series of CGL policies issued by Travelers and St. Paul Fire and Marine Insurance Co., denied that it had any duty to defend Actavis in either action and brought a lawsuit to obtain a declaration that it had no obligation to defend or indemnify Actavis.

Actavis had purchased primary CGL policies from St. Paul which covered “damages for covered bodily injury or property damage” that are “caused by an event.”  “Event” is defined as an “accident, including continuous or repeated exposure to substantially the same general harmful conditions.”  Actavis was also covered under a series of policies issued by Travelers, which covered damages “because of ‘bodily injury’ or ‘property damage’ “caused by an “occurrence.”  “Occurrence” is also defined as an “accident, including continuous or repeated exposure to substantially the same general harmful conditions.”  Both sets of policies also contained products and completed work exclusions, which applied to bodily injury or property damage “arising out of” Actavis’ products and work, including statements or representations about the durability, fitness, handling, maintenance, operation, performance, quality, safety or use of its products.

Court Finds No Duty to Defend, Because Manufacturer’s Alleged Scheme Was Not an “Accident”

After a bench trial on stipulated facts, the trial court found (1) the California Action and the Chicago Action did not allege an “accident” as required by the definition of “occurrence” or “event” to create a duty to defend and (2) the products/work product exclusions precluded coverage for Actavis’ claims. 

The Court of Appeal agreed, finding that the allegations that Actavis engaged in “a common, sophisticated, and highly deceptive marketing campaign” aimed at increasing sales of opioid products could only be characterized as deliberate, intentional acts, meaning that they did not constitute an accident under a CGL policy.  The court then turned to the question of whether “some additional, unexpected, independent, and unforeseen happening” produced the injuries alleged in the California and Chicago Actions, or if the injuries were a direct result of the “flood of opioids that entered the market” as a result of Actavis’ marketing campaign.  It then concluded that the injuries, which included “(1) a nation ‘awash in opioids’; (2) a nationwide ‘opioid-induced “public health epidemic’”; (3) a resurgence in heroin use; and (4) increased public health care costs imposed by long-term opioid use, abuse, and addiction,” was not additional, unexpected, independent, or unforeseen.

Opioid Crisis Not a Normal Consequence; Misprescription Not an Independent Cause

The court rejected Actavis’ argument that the alleged injuries were not the “normal consequences of the acts alleged” and found that in order for Actavis’ opioid products to end up in the hands of abusers, it was necessary for doctors to prescribe the drugs to abusers.  The court noted that the role of doctors in prescribing or misprescribing drugs was not an independent or unforeseen happening.

Addiction Is a Bodily Injury, But a Result of Actavis’s Products, and So Excluded under the Policy

Although the trial court did not reach the question of whether the harms alleged in the California and Chicago Actions constituted “bodily injury,” the Court of Appeal found that the actions alleged two categories of such injuries: (1) overdose, addiction, death, and long-term disability arising out of the use and abuse of opioids; and (2) the resurgence of the use and abuse of heroin, which was allegedly triggered by use and misuse of opioids.  However, the court, applying a broad interpretation of the term “arising out of,” found that these two categories of injury “arose” out of Actavis’ opioid products.  Therefore, the claims—including the claims of injury due to heroin abuse—were excluded under the products exclusions contained in the Travelers and St. Paul policies.  The court also examined the split in federal and out-of-state authorities regarding the issue of whether products exclusions only applied to an insured’s defective products.  It agreed with the analysis of the Florida Supreme Court in Taurus Holdings v. U.S. Fidelity, 913 So. 2d 528 (Fla. 2005), which found that the products exclusion was not limited to defective products.

Policyholders Will Likely Need Assistance with Claims Arising from Opioid Lawsuits

The Court of Appeal’s decision will likely embolden liability insurance carriers to deny the claims of defendants in opioid lawsuits, unless the policyholders can distance themselves from manufacturing activities and from any allegedly deceptive marketing campaigns.  Otherwise, relying on the Actavis case, insurers will likely take the position that coverage is barred either because there is no “occurrence” or because liability arises out of the insured’s products (unless separate products/completed operations coverage exists).

For policyholders in general, the decision is a reminder to carefully examine all lawsuits to determine whether the basis for a covered “accident” exists, as this will always depend on the specific facts alleged in the complaint.  Furthermore, although the Actavis court applied a broad interpretation of the phrase “arising out of” in the context of an exclusion, California courts continue to be divided on this issue, and the question of whether a broad or narrow interpretation of this key phrase should apply is also likely to remain a fact-dependent issue.  To get the value out of your policy, be sure to have your claim reviewed by an experienced attorney who understands policy interpretation well.

Emergent LLP Partner Peter Roldan Publishes Article on Potential Conflicts in Insurer-Funded Defenses

Emergent LLP partner Peter Roldan represents corporate and individual policyholders in insurance coverage and bad faith litigation.  In the most recent edition of the Bar Association of San Francisco's Bulletin, Peter has published an article addressing potential conflicts for policyholders to bear in mind when they are defended by counsel paid for by their insurer.

Read the article at the link here.  Email Peter ( or contact us to learn more about how Emergent LLP enforces its clients' legal and contractual rights.