” We review a grant of summary judgment in favor of Eli Lilly and Company in its declaratory judgment suit against various insurance companies. Eli Lilly’s suit concerns the scope of coverage for claims arising from the company’s manufacture and sale of the drug DES (diethylstilbestrol). The District Court determined that Indiana law controlled this diversity action and granted summary judgment for Eli Lilly on the basis of its interpretation of Indiana law. The insurance companies appeal.” …
ELI LILLY AND CO. v. HOME INS. CO., Leagle, 19851640764F2d876_11499, June 18, 1985.
… ” From 1947 to 1967, Eli Lilly was one of the major manufacturers and sellers of DES. As a result, more than six hundred lawsuits have already been filed against Eli Lilly for DES-related illnesses.
On March 9, 1982, Eli Lilly brought this declaratory judgment action against the various insurance companies that insured it from the time it first manufactured DES (1947) to the time insurance companies finally refused to insure DES risks (1976).
The declaratory judgment turns on the interpretation of Eli Lilly’s insurance policies. During the 29 years at issue, Eli Lilly was covered by some 242 insurance policies. The relevant clause of the policies appears in four slightly different versions. Three of the four versions define coverage in terms of an “injury” that “occurs” during the policy period. 2 Joint Appendix (JA) 96, 98, 99-100. The fourth version — reflected in 21 of the policies — refers to injuries “sustained” during the policy period. 2 JA 97. No party contends that these slight differences require different interpretations. See Joint Brief of Appellants-Defendants at 8-9; Brief of Appellee at 8-9. Furthermore, the “injury”/”occurrence” formulation is, in all material respects, identical to the insurance industry’s Comprehensive General Liability Policy (CGL) provision that has been in effect since the 1960’s.
The policies do not define the relevant terms with precision. For instance, in 199 of the 242 policies the insurance companies agreed to insure Eli Lilly for “personal injuries * * * caused by or arising out of each occurrence anywhere in the world.” 2 JA 96. “Personal injury” was defined in part, and not altogether helpfully, as “bodily injury, mental injury, mental anguish.” Id.”Occurrence” was defined, in turn, as “an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury … during the policy period.” Id. at 96-97. Our task is to interpret these terms with respect to claims arising from DES-related illnesses.
The determinative question is when the DES-related “injury” “occurs” for purposes of the policy. At least two possible time pegs are relevant:
- the time of exposure (when the DES mother ingested the DES),
- and the time of manifestation (when the DES daughter discovered her illness).
The insurance companies vigorously disagree as to which of these times should be relevant, but they have put that dispute aside for the present. Their argument in the current proceeding is that only one of those time pegs — exposure or manifestation — can be relevant; they will fight out later which one is relevant. Eli Lilly, in contrast, argues that the policies should be governed by what some courts have called the multiple trigger theory: the injury should be understood to have “occurred” at exposure, manifestation, and the period between the two while the disease was latent. ” …
… read the full paper ELI LILLY AND CO. v. HOME INS. CO., on Leagle.