RICHARD L. YOUNG, Chief Judge.
Plaintiff, National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), issued Commercial General Liability Policy No. GL 090-72-27 to Mead Johnson Nutrition Company for the policy period February 10, 2009 to February 10, 2010 (the "National Union Policy" or "Policy"). In the present case, National Union seeks a declaration that it had no duty to defend or indemnify Mead Johnson & Company and Mead Johnson Nutrition Company ("Mead Johnson"), its insured, in connection with ten consumer class action lawsuits ("Consumer Lawsuits") filed by consumers ("Consumer Plaintiffs") of Mead Johnson's Enfamil LIPIL® ("Enfamil") infant formula during the Policy period. These were eventually consolidated and transferred to the Southern District of Florida in a case entitled In re: Enfamil Lipil Marketing & Sales Practices Litigation, Case No. 11-MD-02222-COHN/SELTZER. (See Defendants' Ex. 18). The court approved settlement of the consolidated action on November 14, 2011. (Id.).
The Consumer Lawsuits were filed after PBM Products, LLC ("PBM"), a manufacturer of "store brand" infant formula, filed a lawsuit against Mead Johnson captioned PBM Products, LLC v. Mead Johnson Nutrition Co., No. 09-cv-269 (E.D.Va.) (the "PBM Lawsuit"). In its Complaint filed on April 27, 2009, PBM claimed that Mead Johnson's Enfamil LIPIL® advertisements
The Consumer Lawsuits filed by the Consumer Plaintiffs rely on and reference the PBM Lawsuit and, in fact, reference the same comparative advertising for Enfamil that PBM identified in its pleading. (See generally, Defendants' Exs. 5-14). The Consumer Plaintiffs generally allege that they did not purchase "generic" or "store brand" infant formula because of Mead Johnson's false and misleading advertisements touting Enfamil LIPIL® as the only infant formula with DHA and ARA. (Id.). The Consumer Plaintiffs allege that other less expensive store brands and private label products contain the same amounts of DHA and ARA as Enfamil. (Id.). The Consumer Plaintiffs seek damages from Mead Johnson for their alleged overpayments for infant formula, as well as injunctive and other equitable relief, including the disgorgement of Mead Johnson's profits. (Id.).
Mead Johnson contends the claims asserted in the Consumer Lawsuits implicate "personal and advertising injury" coverage under the National Union Policy and that therefore, National Union owed it a duty to defend and indemnify with respect to the Consumer Lawsuits. National Union claims the Consumer Lawsuits are not covered by the Policy, and moves for summary judgment on that ground. For the reasons set forth below, the court
Summary judgment should be entered if the record shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). The interpretation of an insurance policy is a question of law; therefore, disposition on summary judgment is particularly appropriate. Bradshaw v. Chandler, 916 N.E.2d 163, 166 (Ind.2009).
The provisions of an insurance contract are subject to the same rules of interpretation and construction as are other contract terms. Gallant Ins. Co. v. Oswalt, 762 N.E.2d 1254, 1262 (Ind.Ct.App. 2002) (citation omitted); Bosecker v. Westfield Ins. Co., 724 N.E.2d 241, 243 (Ind. 2000). The court's primary objective in construing the language of a contract is to ascertain and enforce the parties' intent as expressed in the language of the contract. Cotton v. Auto-Owners Ins. Co., 937 N.E.2d 414, 416 (Ind.Ct.App.2010). To that end, the court "`construe[s] the policy as a whole and consider[s] all of the provisions of the contract, not just individual words, phrases, or paragraphs.'" Id. (quoting Gregg v. Cooper, 812 N.E.2d 210, 215 (Ind.Ct.App.2004), trans. denied). Where the terms of a policy are clear and unambiguous, as in this case, the court applies their plain and ordinary meaning. Id. (citation omitted).
Under Indiana law, an insurer's duty to defend is much broader than the duty to indemnify. Seymour Manuf. Co., Inc. v. Commercial Union Ins. Co., 665 N.E.2d 891, 892 (Ind.1996) (citing Trisler v. Indiana Ins. Co., 575 N.E.2d 1021, 1023 (Ind.Ct.App.1991)); Monroe Guaranty v. Monroe, 677 N.E.2d 620, 624 (Ind.Ct.App. 1997) (citations omitted). It is the nature of the claim that defines an insurer's duty to defend, not the merits of the claim. Trisler, 575 N.E.2d at 1023. "Consequently, if it is determined that an insurer has a contractual duty to defend a suit based upon risks it has insured, the insurer will not be relieved of that obligation, regardless of the merits of the claim." Id. (citing Cincinnati Ins. Co. v. Mallon, 409 N.E.2d 1100, 1105 (Ind.Ct.App.1980)).
An insurer's duty to defend is determined by comparing the underlying factual allegations of the complaint with the relevant provisions of the insurance policy. Indiana Farmers Mut. Ins. Co. v. North Vernon Drop Forge, Inc., 917 N.E.2d 1258, 1272 (Ind.Ct.App.2009) (citing COUCH ON INSURANCE § 126:3 (3d ed. 2008) ("[T]he legal theory asserted by the claimant is immaterial to the determination of whether the risk is covered .... [A] claim clearly excluded from policy coverage cannot be turned into a covered risk by styling the pleadings to fit the policy language.")). A duty to defend is triggered when the underlying complaint alleges facts
The National Union Policy provides that the policy "`applies to personal and advertising injury' caused by an offense arising out of your business...." (Defendants' Ex. 2 at NU00013). The Policy defines "personal and advertising injury" to mean "injury ... arising out of one or more offenses," including an "[o]ral or written publication ... that slanders or libels a person or organization or ... disparages a person's or organization's goods, products, or services." (Id. at NU00021). The issue here is whether the allegations of the Consumer Plaintiffs' complaints fall within the "offense" of disparagement within the meaning of the National Union Policy. Mead Johnson bears the burden of proving that coverage is afforded under the Policy for that "offense." Erie Ins. Group v. Sear Corp., 102 F.3d 889, 892 (7th Cir.1996) (applying Indiana law); Rose Acre Farms, Inc. v. Columbia Cas. Co., 772 F.Supp.2d 994, 1000 (S.D.Ind. 2011) (applying Indiana law).
Mead Johnson argues that the Consumer Plaintiffs' complaints sufficiently allege that they suffered injury arising out of Mead Johnson's publication of materials that disparaged its competitors' lower-priced infant formula. For example, the Consumer Plaintiffs alleged that: (1) the Mead Johnson's advertising disparaged its competitors' products, (see, e.g., Defendants' Ex. 7 ¶ 25 ("As part of its deceptive marketing campaign, Mead Johnson has disparaged competing products, particularly
An identical argument was raised and rejected in BASF AG v. Great American Assurance Company, 522 F.3d 813 (7th Cir.2008). There, the insured sought defense from its umbrella insurers against numerous class actions which alleged that the insured had wrongfully asserted monopoly control over the market for the thyroid medication, Synthroid, by suppressing and later discrediting a doctor's study, the results of which found that Synthroid was no more effective than cheaper generic drugs. Id. at 817. The class action complaints alleged that the insured's wrongful control over the market resulted in consumers and health insurers paying higher prices for Synthroid rather than purchasing lower-cost, equally effective alternatives. Id. The insured argued that the class allegations potentially implicated coverage for injury arising out of the offense of "[o]ral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products, or services." Id. at 819-20.
The Seventh Circuit Court of Appeals reversed the district court's entry of summary judgment in favor of the insured, and found the umbrella insurers had no duty to defend the insured. The Court found that in order for the factual allegations of the class plaintiffs' complaints to sufficiently "sketch a claim for the common-law offenses of libel, slander, or disparagement" under Illinois law, they would have to allege that the false statements were made "about the plaintiff[s]." Id. at 820 (emphasis in original). The class plaintiffs' complaints, however, did not claim that the insured made defamatory, libelous, slanderous, or disparaging statements about the class members or their products. Id. The Court further found that, because Article III standing requires that a plaintiff
The Consumer Lawsuits were originally filed in Florida, Massachusetts, New Hampshire, Alabama, Colorado, and California; the MDL case was filed in the Southern District of Florida; and the present insurance dispute was filed here in Indiana. In all of those states, any defamatory or disparaging
In addition, like the class plaintiffs in BASF, the Consumer Plaintiffs would not have standing to bring a claim for disparagement. The Consumer Plaintiffs' Complaints do not allege that Mead Johnson disparaged them or their products; as noted above, their injury, if any, arises
For the reasons set forth above, National Union's Motion for Summary Judgment (Docket # 57) is