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E.R. SQUIBB & SONS v. ACCIDENT & CAS. INS. CO.

February 9, 1995

E.R. SQUIBB & SONS, INC., Plaintiff, against ACCIDENT AND CASUALTY INSURANCE CO., et al., Defendants.


The opinion of the court was delivered by: VINCENT L. BRODERICK

 VINCENT L. BRODERICK, U.S.D.J.

 I

 This litigation involves controversies between E.R. Squibb & Sons ("Squibb"), a pharmaceutical manufacturer, and a number of its insurers in connection with product liability claims against Squibb arising out of injuries incurred by users of the product diethylstilbestrol ("DES").

 This case has generated three decisions on motions concerning the merits. A memorandum order dated April 21, 1992, ER Squibb & Sons v. Accident & Cas Ins Co, 1992 WL 7327, 1992 U.S. Dist. LEXIS 6255 (SDNY 1992), granted partial summary judgment to Squibb concerning criteria for liability for defense costs. A memorandum order dated May 20, 1994, ER Squibb & Sons v. Accident & Cas Ins Co, 853 F. Supp. 98 (SDNY) granted partial summary judgment in favor of Squibb concerning several issues regarding liability for underlying indemnification and denied the application of several defendants for dismissal of the case for lack of a case or controversy under Article III of the Constitution. A further memorandum order dated July 28, 1994, ER Squibb & Sons v. Accident & Cas Ins Co, 860 F. Supp. 124 (SDNY) responded to defendants' motion for reconsideration of, and for clarification of several points discussed in, the May 1994 order.

 By motion filed December 9, 1994 defendant Utica Mutual Insurance Company ("Utica") seeks a summary judgment in its favor on the ground that Utica's policy issued to Squibb concerning DES will never become the basis for required payment to Squibb.

 Utica's motion is denied.

 II

 Utica's motion is based upon its interpretation of its excess insurance policy, issued September 23, 1970 and cancelled effective January 1, 1971, as requiring Squibb or a lower-tier carrier to satisfy a high deductible ($ 5.3 million as calculated by Utica's counsel) regardless of exhaustion of underlying policies, and the assumption that it is so unlikely that such a deductible can ever be satisfied that the disputes involved in this litigation do not rise to the level of a case or controversy under Article III.

 The pertinent policy language is as follows:

 * * *

 Item 3. LIMIT(S) OF COVERAGE HEREUNDER:

 $ 1,250,000. each and every occurrence covering Personal Injury and/or Property Damage Liability or both combined subject to annual aggregate limits of $ 1,250,000. for Products Personal Injury and $ 1,250,000. for Products Property Damage Liability part of $ 5,000,000. for each and every occurrence covering Personal Injury or Property Damage Liability or both combined subject to annual aggregate limits of $ 5,000,000. for Products ...


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