Tennessee Supreme Court To Livestream Video Conference Oral Arguments on September 2

September 1, 2020

The Tennessee Supreme Court has two cases set for its September 2, 2020 docket. These cases will be heard by video conferencing. The cases will be livestreamed to the TNCourts YouTube page at 9 a.m. and 10:30 a.m., respectively. The details of the cases are as follows:

  • Jared Effler, et al. v. Purdue Pharma L.P., et al.– This appeal involves the scope of Tennessee’s Drug Dealer Liability Act (“DDLA” or the “Act”). The Plaintiffs are two minor children, through their guardian ad litem, and a number of Tennessee District Attorneys General (“District Attorney Plaintiffs), in their own right and on behalf of local city and county governments.  The Plaintiffs allege liability against a group of pharmaceutical manufacturers and distributors (the “Manufacturer Defendants”), under the DDLA for their participation in over-prescribing and diverting prescription opioids in Tennessee. The Manufacturer Defendants filed a motion to dismiss in the trial court for failure to state a claim under the DDLA and challenged the District Attorney Plaintiffs’ standing to file the lawsuit. The trial court granted the motion to dismiss but did not reach the issue of standing. The Court of Appeals reversed, stating that the Act confers standing on district attorneys “to pursue DDLA claims on behalf of the political subdivisions within their respective judicial districts,” and that the the Plaintiffs’ complaint alleges “knowing participat[ion] in the diversion of opioids,” a claim for which relief may be granted under the Act. On appeal to the Tennessee Supreme Court, the Manufacturer Defendants continue to challenge the District Attorney Plaintiffs’ standing, arguing that the express language of the DDLA at most authorizes district attorneys general to represent a local government in a suit under the DDLA only if requested or retained by that locale to do so. Additionally, they argue that the DDLA does not apply to the “conduct of pharmaceutical manufacturers within the highly regulated market for FDA-approved medications.” The Manufacturer Defendants do not claim complete immunity under the DDLA in all circumstances. Rather, they argue that the Plaintiffs’ allegations do not suggest participation in the illegal drug market and no other jurisdiction has expanded liability to similarly situated parties. The Plaintiffs argue that the DDLA is consistent with the structure of the Act and its remedial purpose to allow district attorneys general to have standing in their own right, which does not create a conflict of interest or usurp the power of local governments. Additionally, the Plaintiffs argue that they have stated a valid claim under the DDLA because the Manufacturer Defendants have participated in the illegal distribution of their prescription drugs by knowingly or intentionally oversupplying opioids, allowing and encouraging doctors to write excessive prescriptions, supplying pharmacies and pain clinics engaged in illegal drug diversion, promoting opioids for long-term use, distributing opioids without effective diversion controls, and participating in a closed distribution system. Amicus curiae include Pharmaceutical Research and Manufacturers of America and American Tort Reform Association, the International Association of Defense Counsel, the State of Tennessee, and the Tennessee District Attorneys General’s Conference.
  • Talat Parveen et al. v. ACG South Insurance Agency LLC et al.– This case involves interpretation of a Tennessee statute that states: “payment of premium for an insurance contract . . . by an insured shall create a rebuttable presumption that the coverage provided has been accepted by all insureds under the contact.” The plaintiffs obtained Safeco motor vehicle insurance coverage in 2013 through an agent of ACG South Insurance Agency, LLC (“ACG”). The plaintiffs allegedly requested identical insurance coverage to their previous policy with State Farm, “including [the] total amount of uninsured/underinsured motorist coverage.” ACG’s agent obtained an insurance policy for the plaintiffs, but it did not include the uninsured/underinsured coverage as requested. The plaintiffs received the policy information and paid the premium for 2013, 2014, and 2015. In 2015, the plaintiffs filed an insurance claim following an accident with an uninsured driver. The insurance company denied the claim, reasoning that the plaintiffs’ insurance policy did not include “excess uninsured motorist coverage.” The plaintiffs brought suit against ACG and its agent (the “defendants”) alleging that the defendants were negligent in failing to obtain the coverage they requested, specifically an umbrella policy that included excess uninsured motorist coverage. The defendants moved for summary judgment on the theory that the plaintiffs failed to rebut the presumption that they accepted the insurance policy that did not include the uninsured/underinsured coverage upon payment of the insurance premiums under the statute. The trial court granted the defendants’ motion. The Court of Appeals reversed, holding that the statute only created a rebuttable presumption between the “parties to the contract,” meaning the insurance company and the insured. The court reasoned that the insurance agent was not a party to the insurance contract and therefore was not subject to the statutory presumption. On appeal to the Tennessee Supreme Court, the defendants argue that the statutory presumption applies in suits against insurance agents, based on principles of agency and the common law for contracts. The plaintiffs argue that the presumption does not apply to the agent’s actions in this case because the plain language of the statute, “under the contract,” limits the presumption to claims that are solely against insurer. Further, the plaintiffs argue that legislative history supports their interpretation that the presumption does not apply in this case.