Arkansas Appeals Court Keeps Walmart’s Opioid Defense Bill on Its Insurers

Writing for a unanimous three-judge panel on October 7, Judge Cindy Grace Thyer held that Walmart’s insurers must defend more than 2,400 opioid lawsuits. Her Arkansas Court of Appeals opinion affirmed a Benton County Circuit Court order requiring that defense. She wrote that the central allegation against Walmart’s retail pharmacy was that it “failed to put proper controls in place to find and report suspicious opioid orders.” The primary insurers said that was no “accident.” The court held that the complaints alleged one. Whether the insurers owe money toward settlements was outside this appeal.

The allegation the insurers could not get past

The underlying suits came from individuals, state attorneys general, municipalities, and healthcare entities. Some are in state courts. Others were grouped in federal litigation in the Northern District of Ohio. According to the opinion, the plaintiffs allege that Walmart contributed to the opioid crisis through its sale and dispensing of medications. The appellate court did not decide those allegations.

Walmart brought its coverage case in the Benton County Circuit Court in November 2022, seeking, among other declarations and damages, a declaration that more than thirty insurers had to pay for its defense. In Walmart’s April 2023 motion, as described in the opinion, the company pointed to representative policies and complaints. Its primary insurers, American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, PA, argued that the complaints did not allege an “accident.” The excess insurers also sought a ruling that their policies provided no duty to defend.

That argument put the wording of the complaints at center stage. The policies defined an occurrence as an accident. The primary insurers argued that allegations of intentional misconduct could not meet that definition. The opinion started from settled Arkansas law: “The duty to defend is broader than the duty to indemnify.” The opinion quoted language found in several complaints alleging failures to maintain controls, investigate suspicious orders, and guard against diversion.

The court held that the gravamen of the complaints was a lack of reasonable care, not intentional malfeasance. It also rejected the idea that intentionally filling prescriptions necessarily meant Walmart expected the injuries alleged in the suits. An intentional act could produce an unintended result, the opinion reasoned. The complaints therefore alleged an accident sufficient to trigger a defense.

The phrase that reached public claims

The excess insurers had a separate argument. They said the damages sought were not “because of ‘bodily injury’” and read the policy language to cover only specific injuries to a specific person.

The court read the policy language more broadly. It said damages because of bodily injury include damages claimed by “any person or organization for care, loss of services, loss of support or death” resulting from the injury. The court held that an organization can claim financial damages under that wording even though the organization has no body of its own.

That reading mattered because, according to the opinion, governmental plaintiffs sought costs tied to emergency responses, addiction treatment, and other responses to alleged injuries. Healthcare plaintiffs sought uncompensated treatment costs. The appellate court held that the complaints presented the possibility of damages because of bodily injury. It also noted that some policies expressly excluded certain government claims involving firearms or pollution, but contained no comparably clear exclusion for the government bodily injury claims at issue here.

The Benton County Circuit Court order, as described by the appellate court, required a defense. The appellate court left that order in place. **Analysis:** For the legal and claims teams tracking this litigation, the ruling places the cost of defending the underlying suits with the insurers at issue. It does not establish payment for Walmart’s 2022 settlement with certain states and governing subdivisions. The opinion gives no settlement amount.

QBE’s route out closed too

QBE Insurance Corporation pursued a different route: arbitration. Its policies formed half of a quota share layer with Endurance, and QBE argued that it had adopted Endurance’s arbitration and New York law provisions. In QBE’s motion to compel arbitration, as described in the opinion, it asked to move its dispute out of court.

The policy record did not carry that argument. One QBE policy identified an Endurance policy that was absent from the record. For the other, the appellate court read QBE’s incorporation language as adopting terms that restricted coverage, not Endurance’s choice of law or arbitration terms. The appellate court gave a separate reason for affirming the denial of arbitration: under Arkansas law, an arbitration clause in an insurance contract is void. It also held that a further argument QBE raised on appeal had not been preserved below.

Walmart won an order requiring its insurers to defend the opioid suits, then kept that order on appeal. QBE did not move its dispute to arbitration. Nothing in the October 7 opinion in No. CV-24-417 addresses a request for rehearing or further review. The defense bill has an answer. The settlement bill does not.

Sources

Arkansas Court of Appeals, ACE American Insurance Co. et al. v. Walmart, Inc., No. CV-24-417, opinion, October 7, 2026.

Benton County Circuit Court, No. 04CV-22-2835, order dated nunc pro tunc to December 29, 2023, as described in the appellate opinion.

Benton County Circuit Court, No. 04CV-22-2835, QBE motion to compel arbitration, June 30, 2023, as described in the appellate opinion.