Travelers Casualty & Surety Co. is suing Becton Dickinson & Co. (NYSE:BDX) over a $67 million claim related to BD’s losses in a string of anti-trust lawsuits filed over its alleged monopolization of the hypodermic needle market, seeking to have a judge declare that the insurance company isn’t bound to cover the losses.
Becton was the defendant in 9 purported class action lawsuits brought by distributors and hospitals alleging that the Franklin Lakes, N.J.-based healthcare giant "engaged in conduct violative of federal antitrust laws that resulted in inflated prices for Becton’s products" and "illegally acquired a monopoly over the sale of various hypodermic products by (1) imposing market share purchase requirements on hospitals or other healthcare entities, (2) bundling its good for exclusionary purposes, and (3) conspiring with other manufacturers to impose rebate penalties on purchasers relating to the bundle of products," according to court documents.
In 2009, Becton agreed to settle the distributors’ claims for $45 million; the hospital lawsuits were settled for $22 million in July 2013, according to the documents. In December of that year Becton notified Travelers of the lawsuits, demanding "that its defense costs be paid and that it be indemnified for the settlements by Travelers," according to the complaint.
"After having kept Travelers entirely in the dark, Becton now inexplicably claims Travelers must pay both Becton’s accumulated defense costs from the underlying lawsuits and the $67,000,000 in payments Becton made to settle them. However, Becton’s unjustifiable breach of its policy obligations – to provide Travelers with requisite notice of underlying lawsuits, to cooperate with Travelers, and to refrain from making voluntary payments without Travelers’ consent – precludes any insurance coverage for these sums," according to the lawsuit. "And, even had Becton complied with those obligations, the underlying lawsuits do not, as Becton contends, involve Becton’s commission of any ‘advertising injury’ offense in the course of its advertising activities."
The insurance company wants a judge in the U.S. District Court for Western Washington to issue a declaration that "it has no obligation to defend or indemnify Becton in connection with the underlying lawsuits" and "that Becton has breached its contracts with Travelers and has accordingly forfeited any right it might otherwise have had to insurance coverage from Travelers in connection with the underlying lawsuits," according to the complaint.
