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No injury? No insurance, a federal appeals court has ruled. The 7th U.S. Circuit Court of Appeals determined that insurers for a seller of sippy cups, baby bottles, nipples and other plastic products had no duty to defend the company in a multidistrict class action. Finding that the insurers were not responsible for defending Avent America Inc. in a so-called no-injury class action, a three-judge panel ruled that the lawsuit alleged only economic damages that Avent’s insurance didn’t cover. The court on July 15 affirmed a ruling in favor of Medmarc Casualty Insurance Co., State Farm Fire and Casualty Co. and Pennsylvania General Insurance Co. in the U.S. District Court for the Northern District of Illinois. The lawsuit involved 15 consolidated class actions brought by parents who claim that Avent failed to inform them of health risks posed by the leaching of bisphenol-A (BPA), a substance found in certain plastics and other products. At high levels, BPA has been associated with early puberty, obesity, cancer and neurological damage. Philips Electronic North America Corp. is the successor in interest to Avent. The insurance law issue appeared to be one of first impression for the federal appeals courts. William Savino, representing Medmarc and Pennsylvania General, said that he was unaware of any other federal appeals court decisions addressing an insurer’s duty to defend no-injury product liability lawsuits alleging economic loss. Savino is managing partner of Rivkin Radler in Uniondale, N.Y. The 7th Circuit decision, written by Judge Joel Flaum, found that the insurers had no duty to defend Avent because its policies covered only bodily injuries and the plaintiffs alleged only damages from economic loss. The court rejected Avent’s claims that the insurers were responsible because the claims arose “because of bodily injury.” Specifically, Avent argued that claims that the products were unusable stemmed from the plaintiffs’ fear of bodily injury, which implicated the insurers. The court was unconvinced. “The problem with Avent’s argument is that even if the underlying plaintiffs proved every factual allegation in the underlying complaints, the plaintiffs could not collect for bodily injury because the complaints do not allege any bodily injury occurred,” Flaum wrote. He added that “this is not a drafting whim or mistake on the part of the plaintiffs’ attorneys.” The decision to claim only economic damages represented a “strategic decision” by plaintiffs’ attorneys in seeking class status. Representing Avent was Kenneth Frenchman, a partner at New York-based Kasowitz, Benson, Torres & Friedman. He could not be reached for comment. Also on the appeals panel were judges Diane Wood and David Hamilton.

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