Federal appeals court sides with insurer in B. Braun lawsuit coverage dispute | Bethelehm Area

BETHLEHEM, Pa.- A federal appeals court agrees with a ruling that said B. Braun should pay for its own defense against lawsuits alleging it exposed Lehigh Valley residents to a harmful chemical.

The opinion from the United States Court of Appeals for the Third Circuit was filed earlier this week.

B. Braun had filed the appeal in early December, seeking to force Noetic Specialty Insurance to cover legal costs pertaining to lawsuits filed by people who live near B. Braun’s facility in Hanover Township, Lehigh County.

Those lawsuits alleged that B. Braun had exposed residents to emissions of ethylene oxide (EtO), a chemical used to sterilize medical devices. According to the United States Environmental Protection Agency (EPA), EtO is a human carcinogen. 

According to the court opinion, B. Braun tendered the defense of the lawsuits to Noetic, saying that Noetic owed B. Braun a duty “to defend and indemnify.”

But Noetic pushed back, arguing the policies it issued to B. Braun included provisions excluding coverage for bodily injury or property damage caused by “pollutants.”

The United States District Court for the Eastern District of Pennsylvania agreed and ruled in favor of Noetic.

The same court also said a regulatory clearance exception to the pollution exclusion did not apply in this case; that exception covers a product or work that has been cleared by a regulatory authority “for marketing with a specific indication for medical, diagnostic, or therapeutic use.”

The Third Circuit appeals court affirmed the District Court’s decision for both the pollution exclusion and the clearance exception. “EtO is not B. Braun’s ‘Product,” a judge wrote.

“Moreover, even if the EtO sterilization process qualified as B. Braun’s ‘Work,’ the two regulatory clearances B. Braun cites still do not satisfy the exception,” the opinion continued.

Last February, 69 News reported that B. Braun had settled the majority of lawsuits brought against the company.

Details of the settlement were not made public. A statement from B. Braun at the time said the settlement was “not the admission of any wrongdoing.” The company said it would continue to “vigorously defend” any remaining litigation.

B. Braun is a medical technology company based in Bethlehem. It’s part of the B. Braun Group of Companies in the U.S. Globally, the B. Braun Group, headquartered in Germany, employs more than 64,000 people in 64 countries.