MDL Panel Considers Mini-MDLs For COVID-19 Insurance Cases
Earlier this year, lawyers for plaintiffs applied to the MDL Panel for consolidation of all COVID-19 business interruption cases in federal courts throughout the country. On August 12, the Panel rejected plaintiffs’ requests for a single consolidation but requested briefing on the possibility of mini-MDLS as respects five of the insurers that accounted for approximately one third of these cases: Lloyds (26 actions), Cincinnati (70 actions), Hartford (130 actions), Society Insurance (24 actions) and Travelers (45 actions). On Thursday, September 24, the Panel held a nearly three-hour hearing.
Most of the plaintiffs’ lawyers argued that policy language and state law was effectively the same for all the cases, that their clients were facing a crisis, that having to deal with a motion to dismiss process around the country with insurers filing essentially identical motions was inefficient and would lead to conflicting rulings, that common discovery issues and expert expense would be substantial, and that delay would be considerable. While most were aligned on the need for coordination, they each had their own thoughts on the appropriate courts for an MDL, often proposing specific judges.
23 policyholders filed briefs opposing consolidation, and counsel for several of them appeared at oral argument. They argued that their cases were already moving ahead expeditiously, that the cases turned on state law anyway, and that consolidation, which would require consideration of different claims, policies and state laws, would considerably delay the process. This said, as a fallback, if there was to be a consolidation, they requested it be in the court where their own individual cases were currently pending.
Insurer counsel argued for cases to be heard locally in the courts chosen by plaintiffs’ attorneys, that these courts were familiar with the operative state law which governed, that different civil authority orders were issued in each jurisdiction (if at all), that many of the policy forms were different, and that each plaintiff’s claim and damages needed to be assessed separately.
Some judges appeared skeptical of the request to consolidate, stating, for example, that they never used MDLs for pure questions of law as this appeared to be, that many cases (in fact, two-thirds) were still in the state court system, that policies differed, that damages differed as well, and that the issues would need to be decided by state courts anyway.
Other judges asked questions suggesting that they might have seen the matter differently, volunteering their view that all policies and state law were pretty much the same and asking those opposed to consolidation why consolidation wouldn’t be the most efficient path. As one commented, since each of insurer was filing essentially the identical motions to dismiss in each of their cases, it made sense to deal with them all at one time.
The Panel tends to issue decisions quickly and a decision can reasonably be expected in October.