The Judicial Panel on Multidistrict Litigation denied motions to centralize pretrial proceedings in pending COVID-19 business interruption claims. In re COVID-19 Business interruption Protection Insurance Litigation, 2020 U.S. District. LEXIS 144446 (Aug. 12, 2020). 

    Plaintiff policy holders sought consolidation, contending their policies provided coverage for business interruption losses caused by the COVID-19 pandemic and the related government orders suspending, or severely curtailing, operations of non-essential businesses. The Panel considered 15 actions on the pending motions, but had notice of 263 related actions. 

    Some plaintiffs opposed centralization or sought to be excluded from any MDL. Some argued the Panel should centralize the coverage actions on a state-by-state, regional, or insurer-by-insurer basis. 

    The Panel did not accept consolidation of all cases. There was little potential for common discovery across the litigation because there was no common defendant as the actions involved either a single insurer or insurer-group. The various cases involved different insurance policies with different coverages, conditions, exclusions, and policy language, purchased by different businesses in different industries located in different states. 

    While policy language for business income and civil authority coverages should be very similar among the policies, seemingly minor differences in policy language could have significant impact on the scope of coverage. Managing such litigation would be an ambitious undertaking  and implementing a pretrial structure that was efficient would take time. Yet, time was of the essence in this litigation as many plaintiffs were on the brink of bankruptcy. An industry-wide MDL would not promote a quick resolution of these matters. Therefore, the motions for centralisation were denied. 

    Arguments for insurer-specific MDLs were more persuasive, however. Such an MDL would be limited to single insurer or group of related insurers and would not entail the managerial problems of an industry-wide MDL involving more than 100 insurers. 

    Orders would issue in actions naming four insurers or groups of related insurers – Certain Underwriters an Lloyd's, London; Cincinnati Insurance Company; the Hartford insurers; and Society insurance. The parties were ordered to show cause why those actions should not be centralized. With respect to these four insurers or insurer groups, centralization could be warranted to eliminate duplicative discovery and pretrial practice.