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MDL panel considers consolidation of claims for interruption of COVID-19



On July 30, the Judicial Panel on Multi-District Disputes held a Zoom hearing on a proposal submitted by the plaintiff's attorneys to consolidate hundreds of business interruption claims filed across the country. The panel allowed a number of complainants' lawyers and two insurance law lawyers for each to argue for 3 uninterrupted minutes and then answer questions.

Representatives for consolidation mainly claimed that the large number of cases that have already been submitted and that will soon be submitted would overwhelm the courts if each case proceeds according to its own schedule. They stressed that efficiency and consistency are needed to solve only COVID-1

9 claims. While most lawyers argued – primarily – for a complete consolidation, many advanced backups emphasized the very different nature of the cases. Backups included several MDLs based on insurers (especially those insurers with a large number of cases), several MDLs based on jurisdiction and various combinations thereof. Proponents also suggested that MDLs could include clues in their structure to report relevant differences between cases.

Insurers replied that these cases did not meet the requirements for consolidation. The cases involved different plaintiffs with different losses or damages and receivables, different insurance companies and policy language, differences in state legislation and different domicile orders. In addition, the lawyer argued that most of these claims could be settled over the submissions and, for those who are not, the discovery will not be centralized due to the necessary focus on policyholders, not insurers. In support of their position, insurers pointed to the overwhelming opposition to consolidation among amici, especially United policyholders.

The panel addressed its questions as to whether consolidation would actually provide the claimed benefits that advocates proposed and what would be the most effective division of lines if it created one or more MDLs with multiple tracks. Among the judges' main concerns, insofar as their questions indicated, was the degree of variation in the plaintiff's allegations, political language and state law and the associated reduction in potential benefits. These questions revealed an estimate of the differences between the cases, the potential viability of one or more MDLs with different tracks to accommodate differences, and whether an MDL process would improve efficiency.

In view of these key differences between each of the cases and the inability of the plaintiff's lawyers to propose an MDL structure that can effectively handle these cases, it seems likely that the plaintiff's proposal for consolidation will be denied. Panel's decision is expected within the next few weeks.


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