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MDL Panel Denies Nationwide Consolidation of COVID-19 Business Breakdown Cases



We previously reported on the July 30 argument before the MDL Panel regarding the plaintiff's proposal to consolidate more than 275 cases of COVID-19 business interruptions.

On 12 August, the MDL Panel issued a decision denying industry-wide consolidation. But that left the door open for the possibility of a limited centralization of cases against each of four insurance companies, which cumulatively accounted for 35% of cases.

When he denied all-encompassing centralization, the court found that while the plaintiff had identified 3 common issues, they "only share a superficial commonality." There were no ordinary respondents in any case, there was little potential for joint discovery, the insurances were different and they were bought by different companies in different states. And although there may be cases where standardized forms are used, these forms may have been modified and "seemingly minor differences in policy language may have a significant impact on the scope of coverage." The proposed MDL also raised "significant management and efficiency issues" as the panel added, "saying that this litigation would result in a complicated MDL seems to be an understatement."

The panel similarly rejected the concept of regional and state MDLs, but that these would be subject to the same problem.

However, the panel considered that the centralization of insurance-specific MDLs was "more convincing." Since each centralized case would be limited to a specific insurance company, it would not meet the challenges of "an industry-wide MDL involving more than one hundred insurance companies." It was more likely that a certain insurer would use the same wording, (1

) to increase the likelihood of joint discovery, while (2) allowing for preliminary proceedings on common languages ​​and avoiding inconsistent decisions.

This said, since the issue of insurance-specific MDLs only arose halfway through the briefing and was only addressed by several parties, the panel declined to make a decision on the post before that. "The panel requires a better understanding of the actual features and differences between these measures, as well as the effectiveness that can be achieved through centralization, before an insurance-specific MDL was created."

Consequently, the clerk was instructed to issue orders to show the reason why the cases against Lloyds (a collection of individual companies and syndicates rather than a single insurance company), Hartford, Cincinnati and Society Insurance, should not be centralized. It established a faster information schedule and planned the issue for consideration at the panel's next hearing on 24 September.


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