Mini-MDL approved to consolidate business interruption cases against one regional insurer

 

Last week, the U.S. Judicial Panel on Multidistrict Litigation agreed to at least one mini-MDL, consolidating the business interruption lawsuits filed against Society Insurance Co.  At the same time, it decided against consolidation of cases against several other insurers, saying it would be inefficient.

In August the MDL panel ruled against centralizing all COVID-19 business interruption lawsuits because of differences between policies and unique facts of certain policyholders.  However, the panel requested additional briefing on mini-MDLs against five insurers. Those five (Lloyds, Cincinnati, Hartford, Society Insurance, and Travelers) insurers accounted for approximately 275 cases (approximately 1/3 of cases filed). 

In approving the mini-MDL against Society Insurance Company, the MDL court stated consolidation “will serve the convenience of the parties and witnesses and further the just and efficient conduct of this litigation.”  Unlike the other insurance carrier defendants, the panel noted that Society is a regional insurer only operating in six states (Minnesota, Iowa, Illinois, Indiana, Wisconsin, and Tennessee).  These cases were transferred to the U.S. District Court for the North District of Illinois, in Chicago.

In a series of separate opinions, the MDL ruled against consolidating the cases against the other insurers involved.  Generally speaking, the insurance carriers argued that local courts were already familiar with state law (which governs most substantive insurance law issues), that various states and municipalities issued unique and differing civil authority issues, that a variety of policy forms were at issue, and that any question of damages would require individualized, fact-specific attention.