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The U.S. Judicial Panel on Multidistrict Litigation on Tuesday agreed to consolidate 13 COVID-19-related business interruption lawsuits spread across five U.S. court districts that were filed against units of Erie Insurance Group in Pittsburgh.
The MDL ruling follows the panel’s agreement in October to consolidate business interruption litigation filed by businesses against Fond du Lac, Wisconsin-based Society Insurance Co., although it also refused to do so against several other insurers, saying it would be inefficient.
In August, the panel said centralizing all the COVID-19 business interruption litigation would not work because of differences between policies, among other factors, but that combining litigation against individual insurers may be feasible.
In its latest ruling, the seven-member panel held in In Re: Erie Covid-19 Business Interruption Protection Insurance Litigation that the 13 cases should be heard by Judge Mark R. Hornak of U.S. District Court for the Western District of Pennsylvania, whose chambers are in Pittsburgh. Four of the 13 lawsuits have been filed in Pennsylvania’s western district.
In holding that the cases should be consolidated in Pittsburgh, the panel said centralization of the lawsuits “will serve the convenience of the parties and witnesses and further the just and efficient conduct of this litigation.”
“These actions share common factual allegations that Erie wrongfully denied policyholders’ claims for business interruption insurance,” the decision said.
“As with the Society litigation, we find that centralization offers the most efficient route to resolution,” it said.
“Erie argues that centralization is not appropriate because the actions involve different claims and different types of business. The presence of additional or differing legal theories is not significant, however, when the actions arise from a common factual core.”
“The Western District of Pennsylvania is the clear center of gravity for this litigation, as the defendants are headquartered there and a sizeable number of actions are pending there,” it said.
Erie Insurance Group did not respond to a request for comment. Plaintiff attorneys contacted had no comment or did not respond to a request for comment.
A federal district court in Minneapolis has rejected a hair salon and barbershop’s effort to collect business interruption coverage from its insurer and granted a motion to dismiss the case, but invited the plaintiff to amend its complaint.