MDL Panel Denies Nationwide Centralization of COVID-19 Business Interruption Suits

The U.S. Judicial Panel on Multidistrict Litigation (the MDL panel) refused to consolidate more than 275 COVID-19 related business interruption cases, filed by policyholders against their insurers. The MDL panel issued an order denying an industry-wide consolidation but is considering centralizing litigation filed against four specific insurers, who cumulatively accounted for about 35 percent of the cases.

The MDL panel noted that although the policyholders had identified three common questions, the cases shared “only a superficial commonality.” There were no common defendants in all cases, little potential for common discovery, the policies were different and were purchased by different businesses in different states. Although standardized forms may have been used, each insurer has the liberty to modify those forms. The MDL noted that even minor differences in policy language have been known to have a significant impact on the scope of coverage.