In their lawsuits for insurance coverage, two businesses, Newchops Restaurant Comcast LLC and LH Dining LLC, asked the U.S. Judicial Panel on Multidistrict Litigation (MDL) to set up an MDL before a judge in the Eastern District of Pennsylvania to address whether business interruption policies provide coverage for losses sustained as a result of the COVID-19 pandemic. The petitioners detailed that “[w]hile some actions may contain various causes of action such as breach of contract or bad faith insurance practices, they all ultimately share, and will share, the key core factual question – do the governmental orders trigger coverage under the business interruption insurance policies and do any exclusions (particularly those related to viruses or pandemics apply)?” If this question is answered in the MDL, it can potentially avoid conflicting decisions and guarantee some form of consistency.
Should the judge grant the petitioners’ request, the Eastern District of Pennsylvania could see an influx of federal claims. The Eastern District of Pennsylvania is no stranger when it comes to MDLs. The largest and longest-lasting MDL is based in the Eastern District - MDL 875, In Re: Asbestos Products Liability Litigation (No. VI). It was created in 1991 to coordinate and manage personal injury losses relating to asbestos and asbestos containing products exposure. Over 100,000 cases have been transferred into this MDL, many of them settled, with a few thousand still remaining.
