A number of federal class action cases involving businesses shut down from the COVID-19 crisis have resulted in requests for federal cases to be consolidated to one court The Judicial Panel on Multidistrict Litigation will decide if that will happen.

Here is how the Panel’s website explains MDL:

Origin and Purposes

The United States Judicial Panel on Multidistrict Litigation, known informally as the MDL Panel, was created by an Act of Congress in 1968 – 28 U.S.C. §1407.

The job of the Panel is to (1) determine whether civil actions pending in different federal districts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and (2) select the judge or judges and court assigned to conduct such proceedings.

The purposes of this transfer or “centralization” process are to avoid duplication of discovery, to prevent inconsistent pretrial rulings, and to conserve the resources of the parties, their counsel and the judiciary. Transferred actions not terminated in the transferee district are remanded to their originating transferor districts by the Panel at or before the conclusion of centralized pretrial proceedings.

Historical Summary

Since its inception, the Panel has considered motions for centralization in more than 2,750 dockets involving over 600,000 cases and millions of claims therein. These dockets encompass litigation categories as diverse as airplane crashes; other single accidents, such as train wrecks or hotel fires; mass torts, such as those involving asbestos, drugs and other products liability cases; marketing and sales practices; patent validity and infringement; antitrust price fixing; data security breaches, securities fraud; and employment practices.

Membership of the MDL Panel

The MDL Panel consists of seven sitting federal judges, who are appointed to serve on the Panel by the Chief Justice of the United States. The multidistrict litigation statute provides that no two Panel members may be from the same federal judicial circuit.

We previously noted that lawyers would file petitions to transfer federal cases for trial consolidation before one court in, Coronavirus Insurance Coverage Update April 22–Here Come The Mass Tort Lawyers!

Since then, there have been more class actions filed. Some petitions have been amended. One petition even asks for expedited ruling on the issue while an insurer has asked for an extension to respond since they have just been retained and have not even had counsel file notices of appearance in the cases.

Will the federal cases be given MDL treatment? I do not know. However, I have had quite a few attorneys argue for and against the benefits of having MDL treatment in these cases. Some policyholder attorneys have even suggested that they may side with the insurance companies, assuming insurers are going to oppose these petitions.

When will we find out? The current hearing date of the MDL panel is on May 28th in Washington, DC, and the one after is on July 30<sup<th

in Boston. None of the current COCID-19 cases are included on the May docket.

If an MDL is granted, the management of those cases will impact the business income claims. Most claims where federal jurisdiction can be established, will get swept up in many of the class actions that are pending. This will not impact claims in state court which have not been brought in or removed to federal court. However, individual claims brought in federal court or removed to federal court will be placed into the MDL if the petitions are granted.

Whether or not the MDL petition is granted will be a major occurrence in the CoOVID-19 business income claims. We will keep readers informed and publish the briefs supporting and against the MDL on this blog.

If you have questions about business income claims involving COVID-19, please call our main offices at (813) 229-1000 or Merlin Law Group attorney Michael Moore at (202) 246-9302. We are representing numerous business owners and believe many businesses have strong arguments for coverage based on the facts of the case and the policy language.