PA Supreme Court denies King’s Bench motion to consolidate all COVID-19 business disruption cases pending in state court | White and Williams LLP

On May 14, 2020, the The Pennsylvania Supreme Court denied an emergency request from a Pittsburgh-based restaurant It is urged to exercise its statutory and King’s Bench authority to grant full jurisdiction over the restaurant’s pending COVID-19 business interruption lawsuit against Erie Insurance Exchange and all similar COVID-19 business interruption cases in Pennsylvania state courts take over. The court’s order, which provides no basis for the court’s denial of the petition, comes just two weeks after the petitioning restaurant filed its emergency petition on April 29, 2020. Erie Insurance Exchange denied the petition, and AIG Property Casualty US, Inc., the American Property Casualty Insurance Association, Insurance Agents and Brokers of Pennsylvania, the Insurance Federation of Pennsylvania, the National Association of Mutual Insurance Companies, the Pennsylvania Association of Mutual Insurance companies and the Pennsylvania Defense Institute filed requests for permission to file amicus briefs on The Petition.

As discussed in our last article about the restaurant April 29, 2020 King’s Bench Petition, the “King’s Bench” authority of the Pennsylvania Supreme Court is authorized by Section 1 of the Addendum to the Judiciary Article of the Pennsylvania State Constitution and allows the Pennsylvania Supreme Court to assume full jurisdiction over all matters even if no matter is pending is pending in a Pennsylvania court. Similarly, 42 Pa. empowers. CS § 726 allows the Pennsylvania Supreme Court to single out and exercise full jurisdiction over cases of direct public interest pending in other Pennsylvania state courts. The requesting Pittsburgh restaurant on the matter requested that the Pennsylvania Supreme Court assume full jurisdiction in its own COVID-19 business interruption insurance litigation against Erie Insurance Exchange. It also asked the state Supreme Court to assume full jurisdiction over all other similar COVID-19 business disruption cases that have been filed or may be filed in Pennsylvania state courts, to consolidate those cases and to establish an expedited system to resolve them to develop.

Parties opposing the petition argued, among other things, that while the COVID-19 pandemic is of immediate public concern, it is not ipso facto means that the petitioner’s restaurant’s insurance contract dispute with its insurer for business interruption insurance coverage is of such immediate public interest that its resolution cannot be pursued in the normal course of normal civil proceedings in the Pennsylvania state courts. The opposition further argued that the use of different forms of coverage, terms and exclusions by each insurer in a variety of different policies would result in any court finding being limited to the specific facts of each COVID-19 case. This, coupled with the many different types of insured entities and the different underlying facts, prevents the court from making meaningful industry-wide decisions. As a result, they claimed that any attempts to make general decisions in these cases would not really stave off the expected surge in COVID-19 lawsuits over corporate insurance coverage.

Today’s ruling does not clarify why the Pennsylvania Supreme Court denied the restaurant’s King’s Bench petition. Nonetheless, we anticipate similar efforts by COVID-19 business interruption plaintiffs in other states to seek some form of consolidated administration of their pending COVID-19 cases in state courts. We also expect that the United States Judicial Panel on Multi-District Litigation will consider many of the same arguments made by the requesting restaurant and opposing insurers in this Pennsylvania case in connection with the pending motions for statewide consolidation of all COVID-19 business interruption cases have been raised at the federal level, which is what we have wrote about it recently. Irrespective of whether the federal court code or individual state court codes ultimately combine the COVID-19 business interruption insurance cases into individual proceedings, we expect that the number of such cases will rise sharply nationwide in the coming months.

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