By Jeff Sistrunk

Law360 (December 3, 2020, 10:19 PM EST) -- The Judicial Panel on Multidistrict Litigation signaled Thursday that it supports centralizing a dozen putative class actions accusing the American unit of Assicurazioni Generali Group of failing to pay policyholders for trips canceled because of COVID-19, but attorneys for some of the policyholders clashed over where the cases should be grouped.

Derek Potts of the Potts Law Firm, who represents policyholder Tralisa Sheridan in one of the federal court suits pending across nine states against Generali U.S. Branch and several affiliates, told the panel during a Zoom hearing that centralizing the actions will prevent inconsistent pretrial rulings on policy terms and class certification.

According to Potts, centralization is appropriate in this instance for the same reasons that the JPML agreed in October to create two MDLs grouping cases against insurers that allegedly refused to cover ski trips canceled due to the coronavirus.

"This case is strikingly similar to that case," Potts argued. "Common factual issues arising from putative and overlapping national and statewide class actions, alleging that one insurer wrongfully denied policyholders' claims, all related to COVID-19."

Potts urged the seven-member JPML to group the cases against Generali in the Eastern District of Texas in Marshall, where Sheridan's suit and one other action are currently pending. He said that Marshall lies in the "exact center" of the country, and emphasized that the two suits there are "very mature," with dismissal motions by Generali having been fully briefed.

But U.S. District Judge Nathaniel M. Gorton questioned why the Southern District of New York would not be a more appropriate forum for an MDL, given that Generali's U.S. headquarters is located in New York City.

"I don't think it is worth disagreement that the cases should be centralized, but why isn't the Southern District of New York the center of gravity for these cases?" Judge Gorton asked. "That is where the defendant is headquartered, and where it seems relevant discovery will be likely."

Potts responded that the Eastern District of Texas has been "underutilized as an MDL court," and said Chief U.S. District Judge Rodney Gilstrap, who is overseeing both cases in that district, could capably handle an MDL. In addition, Potts noted that Texas is not subject to the same strict pandemic travel restrictions as New York.

However, Joseph P. Guglielmo of Scott + Scott Attorneys at Law LLP, who represents policyholder Mark Swafford, later contended that New York's restrictions — which can require a quarantine of up to 14 days for many out-of-state travelers — would have little impact on a potential MDL, given the prevalent use of videoconferencing for legal proceedings.

"If anything, it is a temporary issue, but the cases I have been handling in the Southern District of New York have been proceeding, as we are, via Zoom," he said. "So there hasn't been an issue with quarantine specifically."

"I don't think that is a dispositive issue that would warrant sending this to the Eastern District of Texas," Guglielmo added.

Attorneys for two policyholders opposed their suits being included in any MDL, citing substantial factual differences between their cases and the others. Generali's attorney, Archis Parasharami of Mayer Brown LLP, likewise cautioned the JPML that discovery in the dozen cases would be "overwhelmingly plaintiff-specific."

"This need for plaintiff-specific discovery means that centralization would be less efficient," Parasharami said.

Parasharami also noted that Generali has already filed motions to dismiss in nine of the suits. Accordingly, it would make more sense to leave the cases where they are so the judges can rule on those motions, he said.

However, U.S. District Judge Matthew F. Kennelly challenged Parasharami's rationale.

"I guess I am not seeing the sense in that," Judge Kennelly said. "That seems to be the opposite of what an MDL is all about — 'Let's wait for a bunch of inconsistent rulings and then consolidate the cases.'"

Parasharami replied that "it would be wasting a ton of effort that has gone in on the part of the parties and some of the courts to consider these motions."

"Second, I don't think there necessarily are going to be inconsistencies," he said. "Obviously, we have a lot of confidence that we are going to prevail across the board. That said, there are different state laws at issue, different policy language at issue, and different facts."

The case is In Re: Generali COVID-19 Travel Insurance Litigation, MDL No. 2968, before the Judicial Panel on Multidistrict Litigation.

--Editing by Breda Lund.

Correction: A previous version of the article misidentified the attorney who presented argument for Generali. The error has been corrected.

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