By Shawn Rice

Law360 (April 26, 2021, 2:38 PM EDT) -- A Washington federal judge refused to send questions to the state Supreme Court on issues surrounding physical loss and a virus exclusion in coverage fights involving a group of dentist and orthodontic offices and insurers over losses from the coronavirus pandemic and government shutdown orders.

U.S. District Judge Barbara J. Rothstein on Friday denied the Washington Supreme Court the opportunity to weigh in on the business interruption suits, saying she has "all the tools necessary" to decide the issues much like other federal courts across the country. Only one Ohio federal court chose to send a question to its state Supreme Court and that has been the exception even in its own district, Judge Rothstein said.

"The proposed questions, while new, substantial and not yet addressed by the Washington Supreme Court, do not present such unique and exceptional issues as to warrant certification," Judge Rothstein said. "Furthermore, the additional delay and cost that would be incurred counsels against certification."

Ten cases between businesses and insurers were consolidated in the Western District of Washington, according to the insurance company parent group. Since then, Judge Rothstein was briefed on common questions of coverage and exclusions in the disputes over coverage for income lost during the pandemic.

In February, a group of dentists and orthodontists asked Judge Rothstein to allow the Washington high court the chance to determine whether the policyholders' inability to use their covered property as a result of the government shutdown orders was a "direct physical loss" triggering coverage.  A Washington state restaurant and the Seattle Symphony Orchestra are also listed as plaintiffs in the suits.

The group also asked whether the state's efficient proximate cause rule requires a factual determination of the predominant cause of business losses before a virus exclusion can be used to preclude coverage. The policyholders argued the closure orders were the cause of the losses, not the virus itself.

In Friday's order, Judge Rothstein said other federal courts have decided similar issues without needing guidance from state high courts. According to the latest information from the University of Pennsylvania's COVID Coverage Litigation Tracker, there were already 250 orders, the judge said.

Judge Rothstein noted that the Ohio Supreme Court has been the rare exception to accept a certified question thus far in Neuro-Communication Services Inc. v. Cincinnati Insurance Co. on the issue of physical loss. But the judge said there are at least eight decisions from Ohio federal courts on that same issue.

Judge Rothstein also expressed concern about the additional cost and delay, saying an answer from the Washington Supreme Court could take between nine to 11 months. That delay contradicts the primary reason the putative class actions were transferred and consolidated in the district, according to the judge.

Amy Williams-Derry of Keller Rohrback LLP, counsel for the policyholders, told Law360 on Monday that the businesses "are eager to receive benefits owed by their insurers, regardless of the procedural path" and "look forward to a ruling on the merits from the court."

Counsel for the insurers didn't immediately respond to requests for comment.

The dentists, orthodontists, restaurant and symphony are represented by Ian S. Birk, Lynn L. Sarko, Gretchen Freeman Cappio, Irene M. Hecht, Amy Williams-Derry, Nathan L. Nanfelt and Alison Chase of Keller Rohrback LLP, Matthew B. Edwards of Owens Davies PS, William C. Smart, Isaac Ruiz and Kathryn M. Knudsen of Ruiz & Smart PLLC, Brent W. Beecher of Hackett Beecher & Hart, Shannon Loyd of The Loyd Law Firm PLLC and Mark A. Wilner, Franklin D. Cordell and Kasey D. Huebner of Gordon Tilden Thomas & Cordel LLP.

The insurers are represented by Eric J. Neal, Thomas Lether, Westin McLean and Kasie Kashimoto of the Lether Law Group, Robin E. Wechkin, Yvette Ostolaza and Yolanda C. Garcia of Sidley Austin LLP, Anthony Todaro and Lianna Bash of DLA Piper, H. Christopher Boehning, Elizabeth M. Sacksteder, Daniel H. Levi and Hallie S. Goldblatt of Paul Weiss Rifkind Wharton & Garrison LLP, Matthew S. Adams of Forsberg & Umlauf PS, James R. Morrison of BakerHostetler, Cari K. Dawson and Kara F. Kennedy of Alston & Bird LLP, Daniel R. Bentson, John A Bennett and Stuart D Jones of Bullivant Houser Bailey PC, Stephen E. Goldman and Wystan M. Ackerman of Robinson & Cole LLP, and Antonia B. Ianniello and Darlene K. Alt of Steptoe & Johnson LLP.

The cases are Mark Germack DDS v. The Dentists Insurance Co., case number 2:20-cv-00661; Wade K. Marler DDS et al. v. Aspen American Insurance Co., case number 2:20-cv-00616; Kara McCulloch DMD MSD PLLC v. Valley Forge Insurance Co. et al., case number 2:20-cv-00809; Carlos O. Caballero DDS MS PS v. Massachusetts Bay Insurance Co., case number 3:20-cv-05437; Mario D. Chorak DMD PS et al. v. Hartford Casualty Insurance Co. et al., case number 2:20-cv-00627; Pacific Endodontics PS et al. v. Ohio Casualty Insurance Co. et al., case number 2:20-cv-00620; Jennifer B. Nguyen et al. v. Travelers Casualty Insurance Co. of America et al., case number 2:20-cv-00597; and La Cocina de Oaxaca LLC v. Tri-State Insurance Co. of Minnesota, case number 2:20-cv-01176, Cadeceus LLC v. Scottsdale Insurance Co., case number 2:21-cv-00050, HT-Seattle Owner LLC v. American Guarantee and Liability Insurance Co., case number 2:21-cv-00048, all in the U.S. District Court for the Western District of Washington.

--Additional reporting by Hailey Konnath. Editing by Neil Cohen.

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