Chinese Drywall – Judicial Panel on MDL Rules that Coverage Matter Should Not Be Transferred to Chinese Drywall MDL Proceedings

Chinese Drywall – Judicial Panel on MDL Rules that Coverage Matter Should Not Be Transferred to Chinese Drywall MDL Proceedings

In December 2009, the Judicial Panel on Multi-District Litigation (JPML) rejected efforts to transfer an insurance coverage action to the federal Chinese Drywall Multi-District Litigation (MDL) pending in the Eastern District of Louisiana (In Re: Chinese-Manufactured Drywall Product Liability Litigation, MDL No. 2047).

On September 8, 2009, the JPML had conditionally transferred General Fidelity Ins. Co. v. Foster, et al., No. 09-80743 (S.D. Fla.) to the MDL.  Following the conditional transfer, General Fidelity fought the transfer efforts while the MDL Plaintiffs’ Steering Committee (“PSC”) favored transfer.  General Fidelity argued that the case involved coverage determinations under Florida law and that insurance coverage actions should not be handled in the MDL proceedings.

In the order vacating the conditional transfer, the JPML found that the case seeks a determination of an insurer’s rights and obligations under a commercial general liability  policy and thus “raises distinctly different factual and legal question from the core allegations at issue” in the MDL.  The JPML further wrote that, by contrast, “Plaintiffs in the majority of the [MDL] actions…are individuals who seek relief related to property damage or personal injuries arising from drywall manufactured in China and installed in their homes.”
 
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© Copyright 2010 by Edwards Angell Palmer and Dodge LLP. All rights reserved. Reprinted with permission. This blog originally appeared on the InsureReinsure Blog. The InsureReinsure Blog is one of the Insurance Law Center’s Top 50 Insurance Blogs for 2009. The Top 50 Insurance Blogs may be found here.

Attachment: http://www.lexisnexis.com/documents/pdf/20100107123451_large.pdf