2015 WL 5098061
Tex. J.P.M.L.2015Background
- Farmers sought MDL pretrial treatment for 1,565 (later updated) wind‑and‑hail insurance claims filed in 166 trial courts across 44 Texas counties, arising from storms between Feb. 29, 2012 and June 11, 2014. 73% of claims arose from eight major storms occurring in contiguous counties.
- Plaintiffs asserted individual damages plus extra‑contractual claims (statutory penalties, attorneys’ fees, punitive/treble damages), alleging Farmers used uniform “business practices” to minimize payouts and requesting broad, company‑wide discovery.
- Farmers alternatively requested one statewide MDL or several regional MDLs; plaintiffs opposed any MDL, arguing lack of relatedness, risk of a perpetual insurer‑specific MDL via tag‑along, and unfair inconvenience to plaintiffs and witnesses.
- The MDL Panel evaluated Rule 13: transfer requires (1) relatedness (common questions of fact) and (2) that consolidation serve convenience, efficiency, and justice (eliminate duplicative discovery, avoid inconsistent rulings, reduce travel, conserve judicial resources).
- The Panel concluded consolidation would serve Rule 13’s goals and that the eight major storm groups (and attendant similar claims) justified MDL treatment; it denied a single statewide MDL but created three pretrial MDL courts to handle grouped storm clusters and related cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relatedness (Rule 13) | Cases arise from many different storms/dates/counties; not "related" | Cases share common insurance language and identical business‑practices allegations warrant MDL | Related: cases tied to eight major storms (contiguous counties, close time frames) are related; MDL courts created for those groups and to include other cases for efficiency |
| Scope / insurer‑specific MDL (perpetual MDL) | Granting MDL would allow Farmers to tag new storm cases indefinitely into an insurer‑wide MDL | MDL should be allowed for existing, discrete storms; tag‑along limited to storms already in MDL | Denied one statewide/perpetual MDL; tag‑along limited to cases from storms within the MDL time frame (through June 11, 2014); new storms require new MDL motion unless parties agree |
| Convenience / inconvenience to plaintiffs | Plaintiffs would be burdened by travel and remote hearings; outweighs Farmers’ convenience | MDL reduces duplicative discovery and inconsistent rulings; remote participation is feasible; party attendance at pretrial hearings is rare | Convenience/efficiency favored MDL; panel found plaintiff inconvenience minimal and manageable via telephonic/electronic participation |
| Venue / trial rights | MDL improperly removes cases from counties of venue | MDL statute governs only pretrial consolidation; trials return to original venues | MDL pretrial consolidation is permitted; trials will be remanded to original counties for trial on merits |
Key Cases Cited
- In re Delta Lloyds Ins. Co., 339 S.W.3d 384 (Tex. M.D.L. Panel 2008) (distinguished event‑only commonality from common factual questions; business‑practices allegations can create related groups)
- In re Standard Guaranty Ins. Co., 339 S.W.3d 398 (Tex. M.D.L. Panel 2009) (MDL granted where one insurer faced multiple similar extra‑contractual claims)
- In re Texas Windstorm Ins. Ass’n Hurricanes Rita and Humberto Litig., 339 S.W.3d 401 (Tex. M.D.L. Panel 2009) (cases related where same coverage and similar business‑practices discovery sought)
- In re State Farm Lloyds Hurricane Ike Litig., 392 S.W.3d 353 (Tex. M.D.L. Panel 2012) (MDL appropriate where plaintiffs seek both case‑specific and broad company‑wide discovery alleging general business practices)
- In re State Farm Lloyds Hurricane Litig., 387 S.W.3d 130 (Tex. M.D.L. Panel 2012) (allowing tag‑along addition of non‑hurricane windstorm case based on overlapping discovery needs)
- In re National Lloyds Ins. Co. Hurricane Litig., 422 S.W.3d 926 (Tex. M.D.L. Panel 2012) (articulated limits on insurer‑based MDL; suggested “close proximity” requirement)
- In re National Lloyds Ins. Co. Hail Litig., 434 S.W.3d 345 (Tex. M.D.L. Panel 2014) (denying MDL where cases spanned several years and geographic dispersion undercut relatedness)
- In re State Farm Lloyds Hidalgo County Hail Storm Litig., 434 S.W.3d 350 (Tex. M.D.L. Panel 2014) (adopting two‑part relatedness showing: allegation of standard business practices and occurrence of significant events in close proximity)
- In re Silica Prods. Liab. Litig., 166 S.W.3d 3 (Tex. M.D.L. Panel 2004) (MDL promotes consistent rulings and judicial efficiency)
- In re OCWEN Loan Servicing, LLC, 286 S.W.3d 669 (Tex. M.D.L. Panel 2007) (noting importance of business‑practices discovery as a basis for MDL)