2016 Tex. LEXIS 719
Tex. J.P.M.L.2016Background
- Farmers Insurance moved for MDL pretrial transfer of storm-related wind and hail cases arising June 12, 2014–Jan 8, 2016; motion originally covered 186 cases in 76 courts across 27 counties.
- These cases allege the insurer routinely follows unlawful, standard or common business practices and thus plaintiffs seek broad extra-contractual discovery and relief.
- The core legal question: whether cases from different storms, dates, and counties are “related” under Rule 13 if plaintiffs plead common business-practices allegations.
- The Panel has addressed this recurring issue in nine prior storm-damage MDL decisions since 2008 and found its prior guidance unclear.
- The Panel removed the earlier “close proximity” requirement (that significant weather events occur in close proximity) from the relatedness inquiry, concluding that pleading common business practices alone can establish relatedness.
- Concerns that a business-practices MDL could become perpetual should be addressed prudentially by the pretrial court via the tag-along/remand procedure, not by narrowing the relatedness test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cases from different storms/dates/counties are "related" under Rule 13 when plaintiffs plead common business-practices | Alleging insurer-wide unlawful business practices places a common fact question across cases and thus makes them related | Relatedness should require more — e.g., a "close proximity" weather-event element — to avoid a perpetual MDL | Allegations of standard/common business practices alone suffice to establish relatedness; close-proximity is not required |
| Whether the Panel should retain the "close proximity" limit in relatedness analysis | Not necessary; common practice allegations transcend individual claims | Close-proximity needed to prevent indefinite MDLs and improper aggregation across unrelated storms | The Panel rejects close-proximity as an ingredient of relatedness; it is a prudential concern for the pretrial court via tag-along/remand review |
| Whether fears of a perpetual MDL justify narrowing relatedness | N/A (plaintiffs urge proper relatedness test) | A broad relatedness rule would allow indefinite expansion via tag-along, harming defendants | Perpetual-MDL concerns are prudential; pretrial court should manage additions and remand requests based on convenience, efficiency, and justice |
Key Cases Cited
- In re Farmers Ins. Co. Wind/Hail Storm Litig., 481 S.W.3d 422 (Tex. M.D.L. Panel 2015) (explains that business-practices allegations transcend individual claims and make cases related)
- In re State Farm Lloyds Hidalgo Cty. Hail Storm Litig., 434 S.W.3d 350 (Tex. M.D.L. Panel 2014) (previous decision requiring close-proximity plus business-practices allegations)
- In re National Lloyds Ins. Co. Hail Litig., 434 S.W.3d 345 (Tex. M.D.L. Panel 2014) (storm-damage MDL decision addressing relatedness)
- In re National Lloyds Ins. Co. Hurricane Litig., 422 S.W.3d 926 (Tex. M.D.L. Panel 2013) (introduced close-proximity language limiting relatedness)
- In re State Farm Lloyds Hurricane Ike Litig., 392 S.W.3d 353 (Tex. M.D.L. Panel 2012) (discusses MDL transfer standards and business-practices allegations)
- In re State Farm Lloyds Hurricane Litig., 387 S.W.3d 130 (Tex. M.D.L. Panel 2012) (MDL transfer authority and relatedness principles)
- In re Deepwater Horizon Incident Litig., 387 S.W.3d 127 (Tex. M.D.L. Panel 2011) (relatedness is a threshold question for MDL transfer)
- In re Wellington Ins. Co. Hailstorm Litig., 427 S.W.3d 581 (Tex. M.D.L. Panel 2014) (summarizes tag-along procedure and remand process)
- In re Texas Windstorm Ins. Ass'n Hurricanes Rita and Humberto Litig., 339 S.W.3d 401 (Tex. M.D.L. Panel 2009) (prior storm MDL precedent)
- In re Standard Guaranty Ins. Co., 339 S.W.3d 398 (Tex. M.D.L. Panel 2009) (prior MDL relatedness decision)
- In re Delta Lloyds Ins. Co., 339 S.W.3d 384 (Tex. M.D.L. Panel 2008) (early storm-damage MDL decision)