In re National Lloyds Insurance Co. Hurricane Litigation
2013 Tex. LEXIS 1081
| J.P.M.L. | 2013Background
- In 2012 the MDL Panel created an MDL in Harris County (Judge Miller) for 244 Hurricane-related cases against National Lloyds arising from Hurricanes Dolly, Ike, Alex, and Tropical Storm Hermine; claims included contract, statutory, and extra-contractual (bad-faith/business-practice) allegations.
- Separate 2012 Hidalgo County hailstorms produced hundreds of suits assigned to Hidalgo district courts and later consolidated into Hidalgo County MDLs before Judge Rose Guerra Reyna.
- National Lloyds designated 85 tag-along cases to the Hurricane MDL; 63 of those were Hidalgo hail cases and 21 were scattered non-Hidalgo matters (various storms, leaks, etc.).
- Judge Miller remanded all 85; on reconsideration he denied remand for one Jefferson County case and asked the MDL Panel to decide whether relatedness should focus on a weather event or insurer business practices.
- The Panel reviewed precedent about when extra-contractual, insurer-wide claims justify MDL transfer and framed the controlling question: whether a shared weather event (time/place/method) plus similar business-practice claims is required for relatedness.
- The Panel denied rehearing as to the 84 remanded cases but granted transfer of the 63 Hidalgo hail cases to Judge Reyna’s Hidalgo County MDL and denied transfer for the remaining 21 non-Hidalgo tag-alongs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cases are "related" under Rule 13 for MDL transfer | Plaintiffs (Hidalgo plaintiffs) argued hail cases involve different mechanisms, policies, witnesses, and later time period — not related to hurricane MDL | National Lloyds argued the common fact is its uniform claims-handling/practices across events, so tag-along cases are related | Cases are related only when a significant weather event(s) in close proximity forms the litigation framework together with similar business-practice allegations; hail cases were not related to the hurricane MDL but were related among themselves |
| Whether insurer-wide extra-contractual claims alone justify MDL transfer (insurer-based MDL) | Plaintiffs argued insurer behavior alone is insufficient to create relatedness for MDL (would create perpetual, defendant-based MDLs) | National Lloyds asserted uniform claims-handling justifies transfer of all its cases into one MDL | The Panel held extra-contractual, insurer-practice claims alone are insufficient; there must be an additional limiting factor (time/place/event) |
| Proper destination for Hidalgo hail tag-along cases | Hidalgo plaintiffs wanted cases to remain in Hidalgo MDLs before Judge Reyna | National Lloyds sought transfer of Hidalgo hail cases into the National Lloyds hurricane MDL (or to any MDL) | Because Hidalgo hail cases share the same event, policies, and common discovery and would promote efficiency, they were transferred to Judge Reyna in Hidalgo County |
| Disposition of non-Hidalgo tag-along cases | Plaintiffs for non-Hidalgo matters argued those cases are distinct and not related | National Lloyds argued all its cases share common claims-handling facts so should be in the hurricane MDL | The Panel denied transfer for the 21 non-Hidalgo cases; they remain in their original trial courts |
Key Cases Cited
- In re Delta Lloyds Ins. Co., 339 S.W.3d 384 (Tex. M.D.L. Panel 2008) (insurer conduct-adjusting-claims framework made hurricane cases related despite multiple defendants)
- In re Texas Windstorm Ins. Ass'n Hurricanes Rita and Humberto Litigation, 339 S.W.3d 401 (Tex. M.D.L. Panel 2009) (extra-contractual claims across two storms in same region created relatedness)
- In re State Farm Lloyds Hurricane Litigation, 387 S.W.3d 130 (Tex. M.D.L. Panel 2012) (rejected strict ‘‘one event’’ requirement; relatedness tied to insurer policies over a defined time frame)
- In re Ad Valorem Tax Litigation, 216 S.W.3d 83 (Tex. M.D.L. Panel 2006) (explaining Rule 13 transfer standards)
- In re Hurricane Rita Evacuation Bus Fire, 216 S.W.3d 70 (Tex. M.D.L. Panel 2006) (defining tag-along relatedness requirement)