Opinion on MCAC and Civil Authority MTD — In re Society Insurance COVID-19 MDL

Record facts

U.S. District Court for the Northern District of Illinois · No. 1:20-cv-05965 · Doc. 229 · 2021-08-01 · Docket on CourtListener

Summary

A Memorandum Opinion and Order entered August 1, 2021 by Judge Edmond E. Chang in In re: Society Insurance Co. COVID-19 Business Interruption Protection Insurance Litigation, MDL No. 2964, Master Docket No. 20 C 5965, in the U.S. District Court for the Northern District of Illinois, as Document 229. The opinion decides two motions: the plaintiffs’ motion for leave to file a Master Consolidated Amended Complaint, R. 152, granted in part with modifications and exceptions, and the defense motion to dismiss all claims premised on the Civil Authority or Contamination provisions of the insurer’s policies, R. 175, denied as unnecessary. The court holds that the Master Consolidated Amended Complaint may serve as the operative pleading for the bellwether actions and for the same coverage claims of non-bellwether plaintiffs, and sets its filing for August 16, 2021. The opinion runs 24 pages.

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Full text

UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF ILLINOIS 
EASTERN DIVISION 
 
IN RE: SOCIETY INSURANCE CO. 
) 
COVID-19 BUSINESS 
 
 
) 
MDL No. 2964 
INTERRUPTION PROTECTION 
) 
INSURANCE LITIGATION 
 
) 
Master Docket No. 20 C 5965 
 
 
 
 
 
 
 
 
) 
 
 
 
 
 
 
 
) 
Judge Edmond E. Chang 
 
 
 
 
 
 
) 
 
 
 
 
 
 
) 
Magistrate Judge Jeffrey I. Cummings 
This Document Relates to All Cases 
) 
 
MEMORANDUM OPINION AND ORDER 
 
This Opinion decides two motions: the Plaintiffs’ motion to file a Master Con-
solidated Amended Complaint, R. 152; and the defense motion to dismiss all claims 
in the MDL Action premised on the Civil Authority or Contamination provisions of 
Society Insurance’s policies, R. 175.1 As detailed by the Opinion, the former is granted 
in part, with modifications and exceptions; the latter is denied in substantial part as 
unnecessary given the decision on the Master Consolidated Amended Complaint. The 
Court will allow further—though limited—Rule 12 and 56 practice to the extent that 
the Master Consolidated Amended Complaint raises new claims that were not de-
cided in the prior Opinion of February 22, 2021, R. 131. 
I. Background 
This multi-district litigation addresses Society’s across-the-board denials of 
business-interruption coverage for a variety of restaurants and other businesses in 
the hospitality industry whose operations deteriorated due to the COVID-19 
 
1Citations to the record are noted as “R.” followed by the docket number.  
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pandemic. After appointing counsel to lead the litigation on the Plaintiffs’ behalf, and 
after conferring with the parties on which motions to decide as bellwethers, the Court 
picked three cases: Big Onion Tavern Group, LLC, et al. v. Society Insurance, No. 
1:20-cv-02005; Valley Lodge Corp. v. Society Insurance, No. 1:20-cv-02813; and Rising 
Dough, Inc. et al. v. Society Insurance, No. 1:20-cv-05981. See R. 69. Society filed a 
motion to dismiss for failure to state a claim in the Rising Dough action, R. 20, No. 
1:20-cv-05981, and a motion to dismiss for failure to state a claim or, in the alterna-
tive, for summary judgment in the Big Onion and Valley Lodge actions. R. 113, No. 
1:20-cv-02005; R. 17, No. 1:20-cv-02813. 
The Plaintiffs have brought claims alleging coverage under a variety of Soci-
ety’s policy provisions, including coverages for the interruption of Business Income 
and, separately, for Civil Authority, Contamination, and Extra Expense. The Illinois-
based Plaintiffs (in the Big Onion and Valley Lodge actions) also brought claims un-
der Section 155 of the Illinois Insurance Code, 215 ILCS 5/155, for various “vexatious 
and unreasonable” insurance-claims practices. The substance of these allegations is 
discussed in much greater detail in the prior opinion. R. 131 at 3–10. Society commu-
nicated the denial of the Plaintiffs’ claims for coverage in several ways: preemptively, 
by circulating a memorandum to its insurance-agency partners on March 16, 2020, 
implying that its policies would not cover any pandemic-related claims; by denying 
individual claims filed by certain Plaintiffs; and in a March 27, 2020 memorandum 
to all policyholders declaring that “pandemic events” are generally excluded from in-
surance coverage. See id. at 8–10. 
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This Court denied, for the most part, Society’s motions to dismiss and its alter-
native summary judgment motions. R. 131. Although the Court agreed with Society 
that the claims under the Civil Authority, Contamination, and Extra Expense cover-
ages, as well as the Sue and Labor provision of Society’s standard policy, could not 
proceed, see id. at 24–29, the Court determined that the claims under the policy’s 
Business Interruption coverage and Illinois Insurance Code Section 155 survived the 
motions, id. at 12–24, 29–31. 
 
Each side has now brought a motion following up on the summary judgment 
decision, seeking to consolidate and streamline the litigation. R. 152, Pls.’ Mot. for 
Leave to File Master Cons. Am. Compl.; R. 175, Defs.’ Mot. to Dismiss All Claims 
Premised upon Civil Authority/Contamination. One key question at stake in both mo-
tions is how the summary judgment decision on the bellwether cases affects the doz-
ens of other cases within this multidistrict litigation. What follows is an explanation 
on how to balance the efficiencies of the MDL litigation with the rights at stake in 
each individual case. 
II. Analysis 
A. Standard of Review 
As the saying goes, “the plaintiff is the master of the complaint.” Holmes 
Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826, 831 (2002) 
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(cleaned up).2 A plaintiff may amend a complaint once “as a matter of course” early 
on in the litigation, but even after that time has passed, may amend the pleading 
either with consent of the other side or with leave of court. Fed. R. Civ. P. 15(a)(1), 
(2). “The court should freely give leave when justice so requires.” Fed. R. Civ. P. 
15(a)(2). Having said that, leave to amend may be denied when there are compelling 
reasons against doing so, “such as undue delay, bad faith or dilatory motive on the 
part of the movant, repeated failure to cure deficiencies by amendments previously 
allowed, undue prejudice to the opposing party by virtue of allowance of the amend-
ment, futility of amendment, etc.” Barry Aviation, Inc. v. Land O’Lakes Municipal 
Airport Comm’n, 377 F.3d 682, 687 (7th Cir. 2004) (cleaned up). 
In the context of an MDL, additional considerations come into play. First, be-
cause MDLs bring together related litigations for pretrial proceedings, 28 U.S.C. 
§ 1407(a), but do not formally consolidate them into one action in the manner of, say, 
a class action, it is imperative to clarify whether an amended pleading submitted by 
a bellwether plaintiff applies only to that plaintiff’s case, or whether it instead also 
controls the other cases within the MDL. Separate actions within MDLs start and 
end with separate identities, but case management and consolidation can alter the 
in-between: 
transferred for…pretrial proceedings retain their separate identities, espe-
cially for purposes of entering final judgments and pursuing appeals. Yet 
transferee courts and parties may choose to manage those cases in ways that 
 
2This opinion uses (cleaned up) to indicate that internal quotation marks, alterations, 
and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations, 
18 Journal of Appellate Practice and Process 143 (2017). 
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change that default rule and give up the separate identities of the original suits 
transferred to the MDL litigation.  
 
Bell v. Publix Super Markets, Inc., 982 F.3d 468, 489 (7th Cir. 2020). “Parties may 
elect to file a ‘master complaint’ and a corresponding ‘consolidated answer,’ which 
supersede prior individual pleadings. In such a case, the transferee court may treat 
the master pleadings as merging the discrete actions for the duration of the MDL 
pretrial proceedings. No merger occurs, however, when the master complaint is not 
meant to be a pleading with legal effect but only an administrative summary of the 
claims brought by all the plaintiffs.” Gelboim v. Bank of America Corp., 574 U.S. 405, 
413 n.3 (2015) (cleaned up) (citing In re Refrigerant Compressors Antitrust Litigation, 
731 F.3d 586, 590–92 (6th Cir. 2013)). 
Whether an amended complaint is treated as a master, superseding complaint 
or instead as an “administrative summary” is a “pragmatic” issue, and looks to the 
behavior of the parties and the court. Bell, 982 F.3d at 490. Some relevant factors 
include:  
(1) how the plaintiffs labeled the new complaint, (2) whether the plaintiffs 
served the defendants with the new complaint instead of the original plead-
ings, (3) whether key deadlines were set in relation to the new complaint, (4) 
whether the court entertained motions to dismiss the consolidated complaint, 
and (5) whether the parties and the court looked solely to the allegations in the 
consolidated complaint when arguing and deciding such motions. 
  
Id. The fifth factor is “perhaps” the most important. Id. (Bell spelled out those con-
siderations in a backward-looking context, that is, in trying to figure out what the 
parties and the district court there intended to do. Id. at 491. Obviously, the point of 
this Opinion is to be explicit and leave no room for doubt.) 
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Second, because MDLs are intended to streamline litigation, this Court must 
consider whether the amended complaint would indeed promote efficiency. See, e.g., 
In re Gen. Motors LLC Ignition Switch Litig. (GM I), Nos. 14-MD-2543, 14-MC-2543, 
2015 WL 3619584, at *7 (S.D.N.Y. June 10, 2015). This, of course, depends in part on 
whether it is a consolidated master complaint with operative effect across multiple 
individual cases within the MDL, or merely an administrative summary. The Court 
must consider the new complaint’s likely impact on discovery and pretrial-motion 
practice. 
Third, the Court must consider whether the new pleading affects the defend-
ant’s and other plaintiffs’ substantive rights differently from the original pleading. 
Because actions within an MDL are consolidated only for pretrial purposes and then 
are transferred back to their originating districts for trial, 28 U.S.C. § 1407(a), there 
remain substantial interests in allowing each plaintiff to remain the master of its 
own complaint, and in preserving the defendant’s right to defend different cases dif-
ferently. In particular, a master complaint within an MDL cannot, on its own (that 
is, without the action later being certified as a class) override the requirement that 
the cases eventually be remanded to their originating districts for trial, unless all 
parties waive this right. See Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 
523 U.S. 26, 35–37, 41–42 (1998); Armstrong v. LaSalle Bank Nat’l Ass’n, 552 F.3d 
613, 616 (7th Cir. 2009). At the same time, the Court must squeeze as much efficiency 
as practicable from the MDL proceeding by saving both litigant and judicial resources 
before the cases return for trial (if trial is what ends up happening).  
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B. Clarifying the Operative Pleading 
 
“[T]he dangers of ambiguity can be avoided if the court and the parties decide 
explicitly, from the beginning, the legal status of the consolidated complaint(s).” Bell, 
982 F.3d at 490. Here, the Court now decides that the proposed Master Consolidated 
Amended Complaint (MCAC) can serve as the consolidated, operative pleading for (1) 
the bellwether actions; and (2) the same coverage claims asserted by non-bellwether 
plaintiffs. But the MCAC will not supersede additional claims asserted by non-bell-
wether plaintiffs that are not also asserted in the MCAC. Most prominently, claims 
premised on specific state-law bad-faith denial of coverage laws are not superseded 
(other than Illinois Section 155 claims, which the Court addressed in the Opinion of 
February 22, 2021; those claims are pleaded and included in the MCAC). 
 
The parties have offered competing positions on the necessity, effect, and func-
tion of the proposed MCAC. For their part, the bellwether plaintiffs “propose that the 
Complaint be the operative pleading, not an ‘administrative summary.’” R. 153, Mem. 
in Support of Mot. for Leave to File Cons. Am. Compl., at 4 (emphasis in original). 
They “believe that this will streamline proceedings by having the parties’ and the 
Court’s attention focused on one operative pleading and on one master docket. In that 
way, the Court and the parties will only have to mind one master lawsuit, rather than 
many individual dockets.” Id. For its part, Society argues that the MCAC does not 
actually “consolidate the parties and claims from the underlying cases into one plead-
ing. Instead, it includes only a small number of the plaintiffs and a subset of the 
pending claims in this MDL.” R. 166, Society’s Opp. to MCAC, at 1. Society observes 
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(rightly) that although the bellwether plaintiffs’ brief asserts that the MCAC will 
function as the superseding operative pleading, the draft MCAC itself states that 
“[t]he fact that a particular Plaintiff [within the MDL] is not expressly listed as an 
Individual Plaintiff [in the MCAC] does not waive that Plaintiff’s right to proceed 
with its individual claims on a parallel track notwithstanding any class(es) which 
may be certified pursuant to Fed. R. Civ. P. 23 in the future.” R. 153-1, Master Con-
solidated Amended Complaint, at 1; see also Society’s Opp. at 1. The MCAC further 
describes itself as “intended to serve as Class Plaintiffs’ complaint proceeding 
through trial,” notably leaving out any description of which complaint would serve as 
the operative pleading for other individual plaintiffs. MCAC at 1.  
 
The bellwether plaintiffs clearly have the right to choose which claims to assert 
in their own cases. Neither this Court nor Society should presume to direct that 
choice, at least for a proposed first amendment to their respective complaints. But 
because actions within an MDL “retain their separate identities” unless merged, Bell, 
982 F.3d at 489, the bellwether plaintiffs are not the masters of the other individual 
plaintiffs’ complaints. The “purpose of the bellwether … process is to provide signifi-
cant information regarding the entire pool of cases that are part of the MDL.” In re 
Testosterone Replacement Therapy Prods. Liab. Litigation, 2017 WL 2574057, at *1 
(N.D. Ill. May 22, 2017). Bellwether cases are intended to be representative of their 
peers not necessarily in the formal, legal sense but instead as serving as the common 
springboard from which Court decisions on substance (like the dismissal motions and 
early summary judgment motions), procedure, and discovery can then apply to like 
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cases and claims. So, the bellwether plaintiffs cannot assert (absent universal agree-
ment from all other plaintiffs) that their consolidated pleading can, simply by virtue 
of being filed, supersede pleadings in what remain, formally, separate actions. It is 
true that counsel for the bellwether plaintiffs might very well be certified as repre-
sentatives of one or more classes, see MCAC at 37–65; R. 213, Mot. to Certify Class, 
but at this point in the litigation, before the grant of class certification, superseding 
all other pleadings in the MDL is not appropriate. 
 
At the same time, the purpose of the MDL mechanism is frustrated if each case 
must proceed on a completely independent track, and if no court decision in one case 
can be applied to any other. Society argues that because any MCAC would necessarily 
proceed alongside many other underlying individual-plaintiff complaints, the MDL 
not only does not gain any efficiency, but in fact becomes more confusing and difficult 
to manage. Society’s Opp. at 2. But that’s not quite right either. Again, the bellwether 
plaintiffs were chosen precisely because they are substantially representative of the 
claims at stake in the MDL as a whole. See R. 69 (identification of bellwether mo-
tions); see also R. 68, Transcript of Status Hearing (Nov. 2, 2020). It would be unnec-
essary and duplicative for Society and all of the plaintiffs in every case to litigate the 
same claims (and defenses) individually when the bellwether decisions—and, going 
forward, decisions arising from the MCAC—apply just as well to the individual cases. 
Disallowing the bellwether plaintiffs to file a representative MCAC (again, not “rep-
resentative” in the class-action sense, at least not yet) with any superseding effect 
would also nullify most of the efficiency gains that could be had from applying the 
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Court’s dispositive-motion decisions (and other decisions) more broadly. Indeed, even 
Society argues, as discussed more fully below, in favor of applying the bellwether 
dismissals of the Civil Authority and Contamination claims to non-bellwether ac-
tions. The converse should be true too: the survival of the dismissal motions and early 
summary judgment motions should apply to the non-bellwether cases too.  
 
To balance the interests in the formal separate identities of the cases but con-
tinue to gain the efficiencies of the MDL, the Court invokes Federal Rule of Civil 
Procedure 42(a). That familiar rule says: “If actions before the court involve a common 
question of law or fact, the court may: (1) join for hearing or trial any or all matters 
at issue in the actions; (2) consolidate the actions; or (3) issue any other orders to 
avoid unnecessary cost or delay.” Given its authority under Rule 42(a), the Court 
therefore makes the following decisions about the effect of the MCAC: 
 The MCAC completely supersedes prior complaints in each of the individual 
bellwether actions: Big Onion Tavern Group, LLC, et al. v. Society Insurance, 
No. 1:20-cv-02005; Valley Lodge Corp. v. Society Insurance, No. 1:20-cv-02813; 
and Rising Dough, Inc. et al. v. Society Insurance, No. 1:20-cv-05981. The 
MCAC will function as the only operative pleading in these actions. 
 The MCAC also supersedes individual non-bellwether plaintiffs’ claims for cov-
erage under the same specific coverage provisions of the Society insurance pol-
icy that are identified in the MCAC. As the Court reads the MCAC, this means 
that Counts 1–20 supersede any claims based on the same coverage provisions 
in any of the actions within the MDL. 
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 But to the extent that individual non-bellwether plaintiffs have alleged claims 
that are not included within the MCAC, those claims are not superseded and 
may proceed on a parallel track. As the Court reads the MCAC, this category 
primarily encompasses individual claims under specific bad-faith denial of cov-
erage laws analogous to the Illinois Section 155 claims asserted in the MCAC. 
(The Illinois Section 155 claims as pleaded in the MCAC do supersede other 
Illinois Section 155 claims filed in the non-bellwether actions.) In order to move 
the litigation as efficiently as possible overall, all of the claims for bad-faith 
denial of coverage other than the Illinois Section 155 claims asserted by the 
bellwether plaintiffs will be stayed for the time being. The Court anticipates 
that discovery on the Section 155 claims will likely overlap almost entirely with 
the discovery needed on the other state-law claims, such that the litigation on 
those claims will not be unduly delayed if and when the stay is lifted.3 
 The parties have disputed whether it is necessary or appropriate for the bell-
wether plaintiffs to replead for purposes of appellate preservation the claims 
that this Court has already dismissed or on which the Court has already 
 
3 The Court considered, but rejected, the idea of dismissing the other state-law bad-
faith claims without prejudice and with leave to reinstate as part of its consolidation order. 
This mechanism was deployed for certain economic-loss claims in In re General Motors LLC 
Ignition Switch Litigation, 2015 WL 3619584, at *8–*9 (S.D.N.Y. June 10, 2015). It is not 
entirely certain what effect a dismissal without prejudice of that sort would have if the cases 
were to return to the transferee courts for trial. Not all courts would necessarily believe they 
were bound by the reinstatement authorization. Here, staying the non-Illinois bad-faith 
claims for the time being serves to streamline discovery just as well as dismissal without 
prejudice would, without the difficulty and potential adverse consequences to the non-bell-
wether individual plaintiffs that the reinstatement process might entail. 
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granted summary judgment to Society (for example, Counts 12–18 of the 
MCAC). Society observes that in the Seventh Circuit, it is likely unnecessary 
to replead, as the eventual appealable final judgment will bring up all prior 
decisions in the case, even those made as to a complaint that has been super-
seded. See Bastian v. Petren Resources Corp., 892 F.2d 680, 682–83 (7th Cir. 
1990). But the bellwether plaintiffs observe that in the Eighth Circuit (which 
would cover the Iowa and Minnesota cases) claims not repleaded in an 
amended complaint may be considered waived on appeal. See Tolen v. Ashcroft, 
377 F.3d 879, 882 n.2 (8th Cir. 2004). Out of an abundance of caution, the Court 
will allow plaintiffs to replead these claims. But in order to avoid an unneces-
sary, duplicative round of briefing, the Court proposes that it deem Society to 
have renewed its motions targeting Counts 12–18. of the MCAC, and the Court 
would then simply apply its previous Opinion on the dispositive motions, 
granting the motions in part as before and denying them in part as before. The 
Court would set another answer or response deadline only on the remaining 
counts. This will be a topic of discussion at the next status hearing.  
With these parameters in place, as well as those discussed in the remaining 
sections of this Opinion, the Court is confident that the bellwether plaintiffs are pro-
vided with the appropriate amount of latitude as to their own litigation strategy, 
while not infringing on the other individual plaintiffs’ rights nor on Society’s rights, 
and while providing efficiencies in discovery and motion practice that will move the 
MDL as a whole forward. The MCAC will serve as the guiding complaint for the 
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remainder of the current stage of discovery given the stay on the distinguishable 
claims in the non-bellwether cases. 
C. Lexecon Rights and New Plaintiffs 
 
The bellwether plaintiffs have sought to add new plaintiffs—that is, plaintiffs 
who had not filed or joined in any of the complaints currently within the MDL—“di-
rectly” via the MCAC. Pls.’ Mem. at 5. Society takes issue with this approach, as well 
as with plaintiffs’ addition of new classes and claims not asserted in any of the prior 
underlying complaints. Society’s Opp. at 5. As to the brand-new plaintiffs, Society 
further observes that this puts its Lexecon rights at stake, given that there is no ob-
vious transferor court to which to remand those plaintiffs’ claims for trial (if the liti-
gation gets to that point). Id. at 9–10. The Plaintiffs propose to solve this problem by 
“amending complaints and adding and/or substituting parties as appropriate” before 
remand, arguing that “the ‘new’ plaintiffs can simply be joined as plaintiffs into one 
of the preexisting complaints under Rule 20.” R. 174, Pls.’ Reply at 4. 
 
On review of the competing interests, the Court holds that it is improper to add 
new plaintiffs—especially those not located within the Northern District of Illinois—
“directly” to this MDL. The MDL statute is clear in its division of labor between the 
transferor and transferee district courts, contemplating that the case will originate 
in its proper home district (taking into account venue and jurisdictional concerns as 
well) and then later return to that district for trial. 28 U.S.C. § 1407. The Court has 
also not been able to find persuasive caselaw that explains precisely, with regard to 
statutory and precedential authority, how plaintiffs may be added “directly” to an 
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MDL where venue and personal jurisdiction would not otherwise be proper in the 
transferee district. Nor is there direct authority for the proposition that either this 
Court or the transferor court can prejudge adding a plaintiff into another pre-existing 
case.   
 
The cleanest solution, and one that is most evidently in keeping with § 1407, 
is to require any new plaintiffs to file new cases in their home districts (they presum-
ably can file them as co-plaintiffs), and for those actions then to be transferred into 
the MDL. At that point, those plaintiffs can choose to consolidate their cases with 
those of the bellwether plaintiffs in whole or in part. Because the Judicial Panel on 
Multidistrict Litigation has already, of course, entered a transfer order establishing 
MDL 2964, R. 1, district courts around the country are on notice to transfer relevant 
cases to this Court. Indeed, a number of tag-along cases have already been filed in 
other districts and then transferred to this Court within days. Any delays in the pro-
gress of the litigation under the MCAC would thus be minor and well worth the clar-
ity all parties will gain for remand purposes. 
 
The Court therefore orders any new plaintiffs to file actions in their home dis-
tricts (assuming proper jurisdiction and venue) and then to ensure that those actions 
are transferred before this Court. The Court will set a filing deadline for the MCAC 
with ample time for this process to be completed, so that any new plaintiffs can be 
consolidated in the bellwether action as the new and existing bellwether plaintiffs see 
fit. 
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This approach preserves all parties’ Lexecon rights, as it will be eminently clear 
where (and in which case) each action should be remanded for trial at the appropriate 
time in the litigation. Society’s other Lexecon worry, that the Plaintiffs seek to waive 
its Lexecon rights as well as their own, is misplaced and premature. The MCAC con-
tains a waiver of plaintiffs’ Lexecon rights insofar as the plaintiffs named in the 
MCAC “believe that all claims should proceed before this Court for all purposes and 
all such parties consent to venue and personal jurisdiction in this Court.” See MCAC 
at 1. No fair reading of this language could construe it as plaintiffs’ attempt to waive 
the Lexecon rights of Society, nor do plaintiffs have the ability to do so. See, e.g., In re 
Depuy Orthopaedics, Inc., 870 F.3d 345, 351 (5th Cir. 2017). Society has made abun-
dantly clear that it does not wish to waive its own Lexecon rights at this time. Soci-
ety’s Opp. at 9–10. (If any claims within the MCAC are eventually certified as class 
actions, and if any of those class actions proceed to trial, then that might obviate the 
return of cases to transferor courts, but that bridge can be crossed later.) 
 
Moving on to the addition of claims (as distinct from plaintiffs) directly via the 
MCAC, there is less to be concerned about. So long as the amended complaint ade-
quately relates back to the original complaint, “assert[ing] a claim or defense that 
arose out of the conduct, transaction, or occurrence set out—or attempted to be set 
out—in the original pleading,” Fed. R. Civ. P. 15(c)(1)(B), and the new claims are not 
prejudicial, futile, or otherwise improper, it is routine for amended complaints to 
change the legal theory of the case somewhat. “[A]lthough the exercise of consolida-
tion implies a gathering of existing claims, the fact that the consolidated complaint is 
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not a perfect reflection of the underlying claims does not offend the consolidation pro-
cess, nor does it unduly prejudice or benefit any party to this litigation.” In re Fluid-
master, Inc., 149 F. Supp. 3d 940, 948 (N.D. Ill. 2016) (emphases in original). The new 
claims in the MCAC “are not bad faith attempts to refocus the litigation or to other-
wise avoid some necessary procedural framework.” Id. Rather, “they are minor re-
workings of existing claims among existing parties that reflect the natural evolution 
of claims in an MDL proceeding, and allowing these changes will assist in the efficient 
litigation of this consolidated proceeding.” Id. (emphases in original). Just so here. 
The new claims arise out of Society’s denial of coverage for pandemic-related loss of 
business, and are substantially similar to claims previously asserted. Especially be-
cause this litigation is only at the discovery stage, and existing discovery can easily 
be applied to the new claims, there is no undue prejudice to Society by allowing these 
new claims (provided, of course, that they are asserted by proper plaintiffs). 
In short: the new plaintiffs that were sought to be added “directly” via the 
MCAC are stricken, for now. If the new individual and existing bellwether plaintiffs 
wish to include them in the MDL litigation before this Court, they must file new ac-
tions in the appropriate district courts and wait for those actions to be transferred in 
to MDL 2964 here. At that point, they may seek to consolidate those new actions via 
the MCAC. Accordingly, the Court proposes August 16, 2021, as the filing deadline 
for the MCAC in order to give enough time for this process to be completed. The Plain-
tiffs may add new claims via the MCAC provided they are asserted by proper plain-
tiffs and are otherwise sufficiently related to the transactions and theories alleged in 
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the original complaint. As described above, Society will, of course, have the oppor-
tunity for Rule 12 and 56 practice targeted at any new claims in the MCAC that are 
not covered by the Opinion of February 22, 2021, R. 131, and can raise any further 
arguments against those claims at that time. 
As a final point, so that discovery can continue to move forward as quickly as 
possible, all parties are instructed to treat the draft MCAC as the anticipated plead-
ing for now, which will become operative (perhaps with further minor changes) once 
the Court formally accepts it after the filing deadline. 
III. Society’s Proposed Motion to Dismiss 
 
Society’s motion to file a dismissal motion against all claims in the MDL ac-
tions premised on Civil Authority or Contamination coverage, R. 175, is denied in 
large part as unnecessary. Because the Court proposes to deem Society’s earlier Rule 
12(b)(6) and Rule 56 motions as renewed against the Master Consolidated Amended 
Complaint, and the Court will apply the prior Opinion against the MCAC and against 
identical coverage claims in other non-bellwether actions, those claims would be de-
cided in Society’s favor.  
But the key word in the preceding sentence is “identical.” The Court is not 
confident that all of the actions listed in Society’s proposed motion to dismiss are truly 
identical in their pleading of Civil Authority and Contamination coverage. To the ex-
tent that some claims in some non-bellwether actions may be meaningfully distin-
guishable from the claims decided in the Opinion of February 22, 2021, R. 131, those 
claims are neither superseded by the MCAC nor dismissed at this time. Those claims 
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18 
 
 
will proceed on a separate litigation track, and Society can pursue further Rule 12 or 
56 practice against those claims as it sees fit. As the Court held above, it is not ap-
propriate to treat the MCAC as superseding all other individual plaintiffs’ claims at 
this time, and the cases cited in that section of the opinion hold that actions within 
an MDL retain their separate status and may be handled as such for all pretrial pur-
poses (including dismissing or entering summary judgment on those claims) for dis-
tinct reasons. 
To understand why some of the Civil Authority claims and Contamination 
claims are not necessarily identical to the bellwether claims, it is useful to explain 
again the reasoning in the decision granting summary judgment to Society on those 
claims in the bellwether actions. R. 131, Mem. Op. and Order, at 24–28. First, the 
Court dismissed claims based on the Civil Authority coverage on the basis that plain-
tiffs had not pleaded that government orders prohibited all access to their premises. 
The Civil Authority coverage pays for loss of income caused by action of a civil au-
thority that “prohibits access” to the insured’s premises and to the “area immediately 
surrounding” the property.” See Businessowners Special Property Coverage Form, 
5.k (cited and discussed in more detail at R. 131 at 24–25; full copies of the insurance 
policy can be found, e.g., at R. 14, 1:20-cv-05981, Exh. A; R.  1, 1:20-cv-02813, Exh. B; 
R. 29, 1:20-cv-02005, Exh. D). But the Court identified a key problem for the bell-
wether plaintiffs: 
Specifically, the policy’s text requires that the civil authority “prohibit[] access 
to the described premises,” and that “[a]ccess to the area immediately sur-
rounding the damaged property is prohibited by civil authority as a result of 
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19 
 
 
the damage, and the described premises are within the area.” Businessowners 
Special Property Coverage Form, 5.k. As Society correctly observes, even if the 
general public is prohibited from congregating in the covered premises, there 
is no allegation that employees are outright prohibited from accessing the prem-
ises—or from accessing the immediately surrounding areas, for that matter. In-
deed, for some of the Plaintiffs, take-out customers and in-room dining guests 
may access the premises (and the immediately surrounding areas). The Civil 
Authority coverage is not triggered by mere “loss of” property; there must be 
“prohibited” “access.” 
 
R. 131 at 25 (emphasis added). 
 
The Court’s review of the pleadings in the cases that Society listed in its pro-
posed motion to dismiss, see R. 175-2, Exh. 1, reveals that most of them likewise do 
not plead a complete lack of access to the premises. Without this key ingredient, those 
claims based on Civil Authority coverage cannot proceed, and once Society’s earlier 
motion is deemed renewed in response to the MCAC, those claims will be dismissed. 
But a few cases do appear, at least on an initial review, to possibly plead a complete 
lack of access (that is, including employees and ownership, and not just members of 
the public). These cases, with paragraph citations to their operative complaints, are: 
 Deerfield Italian Kitchen, Inc. v. Society Insurance, Inc., 1:20-cv-03896, which 
pleaded that government orders prevented access and that plaintiff has had to 
“cease and/or significantly reduce operations at all its locations.” ¶¶ 46–47. 
 Peg Leg Porker Restaurant, LLC v. Society Insurance, 1:20-cv-05979, which 
pleaded that “The events discussed in the paragraphs above (Executive Orders, 
Metro Orders, Safer at Home Orders and COVID-19 exposure), and others that 
will follow the filing of this lawsuit, have rendered the Insured Premises 
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20 
 
 
untenantable and forced Plaintiff, through no fault of its own, to cease business 
activities at the Insured Premises on March 20, 2020.” ¶ 24. 
 Wiseguys Pizzeria & Pub LLC v. Society Insurance, 1:20-cv-06159, which 
pleaded that the government closure orders prohibited access to the covered 
property and the area immediately surrounding the covered property. ¶¶ 52, 
83. 
 R. Latitude, Inc. v. Society Insurance, 1:21-cv-01292, pleaded that the govern-
ment-ordered closure of its business was not only due to the general shutdown 
orders, but was more specifically mandated because 20 individuals who had 
been on its premises tested positive for Covid-19. ¶¶ 94–95. 
Again, the Court has not yet decided whether these claims will survive a motion to 
dismiss. But given that these allegations are not squarely within the parameters of 
the Court’s earlier Opinion, the Court will give each set of plaintiffs in these cases 
and Society the opportunity to submit further briefing if they want. 
 
Second, the Court dismissed the bellwether plaintiffs’ claims based on the pol-
icy’s Contamination coverage on the basis that there had been no specific allegations 
that their premises had in fact been contaminated or shut down due to the possibility 
of contamination. R. 131, Mem. Op. and Order, at 26–28. The Court reasoned: 
The text of this coverage provision requires, first and foremost, that the Plain-
tiffs’ “operations” be “suspended” due to “contamination.” [Businessowners 
Special Property Coverage Form, 5.m.] “Contamination” is defined as “a defect, 
deficiency, inadequacy, or dangerous condition in your products, merchan-
dise[,] or premises.” Id. § 5.m(4)(a). As Society notes, the Plaintiffs have main-
tained operations during the pandemic, and the suspensions of business have 
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21 
 
 
not been caused by contamination of the premises, machinery, or equipment 
themselves. R. 114, 20 C 2005, Def.’s LR 56.1 St. of Undisputed Mat. Facts, 
¶¶ 39–78. And the Plaintiffs have not made a particularized factual argument 
that one or more of them has been closed due to actual COVID-19 contamina-
tion of the premises, machinery, or equipment. R. 125, 20 C 2005, Pls.’ Resp. 
to Def.’s LR 56.1 St. of Facts, ¶¶ 39–78. 
 
R. 131 at 26 (emphasis in original). The second portion of the Contamination coverage 
provision on which the Plaintiffs relied “requires that the Plaintiffs’ ‘operations’ be 
‘suspended’ due to ‘contamination,” Businessowners Special Property Coverage Form, 
5.m, and plaintiffs had not alleged “suspensions of business … caused by contamina-
tion of the premises, machinery, or equipment themselves.” R. 131 at 27.  
Like the Civil Authority coverage, the Contamination coverage also requires 
that a government authority completely prohibit access to the premises or prohibit 
the “production of your [policyholders’] product.” Businessowners Special Property 
Coverage Form, 5.m(2)(a). However,  
The Plaintiffs have not been prohibited from accessing the premises, and many 
have continued to produce food for take-out and delivery purposes. R. 114, 20 
C 2005, Def.’s LR 56.1 St. of Facts, ¶¶ 39–78; R. 125, 20 C 2005, Pls.’ Resp. to 
Def.’s LR 56.1 St. of Facts, ¶¶ 39–78. And given the definition of “contamina-
tion,” there is no loss of income due to “contamination threat” or “publicity” 
from contamination, Businessowners Special Property Coverage Form, 
5.m(2)(b), (c), because it is not the premises, machinery, or equipment them-
selves that have been contaminated. 
 
R. 131 at 27. For these reasons, the Court held that the bellwether plaintiffs had not 
pleaded any losses that could fall within the Contamination coverage. 
 
Similarly, the Court’s initial review of the cases listed by Society in R. 175-2, 
Exh. 1, reveals that most of those plaintiffs likewise do not plead that their premises 
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22 
 
 
were, in fact, contaminated by the novel coronavirus and had to shut down as a result, 
or that their business was damaged by the resulting publicity. Nonetheless, a handful 
of complaints do appear to plead that the virus in fact contaminated those restau-
rants’ premises and that that contamination forced closure or other loss of business. 
These cases, with paragraph citations to their operative complaints, are: 
 Biscuit Café Inc. et al. v. Society Insurance, Inc., 1:20-cv-02514, which alleged 
that “the continuous presence of COVID-19 on or around Plaintiffs’ premises 
has damaged property by infecting it and has rendered the premises unsafe, 
uninhabitable, and unfit for their intended use”; the complaint further alleged 
that people carrying COVID-19, as well as COVID-19 viral particles, had been 
physically present on the premises. ¶¶ 54–56. 
 726 West Grand LLC et al. v. Society Insurance, 1:20-cv-03432, which alleged 
contamination by Covid-19 “in or around Plaintiffs’ premises.” ¶ 96. 
 The Whistler LLC et al. v. Society Mutual Insurance Company, 1:20-cv-03959, 
which alleged that “The impacts of COVID-19 on surfaces and objects consti-
tute ‘a dangerous condition’ in Plaintiffs’ and Class Members’ premises and, 
therefore, ‘contamination’ as that term is used in TBP2 (05-15).” ¶ 40. 
 Peg Leg Porker Restaurant, LLC v. Society Insurance, 1:20-cv-05979, alleged 
that “On or about March 11, 2020, an individual infected with the COVID-19 
virus entered the Insured Premises and occupied the dining room, kitchen, 
bathroom and business offices of the Insured Premises. Upon information and 
belief, this patron touched and otherwise made contact with doors, utensils, 
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23 
 
 
cooking services, light-switches, bathroom fixtures, furniture and other com-
mon restaurant surfaces/items thereby infecting numerous areas of the in-
sured Premises with the COVID-19 virus and creating a dangerous property 
condition therein.” ¶ 23. 
 R. Latitude, Inc. v. Society Insurance, 1:21-cv-01292, which alleged, as dis-
cussed above with regard to the Civil Authority coverage, that more than 20 
individuals who had been on its premises tested positive for Covid-19 and that 
its closure was due at least in part to this fact. ¶ 94–97. 
Again, the Court has not yet decided whether these claims will survive a motion to 
dismiss. But given that these allegations are not squarely within the parameters of 
the Court’s earlier Opinion, again the Court will give Society and each set of plaintiffs 
in these cases the opportunity to submit further briefing if they so desire. 
 
These actions are exempted from blanket dismissal on a claim-by-claim basis. 
That is to say, nearly all of the plaintiffs in Society’s list alleged coverage under both 
the Civil Authority and Contamination coverages. If the Court has listed a case under 
one coverage provision but not the other, that means that the Court will allow the 
case to continue on a parallel litigation track only as to that particular coverage pro-
vision. Some of the cases are listed under both coverage provisions and therefore may, 
of course, continue proceeding as to both unless one or both claims are dismissed or 
proceed to final judgment. 
 
 
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24 
 
 
IV. Conclusion 
The Plaintiffs’ motion for leave to file the MCAC, R. 152, is granted in part as 
explained in this Opinion. Society’s motion to file a dismissal motion against all 
claims in the MDL premised on Civil Authority or Contamination provisions, R. 175 
is denied as unnecessary. The Plaintiffs may file the Master Consolidated Amended 
Complaint on August 16, 2021. The Court proposes that Society’s earlier Rule 12 and 
56 motions will be deemed renewed and denied as against the claims for interruption 
of Business Income, and deemed renewed and granted as against the claims based on 
the Civil Authority and Contamination except for the specific cases listed above (fur-
ther briefing will be set on those claims as needed or requested). At the next status 
hearing, the Court will discuss the answer and response deadline to the new claims 
in the Master Consolidated Amended Complaint. 
 
 
 
 
 
 
 
 
 
ENTERED:  
 
 
 
 
 
 
 
 
 
 
 
s/Edmond E. Chang 
 
 
 
 
 
 
 
 
 
Honorable Edmond E. Chang 
 
 
 
 
 
 
 
 
United States District Judge 
 
DATE: August 1, 2021 
 
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