Insurers And Amici Resist Application For Pennsylvania Supreme Court’s Exercise Of King’s Bench Jurisdiction Over COVID-19 Coverage Cases

May 7, 2020

On May 7, 2020, Erie Insurance Exchange-along with AIG as an Amicus and several proposed Amici from the insurance industry-responded to a policyholder’s application for the Pennsylvania Supreme Court to exercise its extraordinary “King’s Bench” jurisdiction to effectively leapfrog the lower Pennsylvania courts and broadly rule on the issue of whether property insurers must extend business interruption coverage to businesses within the Commonwealth that claim business losses as a result of the COVID-19 pandemic.

The application was filed by a Pittsburgh-based restaurant, which initiated an action for declaratory and injunctive relief in the Court of Common Pleas of Allegheny County against Erie, seeking a declaration that coverage under its policy with Erie should extend to its business losses arising out of the shutdown occasioned by the virus. Joseph Tambellini, Inc. v. Erie Ins. Exch., GD No. 20-5137 (Pa. Com. Pl. Apr. 17, 2020). In its application, the restaurant requested that the Pennsylvania Supreme Court immediately exercise jurisdiction over the proceedings in order to expeditiously streamline the decision of whether the restaurant and other Pennsylvania business establishments should be covered for allegedly similar COVID-19 related business losses.

In urging the Pennsylvania Supreme Court to reject the application and to refrain from exercising its King’s Bench Jurisdiction, Erie and the Amici argued that because different insurers utilize different coverage forms-and because each claim presents facts and circumstances unique to each individual policyholder-this particular case would not (and could not) set a precedent for other COVID-19 business interruption claims presently pending throughout the Commonwealth.

Erie further argued that while the COVID-19 crisis is indisputably a matter of national importance from a public health standpoint, the contractual disputes relating to the availability of insurance coverage for business income losses do not rise to the level of “immediate public importance” for the purposes of the Court’s exercise of extraordinary jurisdiction under 42 Pa.C.S.A. § 726.

Indeed, the Pennsylvania Supreme Court has published 112 opinions analyzing its powers of extraordinary jurisdiction. None has involved issues of insurance coverage.

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