Starjem Restaurant Corp v. Liberty Mutual Insurance

Background

Starjem Restaurant Corp., doing business as Fresco, brought a proposed class action against Liberty Mutual Insurance Company. According to the parties’ joint letter, the proposed class consisted of Liberty Mutual insureds whose businesses were closed because of COVID-19-related government stay-at-home orders and whose coverage claims were denied by Liberty Mutual. The letter stated that the plaintiff believed federal jurisdiction arose under 28 U.S.C. § 1332(d).

At the time, competing motions were pending before the Judicial Panel on Multidistrict Litigation, a federal panel that considers transferring related cases to one court for coordinated pretrial proceedings. Those motions concerned COVID-19-related business-interruption insurance claims, including this action. The parties asked the district court to pause the case while the panel considered transfer and consolidation.

Order

The court granted the parties’ joint request for a stay. The stay covered the case generally, including scheduling deadlines, discovery, and Liberty Mutual’s deadline to answer or otherwise respond to the complaint.

Under the parties’ request, if the Judicial Panel on Multidistrict Litigation denied consolidation, the stay would automatically end seven days after that decision. Liberty Mutual would then have 21 additional days to answer, move, or otherwise respond to the complaint. The parties stated that the stay would not waive their rights or defenses except as expressly provided in the request.

Effect of the ruling

This was a procedural scheduling order. It paused the litigation but did not decide the insurance-coverage claims, the proposed class, or the pending transfer and consolidation issue. Judge Edgardo Ramos entered the order on June 4, 2020.