Federal Courts’ Recalcitrance in Refusing to Certify State Law COVID-19 Business Interruption Insurance Issues

10 Pages Posted: 23 Mar 2022 Last revised: 21 Jun 2022

See all articles by Christopher C. French

Christopher C. French

The Pennsylvania State University (University Park) – Penn State Law

Date Written: March 22, 2022

Abstract

Over 2,000 COVID-19 business interruption insurance cases have been filed in state and federal courts the past two years with most of the cases filed in or removed to federal courts. The cases are governed by state law. Rather than certify the novel state law issues presented in the cases to the respective state supreme courts that ultimately will determine the law applicable in the cases, each of the eight federal circuit courts to issue decisions on the merits in such cases to date has done so by making an Erie guess regarding how the controlling state supreme courts would decide the cases.

This Essay argues the federal circuit courts’ decisions to make Erie guesses rather than certify the novel COVID-19 business interruption state law issues is a mistake that federal courts also have made in the past in regard to nationwide insurance coverage litigation governed by state laws. The Essay also argues that U.S. Supreme Court precedents regarding the abstention doctrine support state supreme court certification regarding the novel state law issues presented by COVID-19 business interruption insurance cases. Finally, the Essay discusses how early federal circuit court decisions on COVID-19 business interruption insurance claims are having a butterfly effect with respect to subsequent court decisions because other courts are relying upon, and adopting, the reasoning and holdings—right or wrong—of the federal circuit court decisions.

Keywords: COVID, business interruption, Erie, abstention, insurance, certification, supreme court

JEL Classification: K12, K23, K41

Suggested Citation

French, Christopher C., Federal Courts’ Recalcitrance in Refusing to Certify State Law COVID-19 Business Interruption Insurance Issues (March 22, 2022). 100 Tex. L. Rev. Online 152 (2022), Penn State Law Research Paper No. 6-2022, Available at SSRN: https://ssrn.com/abstract=4063893

Christopher C. French (Contact Author)

The Pennsylvania State University (University Park) – Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

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