By Matthew Santoni

Law360 (April 20, 2021, 6:30 PM EDT ) A Pennsylvania appellate panel questioned Tuesday whether being the first to sue Erie Insurance over coverage of pandemic-related losses allowed a Pittsburgh restaurant to ask an Allegheny County court to lump together all the other cases against Erie from around the state, or if the request had to come from a common party to all the suits.

Amid an appeal of Court of Common Pleas Judge Christine Ward's order coordinating all current and future COVID-19 coverage cases against Erie in her Allegheny County courtroom, the judges of the Superior Court sought to clarify who could use the Pennsylvania Rules of Civil Procedure to coordinate similar cases and whether Joseph Tambellini Inc. could be the one to initiate it without being involved in the other lawsuits.

"Only Erie and Tambellini were in the case originally," said Judge Victor P. Stabile. "The rule says that all the other parties had to get notice; … they were deprived of that under the order."

Scott Cooper of Schmidt Kramer PC, representing Tambellini, said many of the other plaintiffs around the state who had sued Erie had gotten notice before the coordination order was entered and had the chance to oppose it — including the attorney for a group of plaintiffs who joined Erie in arguing against the order before the appellate court.

Judicial economy and the common question that had to be answered for every case — whether businesses' losses due to the virus should be covered by their insurance company — justified coordinating cases to answer that question, he said.

"In this situation, there are really only four words everyone is trying to have interpreted: 'physical loss or damage,'" Cooper told the panel. "They're not parties to the action, but they're parties to the issue."

Cooper said that Tambellini, an Italian restaurant in Pittsburgh's Highland Park neighborhood, had been the first business in the state to sue Erie seeking a court declaration that the pandemic and the state-ordered closures should be covered by Erie's business insurance policies.

Representing several businesses filing individual lawsuits and proposed class actions against Erie, Cooper and his co-counsel had asked the Supreme Court of Pennsylvania for a "King's Bench" ruling toward the beginning of the pandemic that would have settled the issue statewide, but the justices declined.

Back in the Court of Common Pleas, Tambellini asked for and got the coordination order, which told Erie to notify anyone currently suing or those who file suit in the future that their cases would be coordinated under Judge Ward. Plaintiffs who didn't think they belonged in Allegheny County could file objections with Judge Ward.

Erie appealed the order and was joined in its opposition by Munley Law PC, a law firm representing about 30 businesses in the first wave of objectors.

Since then, many court rulings have gone in the insurers' favor, but Judge Ward had recently been one of a few to say that under Pennsylvania law, the pandemic should be covered as "physical loss or damage" to a business' property.

Frederick Santarelli of Elliott Greenleaf PC, representing Erie, said Judge Ward's coordination order had misinterpreted the rules concerning which parties can request cases be grouped together. Even though Tambellini had asked for it, it was Erie that was then forced to find every party that had sued it and tell them they had to go to Allegheny County to argue against the coordination order or ask to be let out of it.

He said the opportunity to object was not an adequate remedy. Unlike in a class action, where there are rules and precedents for how a member of the class could opt out, there were no such standards for a party objecting to the coordination order.

"To have them forced to go to Allegheny County, to have them prove they don't want to be there, that's where it oversteps the rule," Santarelli said.

Senior Judge Dan Pellegrini asked if judges from different counties could talk to one another to discuss coordination and send cases to one another, but Judge Deborah A. Kunselman said she didn't think judges could coordinate without prompting from another party.

Santarelli argued that the only party to all the cases — and the only party who could ask for coordination — was Erie, but he said having individual courts handle the cases filed in their own counties was working well, with some cases moving up to the appellate level where the coverage question could eventually be interpreted.

Though the appeal had stopped Judge Ward from working out a case management order to say what the various parties' and lawyers' roles would be in the coordinated cases, attorney Melinda Ghilardi of Munley Law said that coordination has forced businesses from other counties to rely on some other attorney leading the cases in Allegheny County.

"Coordination deprives them of their choice of counsel in the county where they live and work," Ghilardi told the panel. "Coordination deprives them of their choice of venue."

Judge Kunselman asked if the rules favored coordination in the venue where the first case was filed, or the first party to file it. Cooper said that Tambellini had been the first plaintiff to ask the question, but Erie or the Munley plaintiffs could just as easily have asked a judge to pull Tambellini into another county if there were compelling reasons like more cases filed against Erie there.

Tambellini is represented by John P. Goodrich and Lauren Renee Nichols of Goodrich & Associates PC; Scott B. Cooper of Schmidt Kramer; James C. Haggerty of Haggerty Goldberg Schleifer & Kupersmith PC; Michael J. Boni, John Elliott Sindoni and Joshua D. Snyder of Boni Zack & Snyder LLC; and Jonathan Shub of Shub Law Firm LLC.

Erie Insurance is represented by Robert T. Horst and Matthew B. Malamud of Timoney Knox LLP; Richard W. DiBella, Paul K. Geer and Tara L. Maczuzak of DiBella Geer McAllister & Best PC; Matthew G. Boyd and Frederick P. Santarelli of Elliott Greenleaf PC; and Adam Kaiser of Alston & Bird.

The Lackawanna County businesses are represented by Marion K. Munley, Melinda C. Ghilardi and Katie Nealon of Munley Law PC.

The case is Joseph Tambellini Inc. v. Erie Insurance Exchange, case number 903 WDA 2020, in the Superior Court of Pennsylvania.

--Editing by Steven Edelstone.

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