T exas W i nd st o rm’s m o t i o n co vers f o rt y - t wo of t he 1 1 , 0 0 0 i nsur ance clai m s agai nst i t ari si ng f rom H urr i cane 1 R ita. T h irty-nin e c a se s h a v e b e e n fi le d in J e ff e rs o n C o u n ty, tw o in G a lve sto n , an d o n e in T ra v is 

## . 

# N O 

# . 08- 0914 I N RE 

# T EXAS 

# W IN D S T O R M 

# I NSUR AN CE 

# A S S OCI AT I ON 

# H UR RICAN ES 

# RI T A AND 

# H UMBERT O 

# L I T I GAT I ON 

# O N 

# RE V I E W 

# B Y THE 

# M UL TI DIS TRI CT 

# L I T I GAT I ON 

# P AN EL


## P R ES I DI NG 

## J UDG E 

## P EEP L ES 

## de liv e re d th e op ini on of theMD Lpa

ne l. T e x a s W i n d s t o r

mIn s ur an c e A s s o c i at i o ns e e k s a p p o i ntm e nto f

a p r e tr i a l j u d g e f

o r f o rtytw o c a se s invo lvi nghurric ane ins ur anc e c la ims in Je ff e rs on , G a lve sto n, and

Tr avis Counti e s. 1 

## Thirty-eight case s arise f

rom HurricaneRita and four f rom HurricaneHumberto. F or the re asons stated below w e grant the motion. A pre trial judg e has be en appointed by separ ate order. Rul e 13 a uth orize s u s to tr ans fe r “ re late d” c a se s f ro m di ff e re nt t ri a l c ourt s to a

sin g le pretria l judge“if tra

nsfer will (1) servethe conve nienceof the pa rties and witnesse s and (2) promote the just and ef

ficient c onduct of the litig ation.” See I n re Ad Valorem Tax Litigation, 216 S.W .3d 83, 84 (Tex. M.D.L . Panel 2006); T EX 

## . R. J UD 

## . A D M IN 

## . 13.2(f) , 13.3(a) , 13.3( l)
. In In re De lta Insurance Company, e t al., No s. 08 -1 42 , 0 8- 20 28 , &08 -0 42 7 ( Te x. M. D. L . Pa ne l, Se pt. 5, 20 08 ), wetr ans fe rr e d to a pr e tria l ju dg e sim ila

r Hur ri c ane Rita

ins ur anc e c a se s a g a ins t differ ent insurer s. We concluded that the case s wererelated within the meaningof Rule 13 be c a us e theins ur e rs fa c e d s ub sta nti a lly thesame e xtra -c ontr a c tua l c la ims and dis c ov e ry

re qu e sts in ever y case . L ike Texas Winds torm, those insurers did not fa ce me re c ase- specific contra ct claims that they failed to pa

y for da mag es cove red unde r ea ch insuranc e policy . Instead, like Te x asT ho ugh not every l awsui t s eeks preci sel y t he same d i scovery, tw o -third s o f t hem s eek t he d i scovery 2 summ ari zed i n t he t ext ; and al l o f t hem p l ead ext ra- co nt ract ual causes o f act i o n and seek som e d i sco v e ry c o n c e rn i ng t ho se c l aim s.

T he res p o nse f

i l ed by t he l argestgroup of p l ai nt i f f s say s, “ T here are no co m m o n wi t ness es whose t est i m o ny 3 co ul d b e gi ven i n co m m o n f o r al l t he cases. T here are no co m m o n f act ual dis p ut es abo ut whi ch a p ret ri al M D L jud ge cou l d r u l e on ce f

or a l l t h e c as es . ” A n ot h er re s pon s e s t at es , “ T W I A h as f ai l ed t o demon s t r at e t h att h er e i s on e common q u e stio n o f f

a c t b e tw e e n the fo rty-two c a se s it se e k s to tra n sfe r.” 

## 2 Winds torm they

fac ed cla ims that they

had designed and pur sued a standa rd business pra ctice of handlingthese c laims in a way that minimi zed pay

ments to their insureds. That a lleg ation was the foundation for extra-contr actua l damag e cla ims and for discove ry reque sts seeking information about the tra ining of adjusters; cla ims handling proc edure s, instructions, and guid e lin e s; the ha

nd lin gof oth e r c la ims , in c ludingrepo rt s su bmi tte d b y

a dju ste rs in o the r c a se s; complaints and lawsuits by other insure ds; personnel files; a nd net worth. 2 

## We are told that there a

re no c ommon issues in these c ases, but it is difficult to envision 3 

## how the insurer s could g ive any thing other

than identical r esponses to common discover y reque sts like those mentioned, which ar e not ca se-spe cific. We seeno g enuine diff ere nce betwee n these c ases a

nd those befor e the pa

nel in De lta , whe reweana ly zed Rul e 13 ' s im

pa c t in this situation. Also instructive is our discussion in In reOc we n Lo an Se rv ic ing , LLC, No. 07- 00 37 (T e x. M. D. L . Pa

ne l, M ar. 26 , 2 00 7) . T he rethepla int if fs a lle g e d th at th e de fe nd ant, pursuant to standard prac tices, had unla wfully charg ed them fe es, ser

viced their

acc ounts, and fo re c los e d o n th e ir

ho me s. We s a id: The c laims in each of

the nine pendingcase s arebased on standa rd pra ctices a

nd proce dures f

ollowed by

Ocwe n in its busi ness of ser vicingmortg ag e loans. Acc ording ly , in all nine case s, discovery will be aimed at disclosingthe natureof the se c omm on

pr a c tic e s and

pr oc e dure s. In a dd iti on , s imi lar l e g a l is su e s w ill ari se a s to wh e the r t

ho se sta nd ard pr a c tic e s a

nd pr oc e dure s g iveri se to l ia bil ity under the commonly

alleg ed theories. . . . . . . Rule 13 is concer

ned [about] conflicting de mands or repetitive discovery wh ic h w ou ld i nc onve nie nc e bo th t he wi tne sse s a

nd thepa rt ie s. . . . Atr ans fe r w ill

# 3

ensurethat [common] issues aredecide d the same w ay . As contested issues a rise, the pre trial judg e will be ableto make consistent ruling s. Id. at 4. We rea ffirm our holding in De lta that the extra-contr actua l issues make these c ases
re late d w ith in t

he me anin gof

Rul e 13 . We tur

n n owto t

wo oth e r a

rgume nts . 1. Re lat e dne ss— diffe r e nc e s a m ongth e c as e s. Severa l plaintiffs argue that the f orty-two ca ses ar e diffe rent from eac h other in important way s and there forearenot relate d. The fir st differe nce is that thirty-four case s involve residential dwellingpolicies, while eight involve commerc ial policies. The policies, how ever , provide the
same c overa g e for

the same risks. And the extra-contra ctual cla ims are the sa me, as a re the discovery reque sts related to those c laims. The sec ond differ enceis that four of the c ases involve Hurric ane Humbe rt o, wh ic h o c c ur re d a ft e r Rita . We c on sid e r t ho se c a se s r e late d to theRita
case s beca

use they involve prec isely

the same e x tra-c ontrac tual claims and discove ry , and beca use they will involve inquiry

into the exi stence and extent of pre- exis ting damag e from Rit a. It is worth noting that whe n plaintiffs pleade d their extra-c ontrac tual cause s of ac tion and sought extra-contra ctual discove ry , they did not make distinctions based on the kind of policy or
cover ag e or the hurrica

ne involved. B eca

use of the e x tra-c ontrac tual claims, the ca ses ar e re lated within the meaningof Rule 13, eve n though some of them involve a diff ere nt policy

and a later hurrica ne in the same are a. One r esponse sa

y s that the ca ses fa ll into “forty-two sepa rate and distinct fac t patterns.” As we ha ve said be fore , ever

y individual case is diffe rent, but for MDLpurposes Rule 13 mandates tra

nsfer to a pre trial court whe n the ca ses ar e re lated and ha ndling by one pre trial courtIn I n r e Hurr i cane R i t a E vacua t i on B us F i r e, 2 1 6 S
. W
. 3 d 7 0 , 72 (T ex. M
. D
. L. P anel 20 0 6 ), we st at ed our 4 v ie w tha t i n d ivid u a l ca se s a lw a ys d iff e r fro m e a c h o the r, b u t t h is b y it se lf c a n n o t d e fea t an M D L m o tio n : P l ai nt i f f s argue t hat m any o f

t hem are not s i m i l arl y s i t uat ed
. . . . T here m ay i nd eed be dif f erences. B ut every case i s d i f

f erent . N o t wo cases are al i ke. A rul e 1 3 t rans f er of cases d o es not requi re t hat t he cas es be cong r uen t o r any t hi ng cl ose t o i t . I t r equi r es onl y t hatca s es be “ r el at ed”— i
. e. t hatt hey i nvo l ve o ne o r mo re com m o n que st i o ns o f f act

— and t hat t rans f

er wi l l ser ve t he co nveni ence o f t he p art i es and wit ness es and p rom o t e t he jus t and ef f i ci ent co nd uct of t he lit iga tio n . 

# 4 will promote Rule 13's g oals of conve nience , eff iciency , and justice. I f the “ separ ate a nd distinct 4 

## fa c t patte rn s” a sse rt ion

me ans that e a c h o f t

he se c a se s is unre late d to theoth e rs , w e re sp e c tf ull y disagreebeca

use ea ch ca se arises from hurricanedamag e, involves the sameinsurancecover ag e, and involves the sameor similar extra-contra ctual cla ims and discovery discussed above
. The fa ct patter

ns of these c ases a

re no moresepar ate a

nd distinct than those of other c ases in which MDL

motions have bee n grante d. See, e .g., Un ion Carbid ev . A da ms, No. 03-0985 (T e x. M. D. L . Pa

ne l, D e c . 3 0, 20 03 ) ( tr ans fe rringa sb e sto s c a se s to pr e tria l ju dg e ); In re Silica Products Liabil ity Liti

gation, 16 6 S. W.3 d 3 (T e x. M. D. L . Pa ne l 20 04 ); In re Viox

x Litigati on, No . 0 5- 04 36 (T e x. M. D. L . Pa ne l, Aug . 2 5, 20 05 ); In re Ford M otor Company Speed Control Deac tivation Swi tch Litigat ion , No. 07-0953 (T ex. M.D.L . Panel, Feb. 19, 2008). The que stion is not whether the c ases a re diff ere nt. They

are . Eac h of these e arlier case s will invol ve diffe rent
causation and damag es fa cts. Indeed ma ny of the silica a

nd asbestos ca ses involve diffe rent prod uc ts and dif fe re nt defendants. The que stion is whether they arerelated (involvingone or
more c ommon questions of fact) and whe ther tra nsfer to one pre trial judg e will promote the
c onve nie nc e of

thepa rt ie s and wi tne sse s a

nd thee ff ic ie nt h and lin gof

thec a se s. It is also argued that the c ases a re not re lated bec ause no c ase w ill “turn” on the insure r’s g e ne ra l a dju sti ngpr a c tic e s b ut i ns te a d o n h owtheins ur e r a pp lie d th os e a dju sti ngpr a c tic e s in
eac h individual case. Tha t may be true , but the Rule 13 decision does not re st on our estimate ofT he pert i nen t di s cus s i on i n t he Ad V al or em Tax ca se is as foll o w s: 5
C oncer ni ng t he s i mi l ar i t y , or com mo nn es s , of t he propert i es i n t hes e f ort y - t wo di f

f er entcoun t i es , we can not ac cept t he s ug ges t i on t hatt he r eal propert y and i mp r ovement s ar e nec es s ar i l y s i mi l ar t o each o the r e v e n tho u g h the y a re situa te d in d iff e re n t co u n ties o r e v e n in d iff e re n t ar e a s o f t h e sa m e c o u n ty. It i s no do ub t t rue t hat t he i nvent o ry at s o m e co nveni ence s t o res , i n co nt ras t t o t he real t y , m ay have a s om ewh at un i f

orm va l ue i n di f

f er entpar t s of t he s t at e, but we t hi nk t hatdoes not conv er t t hes e c as es i nt o r el at ed cas es . T he va l uat i on o f p r op er t y , cert ai nl y t he major ki nds o f p r op er t y at i s s ue her e, i s an i nherent l y i nd i vi d ual i zed and l o cal pro cess . V al ero ad m i t s t hi s, as i t m ust , when i t s ays “ t he det er mi nat i on o f

each i ndi vi dual P r op er t y ’ s ap prai s ed val ue ul t i mat el y wi l l t ur n on t he cha r act er i s t i cs s peci f i c t o t hatP r op er t y . ” .
. . V al er o h as s i mp l y not s hown how t he apprai s al of di f f er entproper t i es i n di f f er entpar t s of

T exa s wil l inv ol ve com mo n que s t i ons of f act . I ndeed, t he i ndi vi dual i zed f act i nq uiri es i n these ap p raisal case s pre po nd er at e o verwh at eve r com m on i s s ues t her e m ay be. B ec au se propert y va l uat i on i s s uch an i ndi vi dual i zed and l ocal i nqui r y , and becau s e i t i s t he core i s s ue i n e ach of t hes e c as es , we r es pect f ul l y r ej ect t he ar gu ment t hatt hes e cas es i nv ol ve one or mo r e c om mo n f act q u e stio n s w ithin the m e a n ing o f rule 1 3
. 2 1 6 S.W
. 3 d at 85 (emp hasi s ad d ed ). 

## 5 what will be the major

focus in a c ase. Tr ansfe r may be prope r “e ven though in a g iven ca se the common issues might not outweigh the individual case -spec ific issues.” In reSilic a Pro du c ts Liabil ity Liti

gation, 166 S.W .3d at 6. Undoubtedly case s that g o to trial will focus on the fa cts of the par ticular c ase be ing tried. B ut the Rule 13 inquiry is whether c ases have one or more questions of fac t in common. I f we wer e expected to we igh theimportance of the va rious issues to the litigants, the lawyers might have to pre dict and disclose their trial strategy

to us. Rule 13 does not contemplate such we ighingof issues and their importance . Plaintiffs point outthat in In re Ad Valorem Tax Litigation , we stre ssed the loca l nature of the disputes and said that the loc al iss ue s p re do min ate d o ve r t he c omm on

on e s. B ut whe n th at st ate me nt i s c on sid e re d in c onte xt it

5 

## is appare nt that we we re not ba lancingthe importanceof issues when w e dec ided the issue of
re late dn e ss. We respec tfully

reje ct these a

rguments that the forty-two ca ses ar e so diffe rent from eac h other that they

arenot relate d.P l ai nt i f f s m ent i o n t hat when we d eni ed an M D L m o t i o n i n I n r e V an der bi l tM ort

ga ge an d F i na nce, I

nc. , 166 6 S .W .3 d 1 2 (T e x . M .D .L . P a n e l 2 0 0 5 ), w e stre sse d tha t tw o o f t h e six c a se s w e re e sse n tially d isc o v e re d a n d se t f o r tria l. B ut readi nes s f

or t r i al was o nl y o ne f

act or a mo ng many i n t hatca s e; we deni ed t he V a n d e rb ilt m o t i o n b ecause we we re no t p ersu ad ed t ha t assigning the c ase s t o o ne p retri al jud ge wo uld p r o m o te co nv en i en ce o r eff i cien cy, as t he l ast p a ra g ra p h in tha t o p inio n m a k e s c le a r. I d. a t 15. “T h e trial c o u rt m u st no t co n tinu e o r p o stp o n e a trial se tti n g w itho u t the c o n c u rr e n c e o f t h e p re tria l co u rt.” 7 See T EX . R. J UD . A D M I N . R ul e 1 3
. 6 (d).

“T h e trial c o u rt sh o u ld r e c o g n iz e tha t t o a lter a p re tria l co u rt o rd e r w itho u t a c o m p e lli n g ju stif ic a tio n w o u ld 8 f r us t r at e t he pur po s e of

cons ol i dat ed an d coo r di nat ed pret r i al procee di ng s . ” See T EX . R. J UD . A D M I N . R ul e 1 3
. 8 (a)
. 

## 6 2. Co nve nie nc e and e ffici e nc y— c om ple te d dis c ov e r y a nd t r ialse tt ing s. Plaintiffs argue that tra

nsfer to a pre trial judg e would not servethe intere sts of convenie nce or

eff iciency . In four c ases the pla intiffs oppose the MDL motion because discovery in their ca ses is substantially complete a

nd the ca ses ar e set for

trial in early

2009. This argument
re sts on thea ssumption

that c omp le tio n o f disc ov e ry and thee xiste nc e of

a tria l se tti ngwi ll immuniz e a c ase f

rom MDL

proce dures. That assumption is errone ous beca use Rule 13 6 

## contemplates that the pretria l judgewill be involved in the details of trial setting s. When discovery is complete and a

n MDLcaseis ready

for tria l, Rule 13 does not allow the pre trial judgeto simpl y

return thecaseto the trial court without consultation or fur ther instructions. On the contra ry , when r emandinga ca se the pre trial judg e is instructed to: (1) c onsult with the trial jud g e a bo ut t he tria l se tti ng , ( 2) c on sid e r t he c onve nie nc e of

thepa rt ie s a nd wi tne sse s in

the
re ma nd e d c as e , and (3) consider theeff icient handlingof the case s remaining in the MDL procee ding
. SeeT EX 

## . R. J UD 

## . A D M IN 

## . Rule 13.6 (d). A r emande d caseis not to be give n an ordinary trial setting; whe n a trial date is set and a c ase r emande d, the trial judg e ca nnot continue
or re se t th e c a se wi tho ut t

he pr e tria l ju dg e ’s c on se nt. 7 

## Pretrial judg es ar e grante d continuing a uthority over r emande d case s for the pla in rea son that continuance s, rese ttings, and f urther disc overy

afte r re mand could interf erewith the pretria l judge ’s manag ement of the rema ining MDL case s. Rule 13 theref

ore limits the trial judge ’s 8W hi l e we have no i nf o rma t i o n ab o ut t he hand l i ng of d o cket s b y t he co urt s who se cases are be f o re us , we have 9 pr ev i ou s l y e mph as i ze d i n g en er al t er ms t h at t h e M D L s y s t em s h ou l d be a wa r e of doc k etr ea l i t i es w h en c as es a r e s etf or tria l: N or c an w e i g n or e wh atw e as ju dg es kn ow f r om ex per i en ce
— t h ats omet i mes i t ca n be di f f i cu l t f or dedi cat ed but bus y t r i al j udges t o gi ve cas es l i ke t hes e t he del i bera t e, t houg ht f ul , an d f ocus ed pret r i al at t en t i on t h ey de s er v e. I t i s a l s o di f f i cu l t t o g i v e t h em r ea l i s t i c t r i al s et t i n g s , a n d t r i al j u dg es ma y be te m p t ed t o s et cases f

o r t ri al on d at es bef

o re t hey wi l l be t rul y ready, know i ng t hat m any cases w ill se ttl e un d e r th e p re ssu re o f a tria l se tti n g . . . . I n r e Si l i ca Pr oduct

s Li abi l i t y Li t igat i on , 166 S. W
. 3d a t 6.



## 7 power to make ruling s in remande d case s that might interf erewith the rema ining MDL case s. Thus the pre trial judg e, beingresponsible for the ef ficient ha ndling of the entire group of MDL
case s, might wa

nt to ensure that e ach trial setting is a r ealistic one, that it is first on the docke t and not mere ly

one amongmany

case s competingfor attention. 9 

## For all these re asons the pre trial court’ s control over trial settings is an importa nt feature of Rul e 13 ' s MD Lsy ste m. Wec on c lud e tha t th e pr e tria l ju dg e sh ou ld b e g ive n th e op po rt un ity to exercise his discre tion in deciding theconditions to impose on the c ases whe n they arerema nded fo r t ri a l. * * * * * These T exas W indstorm cases have not bee n convincing ly distinguished from those we considere d in Delta, wher e weapplied Rule 13 to similar hurrica ne insuranc e cove rag e ca ses. The c ases be foreus arerelated and, f or the re asons that we e x plained in De lta and nee d not
re p eath er e, i two u l d

p ro m o t e c o nv en i en ce an d ef fi ci en cy t o h av e o n e j u d ge m ak e p re tri al ru l i n gs
on c omm on c la ims and

de fe ns e s, c ov e ra g e iss ue s, and sc op e of dis c ov e ry . T he mot ion

to transfe r is grante d.

J U ST I CE S 

## LANG 

## , H A N KS 

## , S TONE 

## , and M C 

## C L URE 

## concur .

## 8 _______________________________ Dav i d P ee p l es , P re s i d i n g J u d ge

OP INION DELIVERED: J anuar y 27, 2009