Court Opinion

ID: 5140676
Source: CourtListenerOpinion
Date Created: 2021-12-27 16:00:19.08343+00
Date Added: 2024-06-11T08:24:24.902468
License: Public Domain

21-80-cv
     10012 Holdings, Inc. v. Sentinel Ins. Co.

 1                         UNITED STATES COURT OF APPEALS
 2                             FOR THE SECOND CIRCUIT
 3
 4                                      August Term, 2021
 5
 6            (Argued: September 2, 2021               Decided: December 27, 2021)
 7
 8                                     Docket No. 21-80-cv
 9
10                           _____________________________________
11
12                       10012 HOLDINGS, INC. DBA GUY HEPNER,
13
14                                       Plaintiff-Appellant,
15
16                                               v.
17
18                         SENTINEL INSURANCE COMPANY, LTD.,
19
20                                      Defendant-Appellee. *
21                           _____________________________________
22
23   Before:
24
25                   WALKER, CALABRESI, and LOHIER, Circuit Judges.
26
27          10012 Holdings, Inc. d/b/a Guy Hepner, which owns and operates a
28   fine arts gallery and dealership in New York City, sought coverage under
29   three provisions of an insurance policy issued by Sentinel Insurance
30   Company, Ltd. for losses and extra expenses incurred when it suspended its
31   operations in accordance with government restrictions on non-essential
32   businesses during the COVID-19 pandemic. When Sentinel denied coverage,
33   10012 Holdings filed suit asserting claims for breach of contract and
34   declaratory judgment. The United States District Court for the Southern
35   District of New York (Schofield, J.) dismissed the claims with prejudice, and
36   10012 Holdings appealed. Under New York law, the policy provisions that
37   10012 Holdings invokes provide coverage only where the insured suspends

     *   The Clerk of Court is directed to amend the caption as set forth above.
 1   its operations because its property or property in its immediate area suffered
 2   physical damage. Because 10012 Holdings does not plausibly allege such
 3   physical damage, we AFFIRM.
 4
 5                            JOHN V. GOLASZEWSKI, The Casas Law Firm, P.C.,
 6                            New York, NY, for Plaintiff-Appellant 10012 Holdings,
 7                            Inc. d/b/a Guy Hepner.
 8
 9                            JONATHAN M. FREIMAN (Shai Silverman, on the brief),
10                            Wiggin and Dana LLP, New Haven, CT, for
11                            Defendant-Appellee Sentinel Insurance Company, Ltd.
12
13                            Jeremy M. Creelan, Michael W. Ross, Jenner & Block
14                            LLP, New York, NY; John H. Mathias, Jr., David M.
15                            Kroeger, Gabriel K. Gillett, Jenner & Block LLP,
16                            Chicago, IL, for Amici Curiae Restaurant Law Center,
17                            New York State Restaurant Association, and New
18                            York City Hospitality Alliance, in support of Plaintiff-
19                            Appellant and reversal.
20
21                            Joshua L. Mallin, Dennis D’Antonio, Weg & Myers,
22                            P.C., New York, NY, for Amicus Curiae Mario
23                            Badescu Skin Care, Inc., in support of Plaintiff-
24                            Appellant and reversal.
25
26                            Wystan M. Ackerman, Robinson & Cole LLP,
27                            Hartford, CT; Laura A. Foggan, Crowell & Moring
28                            LLP, Washington, DC; James R. Martin, Zelle LLP,
29                            Washington, DC, for Amici Curiae American Property
30                            Casualty Insurance Association and National
31                            Association of Mutual Insurance Companies, in
32                            support of Defendant-Appellee and affirmance.
33
34   LOHIER, Circuit Judge:

35         In a scenario that has become all too familiar during the COVID-19

36   pandemic, 10012 Holdings, Inc. d/b/a Guy Hepner, which operates as a brick-

37   and-mortar art gallery and dealership in New York City, was forced to

                                            2
 1   suspend its operations to comply with government restrictions on non-

 2   essential businesses. As a result, 10012 Holdings could no longer sell

 3   paintings at its gallery and resorted to online sales, with employees allowed

 4   to access the gallery for routine business purposes such as packing and

 5   shipping a painting purchased online. The company, which was insured

 6   under a widely used business property insurance policy (the “Policy”) issued

 7   by Sentinel Insurance Company, Ltd., sought coverage under the Policy for its

 8   business income losses and expenses relating to the gallery’s closure. Sentinel

 9   denied coverage on the ground that 10012 Holdings did not suffer direct

10   physical loss of or physical damage to its property or property within its

11   vicinity, as the Policy required. Invoking three provisions of the Policy, 10012

12   Holdings brought this action for breach of contract and a declaratory

13   judgment that Sentinel was liable for coverage of its COVID-19-related

14   business losses, claiming that the Policy’s references to “physical damage” or

15   “physical loss” include the loss of use of property as a result of the

16   suspension of business operations. The United States District Court for the

17   Southern District of New York (Schofield, J.), applying New York law, agreed

                                             3
 1   with Sentinel’s reason for denying coverage and dismissed 10012 Holdings’s

 2   claims with prejudice under Federal Rule of Civil Procedure 12(b)(6).

 3         For the reasons that follow, we AFFIRM.

 4                                  BACKGROUND

 5         The following facts are drawn from 10012 Holdings’s complaint and

 6   documents attached thereto, and are assumed to be true for purposes of our

 7   de novo review of the District Court’s judgment dismissing the complaint for

 8   failure to state a claim upon which relief can be granted. See Schlosser v.

 9   Kwak, 16 F.4th 1078, 1080 (2d Cir. 2021).

10         In 2019, 10012 Holdings purchased the Policy from Sentinel to cover the

11   period from April 1, 2019 through April 1, 2020. The Policy provides three

12   principal types of coverage relevant to this appeal: “Business Income,” “Extra

13   Expense,” and “Civil Authority.” The Business Income provision requires

14   Sentinel to cover certain business losses incurred if 10012 Holdings

15   suspended its operations due to “direct physical loss of or physical damage

16   to” its property “caused by or resulting from a Covered Cause of Loss.” Joint

17   App’x 83. The Policy defines “Covered Cause of Loss” as “risks of direct

18   physical loss” not otherwise excluded by the Policy. Joint App’x 75. The

                                            4
 1   Extra Expense provision, meanwhile, reimburses “reasonable and necessary

 2   Extra Expense” incurred during a “period of restoration” of the premises

 3   following “direct physical loss or physical damage to” 10012 Holdings’s

 4   property “caused by or resulting from a Covered Cause of Loss.” Joint App’x

 5   83. Finally, the Civil Authority provision extends coverage for business

 6   income losses if access to 10012 Holdings’s premises “is specifically

 7   prohibited by order of a civil authority as the direct result of a Covered Cause

 8   of Loss to property in the immediate area of” 10012 Holdings’s premises.

 9   Joint App’x 84.

10         Starting in March 2020, 10012 Holdings was forced to suspend business

11   operations at the art gallery in compliance with the now well-known

12   executive orders issued by the Governor of New York as the immediate

13   response to the COVID-19 pandemic. Relying on the Business Income, Extra

14   Expense, and Civil Authority provisions, 10012 Holdings demanded that

15   Sentinel reimburse it for the losses and expenses it incurred as a result of

16   suspending its operations. In a letter dated April 3, 2020, Sentinel disclaimed

17   coverage, asserting that “COVID-19 did not cause property damage at [10012

18   Holdings’s] place of business or in the immediate area.” Joint App’x 15.

                                             5
 1         When 10012 Holdings filed this action for breach of contract and

 2   declaratory relief, Sentinel moved to dismiss the complaint. In a brief

 3   opinion, the District Court granted Sentinel’s motion and dismissed 10012

 4   Holdings’s claims with prejudice. 10012 Holdings, Inc. v. Sentinel Ins. Co.,

 5   507 F. Supp. 3d 482 (S.D.N.Y. 2020). The District Court first concluded that

 6   10012 Holdings could not recover under either the Business Income provision

 7   or the Extra Expense provision because, under New York law, the provisions

 8   are unambiguously “limited to losses involving physical damage to the

 9   insured’s property,” which 10012 Holdings did not allege it suffered. Id. at

10   486–88. The Civil Authority provision was also inapplicable, the District

11   Court explained, because it provided coverage only if the closure of 10012

12   Holdings’s business resulted directly from the closure of neighboring

13   properties. Id. at 488. The District Court pointed out that 10012 Holdings

14   was forced to close the gallery for the same reason that its neighbors were

15   required to shutter their businesses, namely, the risk of harm to individuals

16   on its own premises due to the pandemic. Id. at 488–89. Finally, the District

17   Court denied 10012 Holdings leave to amend for the simple reason that “the

18   Policy does not provide coverage for the loss Plaintiff suffered.” Id. at 489.

                                             6
 1         This appeal followed.

 2                                    DISCUSSION

 3         The central question we address is whether the Policy provides

 4   coverage for 10012 Holdings’s financial losses even though 10012 Holdings

 5   does not allege that its closure resulted from physical damage to its property

 6   or the adjoining property of its neighbors. To answer that question, we apply

 7   New York law, which the parties agree governs our interpretation of the

 8   Policy.

 9         Under New York law, “an insurance contract is interpreted to give

10   effect to the intent of the parties as expressed in the clear language of the

11   contract.” Parks Real Est. Purchasing Grp. v. St. Paul Fire & Marine Ins. Co.,

12   472 F.3d 33, 42 (2d Cir. 2006) (quotation marks omitted). “The policy must . . .

13   be construed in favor of the insured, and ambiguities, if any, are to be

14   resolved in the insured’s favor and against the insurer.” U.S. Fid. & Guar. Co.

15   v. Annunziata, 67 N.Y.2d 229, 232 (1986). But “[w]here the provisions of [a]

16   policy are clear and unambiguous, they must be given their plain and

17   ordinary meaning, and courts should refrain from rewriting the agreement.”

18   Id. (quotation marks omitted).

                                             7
 1         I.     The Business Income and Extra Expense Provisions

 2         10012 Holdings argues that it is entitled to coverage under the Business

 3   Income and Extra Expense provisions because the Policy’s use of the term

 4   “direct physical loss,” which appears in both provisions and which the Policy

 5   does not define, plainly includes circumstances where 10012 Holdings is

 6   merely deprived of access to its business property. But New York law

 7   compels us to reject 10012 Holdings’s proposed reading of the term.

 8         In particular, we note that in Roundabout Theatre Co. v. Cont’l Cas.

 9   Co., 751 N.Y.S.2d 4 (1st Dep’t 2002), the First Department rejected a similar

10   reading of the term “loss of . . . property.” Id. at 8. There, a municipal order

11   closed a street for safety reasons following a construction accident at a

12   building in the area. Id. at 5. The plaintiff, a theater company, was forced to

13   cancel several scheduled performances when its theater was rendered

14   inaccessible to the public for several weeks due to the street’s closure. Id.

15   Although the theater itself suffered no physical damage, it sought coverage

16   for its monetary losses under its insurance policy’s business interruption

17   provision. Id. at 5–6. The trial court in Roundabout Theatre ruled in favor of

18   the theater and concluded that the phrase “loss of” as used in the policy’s

                                             8
 1   business interruption provision included the theater’s “loss of use” of its

 2   premises. Id. at 6. Describing the trial court’s interpretation as “flawed,” id.

 3   at 8, the Appellate Division reversed. The policy’s business interruption

 4   provision, the court noted, covered loss of property “caused by the perils

 5   insured against,” which the policy defined as “all risks of direct physical loss

 6   or damage to the [insured’s] property, not otherwise excluded.” Id.

 7   (quotation marks omitted). Given the plain meaning of the words “direct”

 8   and “physical” and the structure of the policy overall, the Appellate Division

 9   held that the provision “clearly and unambiguously provides coverage only

10   where the insured’s property suffers direct physical damage.” Id.

11         We follow this holding. The relevant provisions at issue in

12   Roundabout Theatre and the provisions at issue in the Policy before us are

13   not materially different. In construing New York law, we are “bound . . . by

14   the law of New York as interpreted by the New York Court of Appeals,” and

15   we “consider the language of [state intermediate appellate] courts to be

16   helpful indicators of how the state’s highest court would rule.” Licci ex rel.

17   Licci v. Lebanese Canadian Bank, SAL, 739 F.3d 45, 48 (2d Cir. 2013)

18   (quotation marks omitted). We are unaware of any contrary authority in

                                             9
 1   New York that diverges from the holding in Roundabout Theatre, which state

 2   and federal courts in New York have (at either the motion to dismiss stage or

 3   on summary judgment) uniformly applied since the start of the COVID-19

 4   pandemic to deny coverage under similar insurance provisions where the

 5   insured property itself was not alleged or shown to have suffered direct

 6   physical loss or physical damage. See, e.g., Benny’s Famous Pizza Plus Inc. v.

 7   Sec. Nat’l Ins. Co., 72 Misc. 3d 1209(A), slip op. at *4 (N.Y. Sup. Ct., Kings

 8   Cnty. July 1, 2021); 6593 Weighlock Drive, LLC v. Springhill SMC Corp., 147

 9   N.Y.S.3d 386, 392–93 (N.Y. Sup. Ct., Onondaga Cnty. 2021); Mangia Rest.

10   Corp. v. Utica First Ins. Co., 148 N.Y.S.3d 606, 611-12 (N.Y. Sup. Ct., Queens

11   Cnty. 2021); Visconti Bus Serv., LLC v. Utica Nat’l Ins. Grp., 142 N.Y.S.3d 903,

12   915 (N.Y. Sup. Ct., Orange Cnty. 2021); see also, e.g., Kim-Chee LLC v. Phila.

13   Indemnity Ins. Co., No. 1:20 Civ. 1136, 2021 WL 1600831 (W.D.N.Y. Apr. 23,

14   2021); Mohawk Gaming Enters., LLC v. Affiliated FM Ins. Co., 534 F. Supp. 3d

15   216 (N.D.N.Y. 2021); Jeffrey M. Dressel, D.D.S., P.C. v. Hartford Ins. Co. of the

16   Midwest, Inc., No. 20 Civ. 2777 (KAM)(VMS), 2021 WL 1091711 (E.D.N.Y.

17   Mar. 22, 2021); Sharde Harvey DDS, PLLC v. Sentinel Ins. Co., No. 20 Civ.

                                             10
 1   3350 (PGG) (RWL), 2021 WL 1034259 (S.D.N.Y. Mar. 18, 2021). 1 As one New

 2   York State trial judge recently explained, courts in jurisdictions outside New

 3   York may have reached a different conclusion, 2 but “all New York courts

 4   applying New York law . . . have soundly rejected the argument that business

 5   closures . . . due to New York State Executive Orders constitute physical loss

 6   or damage to property.” Benny’s Famous Pizza Plus Inc., slip op. at *4.

 7          Urging a contrary conclusion, 10012 Holdings and the amici point to

 8   Pepsico v. Winterthur Int’l Am. Ins. Co., 806 N.Y.S.2d 709 (2d Dep’t 2005),

 9   Port Auth. of N.Y. & N.J. v. Affiliated FM Ins. Co., 311 F.3d 226 (3d Cir. 2002),

10   and TRAVCO Ins. Co. v. Ward, 715 F. Supp. 2d 699 (E.D. Va. 2010), aff’d, 504

     1
      To the extent that 10012 Holdings cites lower court decisions from other states and
     their interpretations under non-New York law, those cases are not binding on New
     York courts and do not prevent us from confidently predicting how the Court of
     Appeals would decide the issue before us.

     2 That is not true, however, for six sister circuits applying Oklahoma, Illinois,
     California, Ohio, Georgia, and Iowa law, and holding that similar business
     interruption provisions require some physical damage to the insured’s property.
     See Goodwill Indus. Cent. Okla., Inc. v. Phila. Indem. Ins. Co., — F.4th —, 2021 WL
     6048858 (10th Cir. Dec. 21, 2021) (Oklahoma); Sandy Point Dental, P.C. v. Cincinnati
     Ins. Co., — F.4th —, 2021 WL 5833525 (7th Cir. Dec. 9, 2021) (Illinois); Mudpie, Inc.
     v. Travelers Cas. Ins. Co. of Am., 15 F.4th 885 (9th Cir. 2021) (California); Santo’s
     Italian Café v. Acuity Ins. Co., 15 F.4th 398 (6th Cir. 2021) (Ohio); Gilreath Fam. &
     Cosm. Dentistry, Inc. v. Cincinnati Ins. Co., No. 21-11046, 2021 WL 3870697 (11th
     Cir. Aug. 31, 2021) (Georgia); Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141
     (8th Cir. 2021) (Iowa).
                                               11
 1   F. App’x 251 (4th Cir. 2013), none of which are to the contrary. In Pepsico, for

 2   example, a soda company was forced to destroy its soft-drink product when

 3   the company “used faulty raw ingredients” provided by third-party vendors,

 4   which rendered the soda “unmerchantable.” Pepsico v. Winterthur Int’l Am.

 5   Ins. Co., 788 N.Y.S.2d 142, 143 (2d Dep’t 2004). One question was whether the

 6   destruction of the soda product fell within the insurance coverage for “all

 7   risks of physical loss of or damage to property,” including “personal

 8   property” such as the soda. Pepsico v. Winterthur Int’l Am. Ins. Co., 6 Misc.

 9   3d 1006(A), slip op. at *1 (N.Y. Sup. Ct., Westchester Cnty. Dec. 10, 2004). The

10   Second Department concluded that the loss of the product was covered

11   because a “physical event” occurred that “seriously impaired” the “function”

12   of the soda and caused the injury or damage. 806 N.Y.S.2d at 711. In other

13   words, the product had sustained physical damage. Similarly, the courts in

14   Affiliated FM Ins. Co. and Ward determined that particulates like asbestos,

15   odors, and noxious fumes, which physically damaged the insured’s premises,

16   could trigger coverage under certain policies. Affiliated FM Ins. Co., 311 F.3d

17   at 236; Ward, 715 F. Supp. 2d at 708. Of course, the requirement of a physical

18   event that causes damage to the premises is completely consistent with

                                            12
 1   Roundabout Theatre, but 10012 Holdings does not here allege a “physical

 2   event” that caused injury or damage to its premises.

 3         Under the circumstances, “we find [no] persuasive evidence that the

 4   highest state court would reach a different conclusion” from Roundabout

 5   Theatre. Entron, Inc. v. Affiliated FM Ins. Co., 749 F.2d 127, 132 (2d Cir. 1984).

 6   We therefore hold, in accord with Roundabout Theatre and every New York

 7   state court to have decided the issue, that under New York law the terms

 8   “direct physical loss” and “physical damage” in the Business Income and

 9   Extra Expense provisions do not extend to mere loss of use of a premises,

10   where there has been no physical damage to such premises; those terms

11   instead require actual physical loss of or damage to the insured’s property.

12   We therefore reject 10012 Holdings’s argument that “physical loss” must

13   mean “loss of physical possession and/or direct physical deprivation” — in

14   other words, loss of use.

15         We note, too, that the term “loss of use” is missing from the Business

16   Income and Extra Expense provisions but included in other provisions of the

17   Policy. A provision entitled “Pollutants and Contaminants,” for example,

18   explicitly distinguishes “physical loss [or] physical damage” on the one hand

                                            13
 1   and “loss of use of property” on the other, Joint App’x 98, treating “physical

 2   loss” and “loss of use of property” as distinct harms.

 3         10012 Holdings points to provisions in another section of the Policy

 4   entitled “Business Liability Coverage Form,” which define “property

 5   damage” to encompass both “[p]hysical injury to tangible property” and

 6   “[l]oss of use of tangible property that is not physically injured.” Joint App’x

 7   123. As Sentinel observes, however, the Business Liability Coverage Form

 8   details coverage for claims that are asserted against the insured by a third

 9   party, while the section of the Policy at issue in this appeal, contained in a

10   Special Property Coverage Form, details coverage for losses the insured itself

11   suffers. These two sections are entirely separate and protect “wholly different

12   interests.” Great N. Ins. Co. v. Mt. Vernon Fire Ins. Co., 92 N.Y.2d 682, 688

13   (1999). Worse still for 10012 Holdings, the term “property damage” is not

14   used at all in the coverage provisions that 10012 Holdings invokes. We have

15   said that distinct terms must be given their own effect, and that the use of a

16   term in one place but not the other is presumed to be intentional. See

17   India.com, Inc. v. Dalal, 412 F.3d 315, 323 (2d Cir. 2005) (applying New York

18   law). Here, the fact that “property damage” is expressly defined to include

                                             14
 1   loss of use in the third-party liability section of the Policy, but not in the first-

 2   party property section of the Policy under which 10012 Holdings claims

 3   coverage, further supports our holding.

 4         Because 10012 Holdings alleges only that it lost access to its property as

 5   a result of COVID-19 and the governmental shutdown orders, and not that it

 6   suspended operations because of physical damage to its property, we agree

 7   with the District Court that 10012 Holdings cannot recover under either the

 8   Business Income or Extra Expense provisions.

 9         II.    The Civil Authority Provision

10         10012 Holdings separately contends that the Policy’s Civil Authority

11   provision required Sentinel to pay for its lost income and extra expenses.

12   This argument is unpersuasive for at least two reasons. First, 10012 Holdings

13   acknowledges that coverage under the Civil Authority provision, which, as

14   previously noted, also requires a “Covered Cause of Loss” damaging

15   property, is contingent on showing that the civil authority orders — here, the

16   executive orders issued by the Governor — resulted from a risk of direct

17   physical loss to property in the vicinity of the gallery. But the executive

18   orders were the result of the COVID-19 pandemic and the harm it posed to

                                              15
 1   human beings, not, as “risk of direct physical loss” entails, risk of physical

 2   damage to property. Shuttering a gallery because of possible human infection

 3   does not qualify as a “risk of direct physical loss.” Second, even assuming

 4   that COVID-19 itself posed a “risk of direct physical loss,” coverage under the

 5   Civil Authority provision contemplates that the executive orders prohibiting

 6   access to the insured’s premises were prompted by risk of harm to

 7   neighboring premises. As the District Court observed, however, “the

 8   Complaint does not plausibly allege that the potential presence of COVID-19

 9   in neighboring properties directly resulted in the closure of Plaintiff’s

10   propert[y]; rather, it alleges that closure was the direct result of the risk of

11   COVID-19 at Plaintiff’s property.” 10012 Holdings, Inc., 507 F. Supp. 3d at

12   488–89.

13         We therefore conclude that 10012 Holdings also cannot recover under

14   the Policy’s Civil Authority provision. We express no opinion as to whether

15   the Policy would cover the different factual situations that amici suggest in

16   this case.

                                              16
 1            III.   Request for Certification to the New York Court of Appeals

 2            Finally, in the alternative, 10012 Holdings asks that we certify this

 3   question of state law to the New York Court of Appeals 3 pursuant to our

 4   authority to certify “determinative questions of New York law [that] are

 5   involved in a cause pending before [us] for which there is no controlling

 6   precedent of the Court of Appeals.” 22 N.Y.C.R.R. § 500.27(a). Certification is

 7   “a valuable device for securing prompt and authoritative resolution of

 8   unsettled questions of state law, especially those that seem likely to recur and

 9   to have significance beyond the interests of the parties in a particular

10   lawsuit.” Kidney v. Kolmar Lab’ys, Inc., 808 F.2d 955, 957 (2d Cir. 1987). If a

11   question of state law is arising primarily in diversity cases, it may be

12   particularly important to certify in order to ensure that state courts are not

     3   The proposed question is:

              Could the business interruption provision of an all risk insurance
              policy, which provides coverage for “direct physical loss of or damage
              to“ covered property, be reasonably interpreted to cover losses of
              business property and income caused by government shutdown
              orders which suspended or severely curtailed business operations for
              purposes of public health and safety in response to the outbreak of the
              COVID-19 pandemic?

     Appellant’s Br. 29.
                                                17
1   “substantially deprived of the opportunity to define state law.” Gutierrez v.

2   Smith, 702 F.3d 103, 116–17 (2d Cir. 2012). Certification in diversity cases

3   “discourages forum shopping and affirm[s] that it is the state’s High Court

4   that is entitled to have the final say on any issue of state law.” Id. at 117

5   (quotation marks omitted). 4 But, of course, certification is not costless:

6   Because “the certification process always incurs the risk of some delay,”

7   Friends of Van Cortlandt Park v. City of New York, 232 F.3d 324, 327 (2d Cir.

8   2000), we must consider the age and urgency of the litigation, the impact that

    4 Sentinel has suggested that the fact that this is a diversity case cuts against
    certification. On occasion, dicta from our court has given credence to this view. See,
    e.g., Valls v. Allstate Ins. Co., 919 F.3d 739, 743 (2d Cir. 2019) (“In diversity cases,
    certification can effectively defeat a litigant’s constitutionally endorsed entitlement
    to have its case adjudicated by a federal court rather than a state court, as
    certification will often effectively empower the state court to determine the
    outcome.“); 53rd St., LLC v. U.S. Bank Nat‘l Ass’n, 8 F.4th 74, 81 (2d Cir. 2021)
    (same). But this view against certification misses the mark. The right to a federal
    forum is not the right to a federal interpretation of state law. Erie R. Co. v.
    Tompkins, 304 U.S. 64 (1938), left no doubt in that regard. Rather, it is the right to a
    neutral forum for the more subjective determinations involved in fact-finding and
    trial administration, where “state prejudices“ conceivably could “obstruct, or
    control[] the regular administration of justice.“ Martin v. Hunter’s Lessee, 14 U.S.
    304, 347 (1816). By “preserving the parties’ right to a federal determination of the
    factual questions in the suit,“ Ira P. Robbins, The Uniform Certification of Questions
    of Law Act: A Proposal for Reform, 18 J. LEGIS. 127, 135 (1992), certification on
    questions of law gives the parties in a diversity case exactly what they are due: a
    state determination of state law and a level playing field as to the facts surrounding
    the dispute.
                                              18
 1   costs and delays associated with certification will have on the litigants, and

 2   the costs that delay imposes on other cases that depend on resolution of the

 3   legal issues.

 4         In this case, the scales tip slightly against certification. Many suits

 5   raising the same interpretive question have been filed in our district courts,

 6   and all these cases would be delayed by certification. While it likely would

 7   take no more than a few months for the New York Court of Appeals to accept

 8   or decline certification, see, e.g., Veloz v. Garland, 37 N.Y.3d 1006 (2021)

 9   (three months to decline certification), even that very reasonable delay

10   becomes significant when so many cases are affected. If there were

11   disagreement in the lower New York courts, certification might still be

12   justified, but as we already noted, every New York court interpreting the

13   phrase “direct physical loss” has read it the same way and denied coverage.

14   See Barenboim v. Starbucks Corp., 698 F.3d 104, 109 (2d Cir. 2012) (explaining

15   that the decision to certify a question to the Court of Appeals hinges in part

16   on “whether the New York Court of Appeals has addressed the issue and, if

17   not, whether the decisions of other New York courts permit us to predict how

18   the Court of Appeals would resolve it”).

                                             19
 1         Finally, many cases raising the same issue are percolating through the

 2   New York state court system, and nine such cases are currently pending

 3   before New York’s intermediate courts of appeals. See University of

 4   Pennsylvania Carey Law School, Appeals, Covid Coverage Litigation Tracker,

 5   https://cclt.law.upenn.edu/appeals/ (last visited Dec. 22, 2021) (showing that

 6   three appeals focused on this question are currently pending before New

 7   York’s First Judicial Department, four are pending before the Second Judicial

 8   Department, and two are pending before the Fourth Judicial Department).

 9   Thus, the Court of Appeals will have every opportunity to address this

10   question and either endorse or correct our interpretation of New York law,

11   should it wish to do so. In the meantime, following what the lower New York

12   courts have uniformly done is justified.

13         We therefore deny 10012 Holdings’s alternative request to certify the

14   proposed question to the New York Court of Appeals.

                                           20
1                                  CONCLUSION

2         We have considered 10012 Holdings’s remaining arguments, including

3   those relating to the Policy’s Covered Property provision, and conclude that

4   they are without merit. For the foregoing reasons, the judgment of the

5   District Court is AFFIRMED.

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