The Pennsylvania Supreme Court has decided against using its King's Bench powers to resolve a dispute over whether insurance carriers must provide coverage for business interruptions that companies suffer as a result of the COVID-19-related shutdowns.

On Thursday, the justices issued a per curiam order denying the petition filed in the lawsuit, captioned Tambellini v. Erie Insurance. The case had given the high court the opportunity to invoke its plenary jurisdiction and wade into the question of what insurance coverage may be available as thousands of businesses across the state face lengthy business interruptions as a result of Gov. Tom Wolf's mandated statewide closures imposed to stem the spread of the coronavirus.

In a petition filed to the justices April 29, attorneys for restaurant owner Joseph Tambellini said a ruling from the Supreme Court on the issue could provide guidance to the "hundreds, if not thousands," of lawsuits that are expected to arise. A group of lawyers consisting of Haggerty, Goldberg, Schleifer & Kupersmith attorney James Haggerty; Scott Cooper of Schmidt Kramer; John Goodrich of Goodrich & Associates; and Kohn Swift & Graf attorney Jonathan Shub filed the petition.

Before filing the King's Bench petition Tambellini sued Erie in the Allegheny County Court of Common Pleas, seeking a declaratory judgment that Erie Insurance, which sold him a policy, must cover the damages from the shutdown. Specifically, Tambellini argued that his policy is an "all risk" policy, which provides coverage for all losses unless specifically excluded. Since the policy does not include a virus-related exclusion, the coverage must be available, he contended.

Along with asking the high court to rule on the coverage issue, Tambellini also asked the court to consolidate all insurance claims related to the COVID-19 shutdowns into a single court in Pennsylvania—much like what happens in a federal multidistrict litigation—so the claims could be handled quickly.

"The instant action presents issues of immediate public importance to not only plaintiff, Tambellini, but to all citizens of the commonwealth who are seeking recompense from their insurers for the losses, damages and expenses caused by the COVID-19 pandemic and the related governmental orders," Tambellini said in the petition. "Exercise of jurisdiction by the court is warranted by the immediate needs of citizens of the commonwealth who need resolution of the legal insurance coverage issues facing them in attempting to restart their businesses and their lives in the face of the losses, damages and expenses caused by the COVID-19 pandemic and the related governmental orders."

The Pennsylvania Supreme Court rarely takes up cases in its King's Bench jurisdiction, but the justices have shown some eagerness to get out in front of COVID-related litigation.

One case Tambellini cited in his petition was Friends of Danny DeVito v. Wolf, in which a collection of business owners sought to invalidate Wolf's shutdown order stopping the physical operations of all "non-life-sustaining" business. The companies filed their petition in late March, and the justices used their King's Bench powers to take up the case, ruling in mid-April to allow Wolf's order to stand.

That case was also appealed to the U.S. Supreme Court, which also rejected the case earlier this month.

In its May 7 response to the King's Bench petition, Erie argued the court should decline to fast-track the case because it was not one of immediate public importance.

"While the ongoing COVID-19 crisis itself obviously is of immediate importance to the nation as a public health matter, that fact alone does not establish that Tambellini's contractual dispute with Erie is of such immediacy that the normal litigation process and procedures that govern civil disputes in Pennsylvania should suddenly be disregarded entirely," Erie said in its petition.

Erie said that it was not attempting to minimize the hardships business face during the pandemic, but said the courts should not "panic" and be pressured to make "ad hoc" solutions to the problem.

Despite the Supreme Court's ruling, Cooper said he was hopeful the case can move through the court system quickly. A threshold question, he said, will be whether the loss counts as a "physical loss," which is a term used in most policies. Cooper said the issue could be decided on the pleadings, or through summary judgment, but either way it will end up being litigated all the way up to the Supreme Court.

"We were hoping to streamline it, but we're in it for the long haul. Hopefully the insurance companies won't try to delay things so we can keep it moving to get the threshold issue decided as fast as possible," he said. "It's going to go up. Someone's going to have to decide it."

Richard Dibella of DiBella Geer McAllister Best represents Erie and did not respond to a request for comment.