Goodwill Industries of Central Oklahoma, Inc., dba Goodwill Career Pathways Institute v. Philadelphia Indemnity Insurance Company

There is a centrally compelling reason dealing with principles of federalism that calls for this Court to take action in this case. The question is this: Whether federal courts are violating Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), and principles of federalism in uniformly refusing to seek guidance from a state’s highest court on state law questions relating to COVID-related insurance coverage. Tellingly, state courts have dismissed COVID-19 coverage cases 51.8% of the time while federal courts have dismissed them at the astonishing rate of 92.5%. The odds of surviving a motion to dismiss are 5 times greater in state court than in federal court. This is a statistically significant variation (similar to what is encountered in employment discrimination cases), raising a rebuttable presumption of unequal treatment. This disparity is inexplicable, and a return to Erie compliance is mandated. During the COVID-19 pandemic, state and local governments forced business to close their doors in order to slow the spread of the virus. Many of those business, including Goodwill Industries of Central Oklahoma, Inc. (“Goodwill”), filed claims for business interruption coverage under their commercial lines insurance policies. These policies typically provide coverage for “loss of Business Income” when the insured is required to suspend operations during the “period of restoration” due to “direct physical loss of or damage to” covered property. They often also contain virus exclusions which preclude coverage for loss or damage “caused by or resulting from any virus . . . that induces or is capable of inducing physical distress, illness, or disease.” (i)