On August 29, 2017, my colleagues Lawrence J. Bracken, Michael Levine, and Geoffrey Fehling published an article in Law360 discussing the Ninth Circuit’s recent decision rejecting coverage for the Los Angeles Lakers’ director’s and officer’s (D&O) insurance claim arising from a fan’s class action lawsuit under the Telephone Consumer Protection Act (TCPA), based on a broadly-worded invasion of privacy exclusion in the Lakers’ D&O insurance policy. A split Ninth Circuit panel held that “[b]ecause a TCPA claim is inherently an invasion of privacy claim, [the insurer] correctly concluded that [the claimant]’s TCPA claims fell under the Policy’s broad exclusionary clause.” The full article is available here.
The Eleventh Circuit recently held in G.M. Sign, Inc. v. St. Paul Fire and Marine Ins. Co., that, by denying coverage for a lawsuit filed against its insured, St. Paul waived the policy’s notice requirements, thus obviating the need for the policyholder to provide notice of a second similar lawsuit arising out of the same acts and asserting the same claims. The policyholder, MFG.com, was sued in a class action filed in November 2008 by GM Sign, Inc., which alleged that MFG.com had sent numerous unsolicited faxes in violation of the Telephone Consumer Protection Act (TCPA), among other things. After St. Paul denied coverage, MFG.com and GM Sign stipulated to the dismissal of the first lawsuit without prejudice in July 2009. The next day, GM Sign filed a new class action complaint against MFG.com alleging the same claims on behalf of the same class of plaintiffs as the first suit. MFG.com did not tender the second suit to St. Paul. As part of the $22.5 million settlement of the second suit, GM Sign took an assignment of MFG.com’s right to payment from St. Paul and filed suit to recover insurance proceeds and for bad faith. St. Paul responded, contending that MFG.com breached the policy’s notice provision by failing to provide notice of the second lawsuit.