PASADENA, Calif. (Legal Newsline) - In an Aug. 23 split decision, the U.S. Court of Appeals for the Ninth Circuit upheld a district court order dismissing a case filed by Los Angeles Lakers Inc. against Federal Insurance Co. when the team attempted to obtain insurance coverage in defense of a Telephone Consumer Protection Act lawsuit.

Lewis Wiener, a partner at Eversheds Sutherland (US) LLP in Washington, D.C., said the appeals court ruling likely will not affect the filing of TCPA cases in the future.

Lewis Wiener
Lewis Wiener

“(The ruling) talks more in the terms of insurance coverage and the availability of coverage,” Wiener told Legal Newsline.

Wiener said plaintiffs in TCPA cases “have no idea of who they’re suing or what type of insurance coverage they have.”

In addition, Wiener said TCPA cases are lucrative. Specifically, he said plaintiffs could receive $500 per violation, and a defendant can easily send thousands of texts in a short period of time.

As a result, he said it is important for TCPA defendants to “know your coverage, know what you have.”

In fact, Wiener said a majority of his firm’s clients do not have this type of coverage because of the specific TCPA exclusions.

“There’s no one size fits all” coverage, he said.

The case against Federal Insurance arose after David M. Emanuel and other plaintiffs filed a class action lawsuit against the Lakers in 2012 alleging text messages they received from the team violated the provisions of the TCPA because they were sent from an “automatic telephone dialing system.”

The class action plaintiffs also alleged the Lakers had invaded their privacy.

When the Lakers requested that Federal Insurance defend them in the class action lawsuit, the insurer said the invasion of privacy claims were excluded from coverage under the Lakers’ policy.

The appeals court agreed with the U.S. District Court for the Central District of California’s ruling that “because a TCPA claim is inherently an invasion of privacy claim, Federal correctly concluded that Emanuel’s TCPA claims fell under the policy’s broad exclusionary claims.”

“Federal did not breach the policy, or the implied covenant of good faith and fair dealing, under any cognizable legal theory, when it declined to defend against or cover the Emanuel complaint,” the appeals court said in its decision.

Wiener said the Lakers could very well appeal the coverage lawsuit further, as the appeals court ruling “leaves unresolved the interplay between TCPA claims and privacy claims.”

District Judge Stephen Joseph Murphy III, who was sitting in on the Ninth Circuit case, concurred with the majority opinion, but felt the appeals court “should have decided the case on narrower grounds.”

Meanwhile, Circuit Judge Richard C. Tallman dissented, saying the district court ruling should have been overturned because the Lakers alleged a violation of the TCPA, not invasion of privacy.

Want to get notified whenever we write about any of these organizations ?
Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. Court of Appeals for the Ninth Circuit
95 7th St
San Francisco, CA - 94103

U.S. District Court for the Central District of California
312 N Spring St
Los Angeles, CA - 90012

More News