The California Supreme Court has agreed to take up the question of whether a commercial general liability policy that covers “personal injury”—which, in relevant part, is defined as injury that arises out of a violation of an individual’s “right of privacy”—triggers the insurer’s duty to defend the insured against a claim that the insured violated the Telephone Consumer Protection Act (“TCPA”). The U.S. Court of Appeals for the Ninth Circuit certified this question to the California Supreme Court on January 16, 2019.
The question arises from Yahoo!’s appeal of a district court’s decision finding that the coverage provided in Yahoo!’s commercial general liability policy for damages resulting from violations of the right of privacy does not extend to violations of the TCPA—forcing Yahoo! to defend five TCPA class action lawsuits without coverage.
As context, commercial general liability policies often include provisions that insure against damages resulting from violations of the right of privacy. Some insurers have taken the position that these policies cover damages resulting from violations of the right to secrecy only—not the right to seclusion. The Ninth Circuit has characterized these rights as the right to keep personal information confidential (secrecy) and the right to be free from unwanted intrusions (seclusion).
The issue often arises in TCPA litigation. For example, in this case, the Ninth Circuit found that the TCPA protects seclusion rather than secrecy. This distinction can have real-world consequences: if a general liability policy unambiguously does not cover damages resulting from a violation of the right to seclusion, then a court could find that the insurer is not required to defend the policyholder in a TCPA claim.
Because the question depends on state law—specifically, California’s rules governing the interpretation of insurance policies—the Ninth Circuit sought the California Supreme Court’s guidance, which the Court has agreed to provide.
It appears that the California Supreme Court has not yet set a briefing schedule or date for oral argument. The case is Yahoo! v. National Union Fire Insurance Co. of Pittsburgh, Pa., No. S253593 (Cal. filed Jan. 17, 2019).