Disputes over Insurance Coverage for Alleged TCPA Violations

During the past several years, there has been an increase in the number of lawsuits that allege violations of the Telephone Consumer Protection Act, 47 U.S.C. ' 227 (2006) (“TCPA”), and a corresponding increase in the number of coverage disputes over TCPA liabilities. The TCPA, enacted in 1991, restricts telephone (including cellular phone) solicitations and limits the use of fax machines in contacting individuals or businesses which have not given prior express consent to receive those solicitations. The TCPA provides for statutory penalties ranging from $500 to $1,500 per individual communication, with that higher penalty imposed as treble damages for willful or knowing violations of the Act. 47 U.S.C. ' 227(b)(3)(B, C) (2006).

TCPA suits are attractive to plaintiffs' lawyers because litigants have the option of seeking either their actual damages or statutory damages instead. Plaintiffs' lawyers use putative class actions in an attempt to aggregate the number of violations on which to recover ' and as technology continues to make mass marketing easier and more efficient, the number of violations resulting from a single marketing program can be enormous.

In seeking coverage for TCPA claims, policyholders have typically argued that those claims are covered under their policies as “personal and advertising injury” liabilities. By contrast, insurers have argued that: 1) TCPA claims do not fit within the definition of “advertising injury”; and 2) damages under the TCPA are punitive in nature, and thus uninsurable as a matter of public policy. Some insurers have also invoked policy exclusions to defeat TCPA coverage claims, while policyholders have argued that those exclusions do not apply. Below, we discuss each of these arguments.

Personal and Advertising Injury

The Insurance Services Office (“ISO”) form for comprehensive general liability (“CGL”) policies provides coverage for sums “that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury' to which this insurance applies.” Coverage B. The ISO form then defines “personal and advertising injury” to include:

d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f. The use of another's advertising idea in your 'advertisement'; or g. Infringing upon another's copyright, trade dress or slogan in your 'advertisement.'

Courts are split as to whether TCPA violations constitute “personal and advertising injury” under these (or functionally identical) policy provisions. For example, in Indiana Ins. Co. v. CE Design Ltd. , 6 F. Supp. 3d 858, 862 (N.D. Ill. 2013), Indiana Insurance filed a declaratory judgent action against its policyholder Matrix, seeking an order that it did not have any obligation to defend Matrix in a TCPA class action. On cross-motions for summary judgment, the federal district court ruled that Indiana Insurance had a duty to defend Matrix, because Matrix's TCPA liabilities potentially constituted “advertising liability” under the policy at issue. Id. at 863-69.

In so doing, the court focused on the policy's definition of “advertising injury,” which included “oral or written publication of material that violates a person's right of privacy .” (Emphasis added.) The question was whether the violation of that right to privacy meant only the violation of a right to secrecy (e.g., being able to conceal something), or whether that right also included the right to seclusion (e.g., not receiving unwanted advertisements).

The parties had agreed that Michigan law applied to their dispute, and the court predicted that the Michigan Supreme Court would conclude that TCPA claims constitute advertising injury because the “oral or written publication of material that violates a person's right of privacy policy” includes violations of both the right to secrecy and the right to seclusion. Id. at 866-8.

By contrast, the court in State Farm General Ins. Co. v. JT's Frames, Inc. held that underlying TCPA claims did not constitute “advertising liability.” 181 Cal. App. 4th 429, 433-35 (Cal. Ct. App. 2010). There, JT's Frames sought coverage (on behalf of the policyholder, the Friedman Group) for the settlement of a TCPA class action. JT's Frames argued that the TCPA claims were covered as “advertising injury,” but the trial court rejected that argument and the appellate court affirmed.

The policy at issue defined “advertising injury” to include “'a. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; b. oral or written publication of material that violates a person's right of privacy; c. misappropriation of advertising ideas or style of doing business; or d. infringement of copyright, title or slogan.'” Id. at 434. Like the Indiana Insurance court, the State Farm court focused on part (b) of this definition. But unlike the Indiana Insurance court, the State Farm court held that as a matter of contract construction, “the material at issue must 'violate[] a person's right to privacy,' which would be the case only if the material contained confidential information and violated the victim's right to secrecy.” Id. at 446 (emphasis in original).

The court further reasoned that prong (b) of the “advertising injury” definition must be interpreted in the context of the other prongs of that definition; and that those other prongs all related to injury “by the content of the advertisement, not its mere sending and receipt.” As such, the court concluded that prong (b) “may most reasonably be interpreted as referring to advertising material whose content violates a person's right of privacy.” Id. at 448 (emphasis in original).

Finally, it should be noted that ISO recently introduced policy endorsement CG 24 13 04 13, which deletes “oral or written publication ' of material that violates a person's right of privacy” from the definition of “personal and advertising liability.” It will be very difficult for policyholders to argue that TCPA liabilities are covered “personal and advertising liability” under policies with this endorsement.

TCPA Damages

Insurers have also argued that the TCPA's $500-per-violation statutory penalty is punitive in nature, and thus not insurable in states which prohibit the insurance of punitive damages as a matter of public policy. The Illinois Supreme Court recently rejected that argument in Standard Mut. Ins. Co. v. Lay, 989 N.E.2d 591 (Ill. 2013).

In that case, Ted Lay Real Estate Agency (Lay”) had settled a TCPA class action. Lay's insurer, Standard Mutual, argued that its policy did not cover the TCPA class action because damages under the TCPA were punitive and thus “'not insurable as a matter of Illinois law and public policy.'” The trial court and appellate courts agreed with Standard Mutual. Id. at 593-94.

The Illinois Supreme Court disagreed, and cited the Illinois state court decision Scott v. Association for Childbirth at Home, Int'l, 430 N.E.2d 1012, 1017 (Ill. 1981), to conclude that “[t]he [TCPA] is clearly within the class of remedial statutes which are designed to grant remedies for the protection of rights, introduce regulation conducive to the public good, or cure public evils.” The court also noted that the distinction between the standard TCPA penalty of $500 per violation and the treble penalty of up to $1,500 per violation reflected that the standard penalty was not intended to be punitive in nature. 989 N.E.2d at 599. See also Maxum Indem. Co. & Sec. Ins. Co. of Hartford v. Eclipse Mfg. Co., No. 06 C 4946, 2013 WL 5993389 (N.D. Ill. Nov. 12, 2013) (concluding, based on Lay , that TCPA damages were “remedial” and thus “insurable.”).

It is still very much an open question as to whether TCPA statutory damages are uninsurable because they are punitive. Lay concluded that TCPA damages were not punitive because a non-insurance case from an Illinois state court had concluded the TCPA is a remedial statute. Other courts, however, have come to the opposite conclusion, and have held that TCPA's $500-per-violation statutory damages are punitive. See, e.g., Kaplan v. Democrat & Chronicle, 266 A.D.2d 848, 800 (N.Y. App. Div. 1999) (noting that TCPA's remedies are punitive); Pollack v. Island Arbitration & Mediation, Inc., 869 N.Y.S.2d 740, 742-43 (N.Y. City Ct. 2008). Courts in those same states could logically conclude that those punitive damages are not insurable. Moreover, even Lay would appear to concede liabilities under the TCPA's treble damages provision are punitive in nature and thus not insurable in States which prohibit insurance for such damages.

TCPA Exclusions

Many insurance policies contain exclusions for TCPA claims. For example, exclusion (p) in ISO's current CGL policy form excludes “'Personal and advertising injury' arising directly or indirectly out of any action or omission that violates or is alleged to violate: (1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law,” and any other statue, ordinance or regulation “that prohibits or limits the sending, transmitting, communicating or distribution of material or information.”

This very exclusion was at issue in James River Ins. Co. v. Med. Waste Mgmt., LLC, No. 1:13-cv-23608, 2014 WL 4749551 (S.D. Fla. Sept. 22, 2014). The policyholder in that case, Medical Waste, allegedly sent more than 20,000 unsolicited fax advertisements. Medical Waste's insurer, James River, filed a declaratory judgment action against Medical Waste seeking a judgment that it had no duty to defend or indemnify Medical Waste in the resulting TCPA class action. James River and Medical Waste filed cross-motions for summary judgment.

While James River argued that the exclusion for TCPA claims barred coverage, Medical Waste argued that the exclusion did not apply. Specifically, Medical Waste claimed that the exclusion was ambiguous and that the exclusion did not cover related conversion claims against it. Id. at *5. The court granted James River's motion, and held: “[T]he TCPA Exclusion squarely precludes coverage and the correlated duty to indemnify for the TCPA claims in the Underlying Lawsuit. There is nothing ambiguous about the TCPA Exclusion.” Id. at *6. The court further held that the TCPA exclusion applied to the conversion claim against Medical Waste because “the TCPA claims and the conversion claims were premised on the same underlying conduct, namely the transmission of unsolicited fax advertisements in violation of the TCPA.” Finally, the court rejected arguments by Medical Waste that the TCPA exclusion was void. Id. at *7-9. See also G.M. Sign, Inc. v. State Farm Fire & Cas. Co., 18 N.E.3d 70 (Ill. App. Ct. 2014) (holding there was no coverage for the policyholder's TCPA liabilities due to the ISO TCPA exclusion).

The Southern District of New York held that there was no coverage for TCPA claims under a different policy exclusion in Certain Underwriters at Lloyd's, London v. Convergys Corp. , No. 12 Civ. 08968, 2014 WL 3765550 (S.D.N.Y. Mar. 25, 2014). In that case, Convergys sought coverage from Lloyd's Syndicates 623 and 2623 (“Beazley”) for a TCPA lawsuit that stemmed from Convergys's practice of “robo-calling” cell phones. The policy at issue contained this exclusion:

For, arising out of or arising from any actual or alleged antitrust violation, restraint of trade, unfair competition ' violation of the Sherman Anti-Trust Act, the Clayton Act, the Robinson-Patman Act, as amended, deceptive or unfair trade practices, violation of consumer protection laws (except for consumer privacy protection laws under Insuring Clause I.C.) or false or deceptive or misleading advertising.

Id. at *3. Insuring Clause I.C. provided a claim for “Damages and Claims Expenses for (c) failure by the Insured to comply with that part of a Privacy Policy that specifically ' (iii) provides a person with the ability to assent to or withhold assent for ' the Insured Organization's collection or use his or her Personally Identifiable Non-Public Information.” Id .

The court held that “by its plain terms,” Beazley's exclusion “bars coverage for the Martin action” because that TCPA action “was a claim for a violation of a consumer protection law.” Id. at *4. The court further rejected Convergys' argument that an exception to Beazley's exclusion (“for privacy protection laws under Insuring Clause I.C.”) applied. That exception referred to violations of Convergys' own privacy policies, and those were not at issue in the underlying TCPA lawsuit. Id. at *4-5.

Finally, some policyholders have argued that other exclusions in their policies, which encompassed TCPA claims, were too broad to be enforced. Courts have been skeptical of such arguments. For example, in Interline Brands, Inc. v. Chartis Specialty Ins. Co., the CGL policies at issue excluded:

Personal and advertising injury arising out of or resulting from, caused directly or indirectly, in whole or in part by, any act that violates any statute, ordinance or regulation of any federal, state or local government, including any amendment of or addition to such laws, that includes, addresses or applies to the sending, transmitting or communicating of any material or information, by any means whatsoever.

749 F.3d 962, 964 (11th Cir. 2014) (emphasis added). The Eleventh Circuit rejected Interline's argument that the exclusion was too broad because “[e]ven with the broad Exclusion, the policy still contains extensive coverage.” The court also noted that the policies would have cost more without the exclusion, and that “[w]ithout an exclusion, a company would also have to pay for coverage of risks it can easily anticipate and avoid (e.g. violations of laws related to its business.”). 749 F.3d at 967. See also Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Papa John's Int'l Inc., 29 F. Supp. 3d 961, 969-971 (W.D. Ky. 2014) (holding that a similarly-worded exclusion was not overly broad and unenforceable under Kentucky public policy, and applied to bar coverage for the policyholder's underlying TCPA claims).

Conclusion

As long as organizations send unsolicited advertisements, and as long as plaintiffs' lawyers seek to capitalize on the TCPA's damages provisions, TCPA suits will continue to proliferate. As these cases turn into coverage disputes, the above cases demonstrate that TCPA exclusions will generally be enforced, and that even policies without TCPA exclusions may not provide coverage for TCPA liabilities.

Ellen M. Farrell is a Senior Counsel in the Insurance/Reinsurance group, and Kathryn A. Linsky is an associate in the Privacy & Cybersecurity, Insurance/Reinsurance, and Litigation groups at Crowell & Moring LLP.

During the past several years, there has been an increase in the number of lawsuits that allege violations of the Telephone Consumer Protection Act, 47 U.S.C. ' 227 (2006) (“TCPA”), and a corresponding increase in the number of coverage disputes over TCPA liabilities. The TCPA, enacted in 1991, restricts telephone (including cellular phone) solicitations and limits the use of fax machines in contacting individuals or businesses which have not given prior express consent to receive those solicitations. The TCPA provides for statutory penalties ranging from $500 to $1,500 per individual communication, with that higher penalty imposed as treble damages for willful or knowing violations of the Act. 47 U.S.C. ' 227(b)(3)(B, C) (2006).

TCPA suits are attractive to plaintiffs' lawyers because litigants have the option of seeking either their actual damages or statutory damages instead. Plaintiffs' lawyers use putative class actions in an attempt to aggregate the number of violations on which to recover ' and as technology continues to make mass marketing easier and more efficient, the number of violations resulting from a single marketing program can be enormous.

In seeking coverage for TCPA claims, policyholders have typically argued that those claims are covered under their policies as “personal and advertising injury” liabilities. By contrast, insurers have argued that: 1) TCPA claims do not fit within the definition of “advertising injury”; and 2) damages under the TCPA are punitive in nature, and thus uninsurable as a matter of public policy. Some insurers have also invoked policy exclusions to defeat TCPA coverage claims, while policyholders have argued that those exclusions do not apply. Below, we discuss each of these arguments.

Personal and Advertising Injury

The Insurance Services Office (“ISO”) form for comprehensive general liability (“CGL”) policies provides coverage for sums “that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury' to which this insurance applies.” Coverage B. The ISO form then defines “personal and advertising injury” to include:

d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f. The use of another's advertising idea in your 'advertisement'; or g. Infringing upon another's copyright, trade dress or slogan in your 'advertisement.'

Courts are split as to whether TCPA violations constitute “personal and advertising injury” under these (or functionally identical) policy provisions. For example, in Indiana Ins. Co. v. CE Design Ltd. , 6 F. Supp. 3d 858, 862 (N.D. Ill. 2013), Indiana Insurance filed a declaratory judgent action against its policyholder Matrix, seeking an order that it did not have any obligation to defend Matrix in a TCPA class action. On cross-motions for summary judgment, the federal district court ruled that Indiana Insurance had a duty to defend Matrix, because Matrix's TCPA liabilities potentially constituted “advertising liability” under the policy at issue. Id. at 863-69.

In so doing, the court focused on the policy's definition of “advertising injury,” which included “oral or written publication of material that violates a person's right of privacy .” (Emphasis added.) The question was whether the violation of that right to privacy meant only the violation of a right to secrecy (e.g., being able to conceal something), or whether that right also included the right to seclusion (e.g., not receiving unwanted advertisements).

The parties had agreed that Michigan law applied to their dispute, and the court predicted that the Michigan Supreme Court would conclude that TCPA claims constitute advertising injury because the “oral or written publication of material that violates a person's right of privacy policy” includes violations of both the right to secrecy and the right to seclusion. Id. at 866-8.

By contrast, the court in State Farm General Ins. Co. v. JT's Frames, Inc. held that underlying TCPA claims did not constitute “advertising liability.” 181 Cal. App. 4th 429, 433-35 (Cal. Ct. App. 2010). There, JT's Frames sought coverage (on behalf of the policyholder, the Friedman Group) for the settlement of a TCPA class action. JT's Frames argued that the TCPA claims were covered as “advertising injury,” but the trial court rejected that argument and the appellate court affirmed.

The policy at issue defined “advertising injury” to include “'a. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; b. oral or written publication of material that violates a person's right of privacy; c. misappropriation of advertising ideas or style of doing business; or d. infringement of copyright, title or slogan.'” Id. at 434. Like the Indiana Insurance court, the State Farm court focused on part (b) of this definition. But unlike the Indiana Insurance court, the State Farm court held that as a matter of contract construction, “the material at issue must 'violate[] a person's right to privacy,' which would be the case only if the material contained confidential information and violated the victim's right to secrecy.” Id. at 446 (emphasis in original).

The court further reasoned that prong (b) of the “advertising injury” definition must be interpreted in the context of the other prongs of that definition; and that those other prongs all related to injury “by the content of the advertisement, not its mere sending and receipt.” As such, the court concluded that prong (b) “may most reasonably be interpreted as referring to advertising material whose content violates a person's right of privacy.” Id. at 448 (emphasis in original).

Finally, it should be noted that ISO recently introduced policy endorsement CG 24 13 04 13, which deletes “oral or written publication ' of material that violates a person's right of privacy” from the definition of “personal and advertising liability.” It will be very difficult for policyholders to argue that TCPA liabilities are covered “personal and advertising liability” under policies with this endorsement.

TCPA Damages

Insurers have also argued that the TCPA's $500-per-violation statutory penalty is punitive in nature, and thus not insurable in states which prohibit the insurance of punitive damages as a matter of public policy. The Illinois Supreme Court recently rejected that argument in Standard Mut. Ins. Co. v. Lay , 989 N.E.2d 591 (Ill. 2013).

In that case, Ted Lay Real Estate Agency (Lay”) had settled a TCPA class action. Lay's insurer, Standard Mutual, argued that its policy did not cover the TCPA class action because damages under the TCPA were punitive and thus “'not insurable as a matter of Illinois law and public policy.'” The trial court and appellate courts agreed with Standard Mutual. Id. at 593-94.

The Illinois Supreme Court disagreed, and cited the Illinois state court decision Scott v. Association for Childbirth at Home, Int'l , 430 N.E.2d 1012, 1017 (Ill. 1981), to conclude that “[t]he [TCPA] is clearly within the class of remedial statutes which are designed to grant remedies for the protection of rights, introduce regulation conducive to the public good, or cure public evils.” The court also noted that the distinction between the standard TCPA penalty of $500 per violation and the treble penalty of up to $1,500 per violation reflected that the standard penalty was not intended to be punitive in nature. 989 N.E.2d at 599. See also Maxum Indem. Co. & Sec. Ins. Co. of Hartford v. Eclipse Mfg. Co. , No. 06 C 4946, 2013 WL 5993389 (N.D. Ill. Nov. 12, 2013) (concluding, based on Lay , that TCPA damages were “remedial” and thus “insurable.”).

It is still very much an open question as to whether TCPA statutory damages are uninsurable because they are punitive. Lay concluded that TCPA damages were not punitive because a non-insurance case from an Illinois state court had concluded the TCPA is a remedial statute. Other courts, however, have come to the opposite conclusion, and have held that TCPA's $500-per-violation statutory damages are punitive. See, e.g., Kaplan v. Democrat & Chronicle , 266 A.D.2d 848, 800 (N.Y. App. Div. 1999) (noting that TCPA's remedies are punitive); Pollack v. Island Arbitration & Mediation, Inc. , 869 N.Y.S.2d 740, 742-43 (N.Y. City Ct. 2008). Courts in those same states could logically conclude that those punitive damages are not insurable. Moreover, even Lay would appear to concede liabilities under the TCPA's treble damages provision are punitive in nature and thus not insurable in States which prohibit insurance for such damages.

TCPA Exclusions

Many insurance policies contain exclusions for TCPA claims. For example, exclusion (p) in ISO's current CGL policy form excludes “'Personal and advertising injury' arising directly or indirectly out of any action or omission that violates or is alleged to violate: (1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law,” and any other statue, ordinance or regulation “that prohibits or limits the sending, transmitting, communicating or distribution of material or information.”

This very exclusion was at issue in James River Ins. Co. v. Med. Waste Mgmt., LLC, No. 1:13-cv-23608, 2014 WL 4749551 (S.D. Fla. Sept. 22, 2014). The policyholder in that case, Medical Waste, allegedly sent more than 20,000 unsolicited fax advertisements. Medical Waste's insurer, James River, filed a declaratory judgment action against Medical Waste seeking a judgment that it had no duty to defend or indemnify Medical Waste in the resulting TCPA class action. James River and Medical Waste filed cross-motions for summary judgment.

While James River argued that the exclusion for TCPA claims barred coverage, Medical Waste argued that the exclusion did not apply. Specifically, Medical Waste claimed that the exclusion was ambiguous and that the exclusion did not cover related conversion claims against it. Id. at *5. The court granted James River's motion, and held: “[T]he TCPA Exclusion squarely precludes coverage and the correlated duty to indemnify for the TCPA claims in the Underlying Lawsuit. There is nothing ambiguous about the TCPA Exclusion.” Id. at *6. The court further held that the TCPA exclusion applied to the conversion claim against Medical Waste because “the TCPA claims and the conversion claims were premised on the same underlying conduct, namely the transmission of unsolicited fax advertisements in violation of the TCPA.” Finally, the court rejected arguments by Medical Waste that the TCPA exclusion was void. Id. at *7-9. See also G.M. Sign, Inc. v. State Farm Fire & Cas. Co ., 18 N.E.3d 70 (Ill. App. Ct. 2014) (holding there was no coverage for the policyholder's TCPA liabilities due to the ISO TCPA exclusion).

The Southern District of New York held that there was no coverage for TCPA claims under a different policy exclusion in Certain Underwriters at Lloyd's, London v. Convergys Corp. , No. 12 Civ. 08968, 2014 WL 3765550 (S.D.N.Y. Mar. 25, 2014). In that case, Convergys sought coverage from Lloyd's Syndicates 623 and 2623 (“Beazley”) for a TCPA lawsuit that stemmed from Convergys's practice of “robo-calling” cell phones. The policy at issue contained this exclusion:

For, arising out of or arising from any actual or alleged antitrust violation, restraint of trade, unfair competition ' violation of the Sherman Anti-Trust Act, the Clayton Act, the Robinson-Patman Act, as amended, deceptive or unfair trade practices, violation of consumer protection laws (except for consumer privacy protection laws under Insuring Clause I.C.) or false or deceptive or misleading advertising.

Id. at *3. Insuring Clause I.C. provided a claim for “Damages and Claims Expenses for (c) failure by the Insured to comply with that part of a Privacy Policy that specifically ' (iii) provides a person with the ability to assent to or withhold assent for ' the Insured Organization's collection or use his or her Personally Identifiable Non-Public Information.” Id .

The court held that “by its plain terms,” Beazley's exclusion “bars coverage for the Martin action” because that TCPA action “was a claim for a violation of a consumer protection law.” Id. at *4. The court further rejected Convergys' argument that an exception to Beazley's exclusion (“for privacy protection laws under Insuring Clause I.C.”) applied. That exception referred to violations of Convergys' own privacy policies, and those were not at issue in the underlying TCPA lawsuit. Id. at *4-5.

Finally, some policyholders have argued that other exclusions in their policies, which encompassed TCPA claims, were too broad to be enforced. Courts have been skeptical of such arguments. For example, in Interline Brands, Inc. v. Chartis Specialty Ins. Co., the CGL policies at issue excluded:

Personal and advertising injury arising out of or resulting from, caused directly or indirectly, in whole or in part by, any act that violates any statute, ordinance or regulation of any federal, state or local government, including any amendment of or addition to such laws, that includes, addresses or applies to the sending, transmitting or communicating of any material or information, by any means whatsoever.

749 F.3d 962, 964 (11th Cir. 2014) (emphasis added). The Eleventh Circuit rejected Interline's argument that the exclusion was too broad because “[e]ven with the broad Exclusion, the policy still contains extensive coverage.” The court also noted that the policies would have cost more without the exclusion, and that “[w]ithout an exclusion, a company would also have to pay for coverage of risks it can easily anticipate and avoid (e.g. violations of laws related to its business.”). 749 F.3d at 967. See also Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Papa John's Int'l Inc ., 29 F. Supp. 3d 961, 969-971 (W.D. Ky. 2014) (holding that a similarly-worded exclusion was not overly broad and unenforceable under Kentucky public policy, and applied to bar coverage for the policyholder's underlying TCPA claims).

Conclusion

As long as organizations send unsolicited advertisements, and as long as plaintiffs' lawyers seek to capitalize on the TCPA's damages provisions, TCPA suits will continue to proliferate. As these cases turn into coverage disputes, the above cases demonstrate that TCPA exclusions will generally be enforced, and that even policies without TCPA exclusions may not provide coverage for TCPA liabilities.

Ellen M. Farrell is a Senior Counsel in the Insurance/Reinsurance group, and Kathryn A. Linsky is an associate in the Privacy & Cybersecurity, Insurance/Reinsurance, and Litigation groups at Crowell & Moring LLP.