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Second Circuit Upholds District Court's Interpretation of "Broadcasting" in Insurance Policy's Media Exclusion Clause

The U.S. Court of Appeals for the Second Circuit affirmed a district court ruling that a "Media Exclusion" clause's use of the term "broadcasting," in a commercial general liability insurance policy that Dish Network purchased, applied to free, rather subscription-fee, TV services. DISH Network Corp. v. Ace American Insurance Co. (ACE), 20-0268. In 2012, DISH was sued by four TV networks alleging breach of contract and copyright infringement over DISH's "Hopper" digital recording device that allowed DISH customers to bypass advertisements in the networks' programming. After settling the lawsuits, DISH sued ACE to recoup expense incurred in the network litigations. The insurance policy DISH purchased from ACE covered "personal and advertising injury" claims that were the result of "[i]nfringing upon another's copyright, trade dress or slogan in [an] 'advertisement.'" But the policy's Media Exclusion clause stated that insurance coverage was excluded for "'[p]ersonal and advertising injury' committed by an insured whose business is … [a]dvertising, broadcasting, publishing or telecasting." (DISH didn't act on its insurance broker's recommendation to additionally purchase a "Broadcasters Errors & Omissions" policy to cover "liability as a broadcasting professional[]," including for "unintentional errors you made in advertising or programming you produced or broadcasted as a professional broadcaster.") In its duty-to-defend lawsuit against ACE, DISH argued that the term "broadcasting" in the Media Exclusion clause only applied to free programming transmissions to consumers. The U.S. District Court for the Southern District of New York disagreed and granted summary judgment for ACE. In its affirmance, the Second Circuit noted: "DISH argues that the 'plain and ordinary' meaning of 'broadcasting' does not apply here because (1) the Policy describes its business as '[c]ommunication,' and (2) a technical or specialized definition of 'broadcasting' applies." However, the appeals court found: "DISH cites no authority for the proposition that the description of the 'Business of Insured' must be exhaustive or that it must match any other reference within the Policy to the insured's business. Entities may be involved in various businesses, and each of those businesses may be accurately described in different ways. Furthermore, DISH's argument makes no sense because broadcasting is unquestionably communication, regardless of whether a fee is charged." Thus, the appeals court concluded, "We reject DISH's invitation to discard the plain and ordinary meaning of the term 'broadcasting' in favor of its preferred definitions."