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TCPA Insurance Coverage: A Glimmer of Hope?

In 2017, National Union Fire Insurance Co. of Pittsburg, Pa. successfully obtained dismiss of an insurance denial suit by Yahoo! brought in the U.S. District Court for the Northern District of California. In the suit (Case No. 5:17-cv-00447), Yahoo! alleged that National Union had wrongfully refused to defend five underlying Telephone Consumer Protection Act (TCPA) suits against Yahoo!. The policy at issue had a provision regarding publication of material violating privacy rights that Yahoo! sought to travel under given the underlying suits related to unsolicited text messages to its customers (primarily email users). The trial court, though, sided with National Union saying that no complaint alleged publication or disclosure of customer information.

Yahoo! appealed, and in January of this year a  panel of the Ninth Circuit Court of Appeals asked the California Supreme Court to determine if California law would find that coverage exists after determining for itself that the answer was unclear. In so doing, the Ninth Circuit additionally noted that the issue was worthy of further burdening the high Court’s docket because of the scant case law on point in California, as well as the fact that many CGL policies contain the same language as Yahoo! and National Union’s. When coupled with the prevalence of TCPA suits (individual or class), the need for clarity on the issue is poignant.

On March 27, 2019, the California Supreme Court agreed to take the issue. Obviously, no guarantees exist on how the court will rule (see above regarding scant relevant case law). However, this suit has all the makings of a bellwether case. To be sure, the ruling would only bind California courts and courts having to apply California law. But any prospect of coverage for TCPA suits is worth tracking.