Invasion of Privacy Exclusion Bars Coverage for Consent Judgment in TCPA Claim

A Florida federal district court has ruled that an invasion of privacy exclusion barred coverage for a lawsuit and consent judgment involving alleged violations of the Telephone Consumer Protection Act (TCPA).  See Horn v. Liberty Ins. Underwriters, Inc., No. 9:18-cv-80762 (S.D. Fla. May 30, 2019).

The insured marketed and sold certain insurance products.  In 2017, it was sued in a putative class action for alleged violations of the TCPA and sought coverage under a private company D&O policy.  Its insurer declined coverage.  The insured later entered into a consent judgment for more than $60 million and assigned rights against the insurer.  The class members then filed suit against the insurer to collect on the judgment.

In coverage litigation, the court granted summary judgment in favor of the insurer, holding that an invasion of privacy exclusion barred coverage for the lawsuit.  The invasion of privacy exclusion excluded from coverage any Claim “based upon, arising out of, or attributable to any actual or alleged defamation, invasion of privacy, wrongful entry and eviction, false arrest or imprisonment, malicious prosecution, abuse of process, assault, battery or loss of consortium.” (Emphasis by court).  The court rejected the claimants’ argument that an invasion of privacy is not an element of a TCPA claim and ruled, instead, that the allegations clearly included alleged privacy violations under the TCPA because the class argued that the insured’s texts violated their privacy.  The court also concluded, based on the broad prefatory “arising out of” language that the exclusion would apply if the suit “or its causes of action, expressly or by incorporation, originated from, grew out of, flowed from, or merely had a connection with any actual or alleged invasion of privacy, the Claim is not covered under the Policy.”  (Emphasis in original).  Here, the court found that nexus to be clearly satisfied.