Insurers win big time in TCPA Suit: Business entities have no privacy interests; any property damage from a TCPA violation is expected.
Judge Lefkow from the federal district court, Northern District of Illinois, held in Maxum Indemnity Co. v. Eclipse Manufacturing Co., No. 06 C 4946 (June 13, 2011) (Dkt. # 367), that business entities have no right of privacy. Thus any TCPA claims asserted by business entities, as the class members, against a defendant will not implicate the “personal and advertising injury” coverage of the defendant’s CGL policy. When a business entity receives an unwanted advertisement via fax, only its property interests (in the paper, ink and fax machine) are affected. However, the sender of the faxes anticipates that the recipient’s paper and toner will be used. Thus any property damage to the plaintiff class is expected. Accordingly, coverage is also foreclosed under the property damage liability coverage.
The implications of Judge Lefkow’s decision could be far reaching for those insurers whose policies do not contain TCPA exclusions. Fax advertisements are often directed to business entities, rather than individuals. If the plaintiff class members are not clearly identified as business entities, Judge Lefkow’s ruling will likely impact only the duty to indemnify not the duty to defend. Indeed Judge Lefkow allowed discovery to proceed on the issue of how many fax numbers on the leads list belonged to individuals not associated with a business entity so as to assess if any indemnity sums might be owed by the insurers.
