In an unpublished opinion, the Ninth Circuit Court of Appeals held that an insurer had a duty to defend its insured for a putative class action alleging that the insured, Brighton Collectibles, LLC (“Brighton”), collected and sold Plaintiff’s and other customers’ personal information (full name, e-mail address, residence address and telephone number, along with the credit card information necessary to complete the sale) in violation of California’s Song-Beverly Credit Card Act (the “Credit Card Act”), Cal. Civ. Code § 1747.08. (See Brighton Collectibles, LLC v. Certain Underwriters at Lloyds London, No. CV 18-1107-JFW(GJSX), 2018 WL 9782167, at *1 (C.D. Cal. Sept. 27, 2018), rev’d and remanded sub nom. Brighton Collectibles, LLC v. Certain Underwriters at Lloyd’s London, 798 F. App’x 144 (9th Cir. 2020) (unpublished)).
The Court recognized that policies issued by Brighton’s insurer, Certain Underwriters at Lloyd’s London (“Lloyd’s”) “cover” “ ‘[p]ersonal injury’ caused by an offense arising out of [Brighton’s] business,” defined to include the “[o]ral or written publication of material that violates a person’s right of privacy.” It disagreed with the district court’s finding that those allegations are not covered by the personal injury provision. In doing so, the Ninth Circuit affirmed its holding in Los Angeles Lakers, Inc. v. Federal Insurance Co., 869 F.3d 795, at 803, 806 (9th Cir. 2017), that a claim under the Telephone Consumer Protection Act “is inherently an invasion of privacy claim” because Congress stated in that Act that “privacy rights” are the interests “this section is intended to protect,” per 47 U.S.C. § 227(b)(2)(B)(ii)(I), (C).
The Court disagreed with Lloyd’s that its obligation to defend is eliminated by
the policies’ exclusion of coverage for “advertising, publishing, broadcasting
or telecasting done by or for [Brighton].” In doing so, the Court
distinguished the terms “publishing” in the exclusion, as distinct from publication”
in the personal injury provision.
The Court refused to
apply a broad interpretation of “publishing” for the exclusion that would
render “the policies’ express coverage for publications that violate privacy
rights” “practically meaningless.” Further, the Court reasoned that the
exclusion “applies only to broad, public-facing marketing activities,” as
evidenced by the exclusion’s grouping of “publishing” with “advertising …,
broadcasting or telecasting.”
Accordingly, under Brighton Collectibles, an insured’s alleged collection and sale of personal information (i.e., full name, e-mail address, residence address and telephone number, along with the credit card information necessary to complete the sale) is not the kind of “publishing” that is excluded from coverage per an exclusion for “advertising, publishing, broadcasting or telecasting done by or for [the insured].”