The Florida Supreme Court recently held that a commercial general liability (“CGL”) insurance policy that provides coverage for an “advertising injury” covers a violation of the Telephone Consumer Protection Act (“TCPA”). Penzer v. Transp. Ins. Co., No. SC08-2068, 2010 WL 308043 (Fla. Jan. 28, 2010). The definition of “advertising injury” in the CGL policy at issue provided coverage for an “injury arising out of” the “[o]ral or written publication of material that violates a person’s right of privacy.” Id. at *4. The policy at issue had no relevant exclusions. Id. at *5-6.
In the case, the plaintiff filed a class action lawsuit against Nextel South Communication for a violation of the TCPA. Id. at *2. The plaintiff alleged that 24,000 unsolicited blast-fax advertisements were sent to him and others like him in violation of the TCPA. Id. at *2, 9. Seeking indemnity and contribution for any liability Nextel might have in the underlying suit, Nextel filed a third-party complaint against Southeast Wireless. Id. at *3. Southeast Wireless then requested Transportation Insurance Company (“Transportation”), its commercial liability insurer, to defend it in the class action. Id. Transportation refused to defend Southeast Wireless and disclaimed coverage. Id. Ultimately, Southeast Wireless settled with the plaintiff and assigned its right to seek insurance coverage from Transportation to the plaintiff. Id.
The case came to the Florida Supreme Court on a certified question from the U.S. Court of Appeals for the Eleventh Circuit. Id. at *1-2. Essentially, the Eleventh Circuit asked whether the policy provides coverage for a TCPA violation when no private information is revealed in the fax. Id. at *2.
Answering the certified question in the affirmative, Florida Supreme Court Justice Polston, writing for the court, applied the plain meaning approach to the interpretation of the insurance contract. Id. at *14. The court focused on the three essential elements of the coverage provision, “publication,” “material,” and “right of privacy,” and referred to a dictionary to define the first two terms, which were left undefined in the insurance contract. Id. at *8, 9.
The court concluded that sending 24,000 unsolicited fax advertisements constitutes “publication” because the faxes disseminated information to the public. Id. at *9. The court concluded that the faxes were “material” because a faxed advertisement “consists of matter” and “may be synthesized or further elaborated or may serve as the basis for arriving at fresh interpretations or judgments or conclusions.” Id. (internal quotations and ellipses omitted).
Most importantly, the court noted that “the plain meaning of ‘right to privacy’ is the legal claim one may make for privacy, which is to be gleaned from federal or Florida law.” Id. at *10. The court stated that “[i]n this case, the source of the right of privacy is the TCPA.” Id. Citing several federal district and circuit court cases for the proposition, the court stated that the TCPA “provides the privacy right to seclusion.” Id. The court therefore rejected Transportation’s argument to the contrary that the “right to privacy” applies only to the content of the material and should not apply to a TCPA violation where the content of the material disseminated does not violate a person’s right to privacy. Id. at *12.
Concurring separately in the result, Justices Pariente and Canady both found ambiguity in the coverage provision and stated that they would find that coverage existed by applying the rule that coverage ambiguities are resolved in favor of the insured. Justice Pariente stated that the policy is ambiguous as to whether coverage exists when it is the content of the material that violates a person’s right of privacy, or when it is the act of sending the material that violates a person’s right of privacy. Id. at *16. Similarly, Justice Canady found ambiguity in the words “material” and “publication.” Id. at *18.
Although Penzer dealt with a privacy violation arising from a fax communication, the Florida Supreme Court’s approach to CGL coverage is not explicitly limited to faxes. It is important to note that the Florida Supreme Court’s approach to addressing CGL coverage for an injury affecting a “person’s right of privacy” appears to be entirely dependent upon an underlying law providing for a right to privacy. The court’s focus on the TCPA protecting the right to seclusion specifically suggests that the court will look to the specific form of privacy protected by the underlying law, rather than vague notions of privacy. If the underlying law providing the right to privacy does not vindicate a particular form of privacy, it is possible that the Florida Supreme Court would find that no CGL coverage exists.