TCPAWorld is so full of great stories. Here’s another one.
A group of plaintiff’s lawyers settle a big class action against a seemingly insured party on behalf of a class that received unwanted telephone calls. The class settlement is for over $60MM—meaning that class counsel stands to net around $20MM in fees. Nuts right?
The only issue is getting the insurer to pay up.
The policy at issue has an exclusion for claims “arising out of” invasions of privacy. In order to deny coverage, therefore, the insurer asserted that the TCPA case at issue “arose” out of an invasion of privacy.
When the insurer refused to cover the claim, Plaintiffs’ counsel—on behalf of the class—settled the claim with the insured and agreed not to enforce the big $60MM+ judgment that resulted in exchange for the right to sure the insurer for denial of coverage.
The district court ruled in favor of the insurer, concluding that TCPA cases do “arise out of” invasions of privacy. After all, that’s what the TCPA was designed to do—protect privacy. Class counsel appealed arguing that the provision was, at least, ambiguous and that a reasonable consumer would believe that only common law privacy claims were excluded—not statutory claims like the TCPA.
In Horn v. Liberty Ins. Underwriters, Inc., No. 19-12525, 2021 U.S. App. LEXIS 16279 (11th Cir. June 1, 2021) the Eleventh Circuit disagreed with class counsels’ arguments and held that TCPA cases (at least the one before it) do, indeed, unambiguously “arise out of” invasions of privacy. And the court copiously cited back to the class lawyer’s own complaint and pleadings to prove it.
As a result the policy exclusion was found to apply and the class lawyers are out millions. The class members also, presumably, lost a sizable recovery as well. And the insurance company doesn’t have to pay a penny.
Doesn’t seem like a case that will go any further, but we’ll keep an eye on it for you.