COMMERCIAL LIABILITY POLICY OBLIGATED TO RESPOND TO TCPA VIOLATION ALLEGATION

Commercial General Liability	Telephone Consumer Protection Act (TCPA)
Advertising Injury	Invasion of Privacy

Michael Penzer as lead plaintiff (Penzer) sued Nextel South Corporation. The suit alleged that Penzer’s rights of privacy and seclusion were violated when he, received a fax from Nextel. Penzer’s complaint alleged that the unsolicited fax delivery violated the Telephone Consumer Protection Act (TCPA). Penzer entered into an agreement with Nextel affiliate whereby Nextel accepted a consent judgment and then assigned its rights to pursuing recovery from Nextel’s commercial general liability carrier, Transportation Insurance Company, (Transportation)

Penzer filed a declaratory action under a district court to pursue the coverage. Transportation did not dispute that a violation of TCPA had occurred but it did argue that its policy language did not provide coverage. This meant that it had no duty to provide a legal defense or to respond to the damages claimed by Penzer. The district court agreed with Transportation and Penzer appealed to the 11th Circuit Court.

The appellate court requested that Florida Supreme Court provide an answer to the following question:

Does a commercial liability policy which provides coverage for advertising injury, such as the policy described here, provide coverage for damages for violation of a law prohibiting using any telephone facsimile machine to send unsolicited advertisement to a telephone facsimile machine when no private information is revealed in the facsimile?

The Supreme Court reviewed the matter from several aspects, including a study of relevant cases, the liability policy’s section on advertising injury, and the policy’s exclusions. It spent a significant amount of time on Transportation’s assertion on how its advertising injury coverage should be interpreted. In the Supreme Court’s view, Transportation’s argument was unpersuasive because it insisted that coverage would apply to only situations where an unsolicited fax’s content contained private information that violated an individual’s rights. In the Supreme Court’s opinion, Transportation could only support its position by unreasonably parsing the policy language.

The question presented by the 11th Circuit Court was answered in the affirmative with instructions for coverage to be found in favor of Penzer.

Michael Penzer, etc., Appellant, vs. Transportation Insurance Company, Appellee. SUPCTFLA, No. SC08-2068. Filed January 28, 2010.

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