Lewis Brisbois Chicago Team Secures First Reported BIPA Coverage Ruling Favorable to Insurers
Chicago, Ill. (September 27, 2021) - Chicago Partners Jeffrey Goldwater and Kelly M. Ognibene recently secured the first reported coverage ruling favorable to insurers under the Illinois Biometric Privacy Act (BIPA) when the U.S. District Court for the Middle District of North Carolina ruled that Lewis Brisbois' general liability insurer clients had no duty to defend insureds against an underlying BIPA class action.
In this matter, Lewis Brisbois filed a motion on behalf of its insurer clients, contending that the insurance policy's Recording and Distribution of Material in Violation of Law exclusion precluded coverage for the insured with respect to a BIPA class action. Specifically, the subject exclusion precluded coverage for "'personal and advertising injury’ arising directly or indirectly out of any action or omission that violates or is alleged to violate:
(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; (2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law; (3) The Fair Credit Reporting Act (FCRA), and any amendment of or addition to such law, including the Fair and Accurate Credit Transactions Act (FACTA); or (4) Any federal, state or local statute, ordinance or regulation, other than the TCPA, CAN-SPAM Act of 2003 or FCRA and their amendments and additions, that addresses, prohibits, or limits the printing, dissemination, disposal, collecting, recording, sending, transmitting, communicating or distribution of material or information.”
In deciding that this exclusion clearly applied to BIPA, the court utilized the rule of ejusdem generis, i.e., that the exclusion applied to statutes "of the same kind, character and nature" as those specifically referenced in the exclusion. The court found that BIPA was similar to the Telephone Consumer Protection Act (TCPA), Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) Act, and Fair Credit Reporting Act/Fair and Accurate Credit Transactions Act (FCRA/FACTA) in that they all protected privacy interests. Notably, the court distinguished the 2021 Illinois Supreme Court decision in West Bend Mut. Ins. Co. v. Krishna Schaumburg Tan, Inc., which held that a different version of the exclusion did not apply to BIPA.
Mr. Goldwater has been an advocate for insurance carriers in declaratory judgment and bad faith litigation for more than 25 years. In addition to an extraordinary record of success, the hallmark of Mr. Goldwater’s practice has been its breadth, touching on every cutting-edge area of insurance law. He has been in the vanguard of consulting on and litigating coverage issues involving cyber liability, D&O, professional liability, public entities, EPL, advertising injury, construction defects, toxic tort, environmental, commercial property, and auto.
Ms. Ognibene is a member of Lewis Brisbois' Insurance Law and Insurance Coverage Practices. She has nationwide experience counseling clients on both coverage and extra-contractual matters involving most types of policies, including professional liability, directors' and officers' liability, employment practices liability, general liability, and more. She also has experience with novel coverage issues involving claims brought under BIPA and has authored “hot topic” papers on the subject.
Lewis Brisbois was the first law firm in the country to establish an Illinois BIPA practice dedicated solely to assisting clients facing claims under the Act, following the Illinois Supreme Court's landmark decision in Rosenbach v. Six Flags Entertainment Corporation, which drastically reduced the threshold required for an individual to seek redress for alleged violations of BIPA. Learn more about Lewis Brisbois' capabilities in this area here.