Los Angeles Lakers, Inc. v. Federal Insurance Co.
2017 U.S. App. LEXIS 16109
| 9th Cir. | 2017Background
- David Emanuel sent a text to a Lakers’ scoreboard number and received an automated reply; he sued the Lakers under the TCPA alleging unwanted automated text messages and repeatedly characterized the conduct as an invasion of his privacy.
- Emanuel’s First Amended Complaint asserted two TCPA claims (negligent and willful/knowing violations) seeking statutory and injunctive relief, and disclaimed personal-injury recovery.
- The Lakers tendered the defense to their insurer, Federal Insurance Company, which refused coverage relying on a Policy exclusion for claims "based upon, arising from, or in consequence of ... invasion of privacy."
- The Lakers sued Federal for breach of contract and bad faith; the district court dismissed under Rule 12(b)(6), ruling TCPA claims are inherently invasion-of-privacy claims and thus excluded by the Policy.
- The Ninth Circuit (majority) affirmed, holding the TCPA’s text expresses a privacy-protecting purpose and therefore TCPA claims plead an invasion-of-privacy claim that falls within the Policy exclusion; concurrence would reach the same result on narrower pleading-based grounds.
- A dissent argued the TCPA is defined by its statutory elements (call, ATDS, lack of consent), not by purpose, that TCPA claims need not be common-law privacy claims, and that Federal had a duty to defend because Emanuel expressly sought statutory (economic) relief and disavowed privacy tort recovery.
Issues
| Issue | Plaintiff's Argument (Lakers/Emanuel) | Defendant's Argument (Federal) | Held |
|---|---|---|---|
| Whether a TCPA claim is inherently an invasion-of-privacy claim | Emanuel alleged invasion of privacy and plaintiffs contend TCPA protects privacy but plaintiffs framed recovery as statutory/economic | Federal: TCPA’s protections are privacy-based, so TCPA claims fall within the Policy’s invasion-of-privacy exclusion | Held: Yes — Court majority: TCPA’s text explicitly protects privacy; pleading the TCPA elements pleads an invasion-of-privacy claim, so exclusion applies |
| Whether the Policy’s broad exclusion ("based upon, arising from, or in consequence of invasion of privacy") bars coverage for Emanuel’s TCPA claims | Lakers: the complaint sought only economic/statutory relief under TCPA and disavowed personal-injury recovery; exclusion should be read narrowly | Federal: exclusion is broad and "arising from" covers claims with any causal connection to privacy invasion | Held: Exclusion applied; California law gives "arising from" broad scope; TCPA claims at least connected to intrusion-on-seclusion privacy tort |
| Whether Federal had a duty to defend under the Policy against the Emanuel complaint | Lakers: duty to defend is broad; complaint did not genuinely plead a distinct common-law privacy tort and disavowed personal-injury relief, so claim could be covered | Federal: complaint alleges invasion-of-privacy-oriented TCPA claims and known facts don’t support a different covered claim | Held: No duty to defend — facts and allegations did not give potential for a covered claim beyond invasion-of-privacy exclusion |
| Proper method of statutory interpretation for TCPA purpose (text v. legislative purpose) | Dissent/Lakers: interpret TCPA by its statutory elements; purpose not relevant if statute is unambiguous | Majority: start with text; TCPA explicitly states it protects privacy in specific subsections, so purpose is clear and dispositive here | Held: Majority relied on statutory text showing Congress aimed to protect privacy; therefore purpose supports treating TCPA as privacy-based law (dissent disagreed) |
Key Cases Cited
- Palmer v. Truck Ins. Exch., 21 Cal.4th 1109 (Cal. 1999) (California rules for interpreting insurance contracts; give effect to parties’ intent and ordinary meaning)
- BedRoc Ltd. v. United States, 541 U.S. 176 (U.S. 2004) (statutory interpretation begins and ends with text when unambiguous)
- Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036 (9th Cir. 2012) (elements of a TCPA claim: call to cellular number using ATDS without prior express consent)
- Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) (considered TCPA purpose in resolving ambiguity whether "call" includes texts)
- Scottsdale Ins. Co. v. MV Transp., 36 Cal.4th 643 (Cal. 2005) (insurer’s duty to defend is broad; compare complaint allegations to policy to determine potential for indemnity)