Rose Acre Farms, Inc. v. Columbia Casualty Co.
662 F.3d 765
7th Cir.2011Background
- Rose Acre Farms, a large egg producer, faces class actions alleging antitrust price fixing under the Sherman Act; insurers refused to defend under the policy.
- Diversity state court suit in Indiana; district court granted summary judgment for insurer (Columbia/National Fire).
- Policy defines personal and advertising injury and includes coverage for use of another's advertising idea in advertising (advertising injury).
- Complaint does not plead Rose Acre’s website or its online advertising as the advertising injury; it focuses on alleged conspiracy and UEP certification.
- Policy excludes coverage for advertising injury arising from criminal acts or actions directed to violate rights; conspiracy to violate federal antitrust law is excluded.
- Court notes ISO-drafted form language and changes from misappropriation to use; coverage limited to use of another's idea without permission; Rose Acre’s alleged advertising is with consent or unrelated to the asserted advertising injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether antitrust allegations fall within advertising injury | Rose Acre argues some advertising ties to the asserted conspiracy | Insurer contends no advertising injury arises from the antitrust claims | No coverage for antitrust advertising injury |
| Whether using another's advertising idea with consent is covered | Argues potential coverage applies to advertised ideas even with consent | Use with consent is not misappropriation; not within advertising injury | Not covered; use with consent is not misappropriation under the policy |
| Whether criminal/conspiracy exclusion bars coverage | N/A or insufficiently argued to overcome coverage | Exclusion for acts directed to violate rights and for criminal acts applies | Conspiracy to violate federal antitrust law excluded from coverage |
Key Cases Cited
- Del Monte Fresh Produce, N.A., Inc. v. Transportation Ins. Co., 500 F.3d 640 (7th Cir. 2007) (criminal/conspiracy exclusion applies to coverage denial)
- Curtis-Universal, Inc. v. Sheboygan Emergency Medical Services, Inc., 43 F.3d 1119 (7th Cir. 1994) (insurer may defend entire suit if claims potentially covered and non-covered arise)
- Trailer Marine Transport Corp. v. Chicago Ins. Co., 791 F.Supp. 809 (N.D. Cal. 1992) ( Eleventh Circuit recognition of coverage issues in similar context)
- Hartford Fire Ins. Co. v. California, 509 U.S. 764 (U.S. 1993) (standard policy wording and advertising injury interpretation discussed)
- State Farm Fire & Casualty Co. v. Steinberg, 393 F.3d 1226 (11th Cir. 2004) (policy language on misappropriation vs. use clarified)
- United States Golf Ass'n v. St. Andrews Systems, Data-Max, Inc., 749 F.2d 1028 (3d Cir. 1984) (trademark considerations and advertising concepts in policy context)