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Financial Services Law Insights and Observations

11th Circuit: Insurance firm not required to pay broker’s $60 million TCPA judgment

Courts Eleventh Circuit TCPA Appellate Insurance Class Action


On June 1, the U.S. Court of Appeals for the Eleventh Circuit held that an insurance firm is not required to pay a $60.4 million TCPA judgment arising out of a Florida-based insurance broker’s marketing campaign accused of sending unsolicited text messages and phone calls to consumers. The broker sought coverage against a class action which alleged, among other things, that “by sending the text messages at issue. . . , Defendant caused Plaintiffs and the other members of the Classes actual harm and cognizable legal injury [including] . . . invasions of privacy that result from the sending and receipt of such text messages.” In response, the insurance firm asserted that the policy did not cover invasion of privacy claims such as those brought in the class action against the broker. Subsequently, the broker settled the suit and assigned all of its rights against its insurer to the plaintiffs, who attempted to enforce the judgment against the insurance firm. The 11th Circuit found that the broker’s insurance policy excluded coverage of certain actions that would prompt a lawsuit, including claims of invasion of privacy. The appellate court also concluded that the TCPA class action arose out of an “invasion of privacy” because the class complaint specifically alleged that the broker “intentionally invaded the class members’ privacy and sought recovery for those invasions.”

However, one of the judges dissented from the ruling, opining that the policy the insurance firm wrote to the broker is “ambiguous as to whether it refers to the common-law tort called ‘invasion of privacy,’” noting that “in other words, if it could reasonably be so interpreted—then we must interpret it to refer only to that tort.” The judge also noted that it is “unclear to me why any party to an insurance policy would ever allow coverage to be dictated by the conclusory terms and labels that a plaintiff might later choose to include in her complaint.”

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