The Los Angeles Lakers are still dealing with the fallout from having sent confirmatory text messages to spectators in 2013, after having invited text messages from those spectators for potential display on the scoreboard. The ensuing Telephone Consumer Protection Act (TCPA) class action settled, but the Lakers’ suit against its insurer seeking coverage for defense costs and indemnification remains pending. The outcome of this dispute could have deep implications for any business using text messaging as part of its platform.
Oral argument in the Lakers’ appeal from the district court’s judgment of no coverage was held on February 15, 2017, with the opinion pending. See Recording of oral argument in LA Lakers v. Fed. Ins. Co., No. 15-55777 (9th Cir.).At issue in the case is whether Federal Insurance Company (Federal) had to defend and indemnify the Lakers with respect to the underlying class action (the Class Action) under the Lakers’ Directors and Officers policy (the Policy). The district court ruled that there was no coverage because TCPA claims are by definition claims for invasion of privacy, and such claims fall under the Policy’s exclusion for claims against the Lakers “based on, arising from, or in consequence of . . . invasion of privacy.” Los Angeles Lakers, Inc. v. Fed. Ins. Co., No. CV 15-7743 DMG (SHx), 2015 WL 2088865 (C.D. Cal. Apr. 17, 2015). On appeal, the parties’ central positions are laid out below.
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