Insurance company must defend tanning salon against BIPA lawsuit
On May 20, 2021, the Illinois Supreme Court upheld the state’s appeal decision that West Bend Mutual Insurance Company must defend its insured, a tanning salon, against a class action lawsuit alleging a violation of the Biometric Information Privacy Act (BIPA). under two business owners’ liability policies
The plaintiff in the class action purchased a tanning salon subscription. As part of the use of salon services, the complainant was required to provide the salon with her fingerprints to be used in the salon customer registration system. The tanning salon then provided this information to its third-party provider for accommodation. More specifically, the applicant alleged:
Krishna Tan systematically and automatically collected, used, stored and disclosed their [customersâ] biometric identifiers or biometric information without having previously obtained the written permission required by 740 ILCS 14/15 (b) (3). Specifically, Krishna Tan systematically disclosed the biometric identifiers and biometric information of the requester and the group to SunLync, an outsider. . . seller.
West Bend issued two business owners’ liability insurance policies covering the periods December 1, 2014 to December 1, 2015 and December 1, 2015 to December 1, 2016. The policies provided typical coverage for “bodily injury”, âProperty damageâ, ââ bodily injury âandâ advertising injury â. With respect to “bodily injury” coverage of the policies, they provided coverage for “” “The policies defined” bodily injury “as” injuries, other than “bodily injury”, resulting from one or more of the following offenses:. . . e. Oral or written publications of material that violates a person’s right to privacy.
The policies also contain certain exclusions, including an exclusion from coverage for “personal injury” or “advertising injury”. . . (2) resulting from the oral or written publication of documents the first publication of which took place before the start of the insurance period; [and] (3) Arising from the intentional violation of a law or a criminal order committed by or with the consent of the insured.
Finally, the policies included exclusions for violations of The Telephone Consumer Protection Act (TCPA). [(47 U.S.C. Â§ 227 (2018))], including any amendment or addition to this law; (2) The CAN-SPAM law of 2003 [15 U.S.C. Â§ 7701 (Supp. III 2004))], including any amendment or addition to this law; or (3) Any law, ordinance or regulation, other than the TCPA or CAN-SPAM of 2003, which prohibits or restricts the sending, transmission, communication or distribution of material or information.
The insured has filed the class action lawsuit against West Bend seeking defense and indemnification against the claims. West Bend agreed to defend the insured, under a reservation of rights, but said the lawsuit was probably not covered by its policies. West Bend then filed a declaratory judgment action, alleging that the class action did not fall within the coverage of the policies for personal injury or publicity because the lawsuit did not allege “the publication of material that violates the right to privacy of ‘a person “. The policyholder countered, claiming that his alleged sharing of biometric information with the third-party provider was sufficient to constitute a “publication” since the ordinary meaning of publication includes the dissemination of information to only one party.
The lower court, the intermediate court of appeals and ultimately the Illinois Supreme Court ruled in favor of the insured. In rendering its decision, the court relied on the general principles of interpretation of insurance contracts, which require that the terms of a policy be given their ordinary meaning and interpreted in favor of the insured when they are likely. of more than a reasonable sense. The policies did not define the term âpublicationâ. Examining its plain and ordinary meaning, the court determined that publication could mean the release of information to the public. or only one part. Consequently, the court concluded that the class action potentially alleges personal or publicity damage, that there was potentially a publication of personal information, and finally that there were allegations that the insured violated the right to privacy of the applicant.
The court also found that the exclusions did not apply. The laws mentioned in the policy govern certain methods of communication, such as telephone calls and faxes. And, while the policies also included a catch-all provision excluding coverage under laws “other than” the two listed, the court refused to allow broad inclusion in laws other than those of the type included in the policies. . Based on the doctrine of ejusdem generis, that is, of the same general type, the tribunal concluded that the BIPA was not bound by the enumerated laws, which were limited to the regulation of telephone calls and faxes, and that the exclusion clause was not would therefore not be extended to include a law of a type not expressly included policies. West Bend therefore had a duty to defend the insured.
As the use of biometric information and the corresponding technology continues to grow, so does the risk of liability of all who use or possess such information. Policyholders should therefore keep in mind that new and emerging risks, such as those associated with the use of biometric information, often correspond to the general contours of their liability insurance policies. As always, therefore, when faced with any claim or lawsuit, policyholders should read their insurance policies carefully or consult an experienced insurance advisor to ensure that valuable coverages are not overlooked.
Copyright Â© 2021, Hunton Andrews Kurth LLP. All rights reserved.Revue nationale de droit, volume XI, number 153