Retail businesses continue to face class action lawsuits for various types of marketing campaigns (blast faxes, auto-calls, text messages, etc.). A Papa John’s pizza franchisee with more than 30 stores in Washington and Oregon is the target in one of these class actions as a result of text messages sent by a marketing firm that they had hired. The franchisee sought coverage from their general liability insurer, Oregon Mutual, despite a “Distribution of Material In Violation of Statutes” exclusion. That exclusion eliminates coverage for “any” bodily injury, property damage or personal and advertising injury “arising directly or indirectly out of any action of omission that violates or is alleged to violate” the TCPA or CAN-SPAM Act of 2003. The trial court ruled for the insured, finding that the exclusion did not apply because the insured had not committed the alleged statutory violations. But the Washington Court of Appeals granted an interlocutory appeal and reversed the decision yesterday. (Oregon Mut. Ins. Co. v. Rain City Pizza, LLC (.pdf)).
Writing for Division I, Judge Grosse concluded that Oregon Mutual’s policy unambiguously excludes coverage for the class action claims. Specifically, he rejected the insured’s argument that the exclusion is limited to violations committed by the insured such that there should be coverage for claims premised upon third party violations: “The policy language states ‘any’ act or omission and therefore does not limit the acts to those of a particular actor; rather, it applies to any acts that violate the statutes, which would include those committed by someone other than the insured.” The decision reflects a willingness to apply the word “any” to mean just what it says: any violations at all. Beyond using the word “any”, an insurer does not have to specify that the exclusion extends to third party conduct as well as the conduct of an insured.