September 21, 2017

Lakers’ Insurance Refuses to Cover Team in TCPA Lawsuit

The Government is Serious About TCPA Violations!

The Los Angeles Lakers were looking for the assist from its insurance company after it allegedly violated the TCPA. But, the Ninth Circuit blocked the shot.

During the October 13, 2012, game, the Lakers organization encouraged those in attendance to text a message to a number they provided on the scoreboard.

Hoping his message would make it onto the board, David Emanuel texted the number. In return, he got a message that read “Thnx! Txt as many times as u like. Not all msgs go on screen. Txt ALERTS for Lakers News alerts. Msg&Data Rates May Apply. Txt STOP to quit. Txt INFO for info.”

Just under a month later, Emanuel and others who also attended the game brought a class action lawsuit against the Lakers. They claimed the response message violated the TCPA because it was sent by an automatic telephone dialing system (ATDS).

In reply to the suit, the Lakers asked Federal Insurance Co. to defend them. The company insured the team under a policy known as the “ForeFront Portfolio.” This part of the policy contained a liability coverage section of directors and officers that would require Federal Insurance Co. to pay for losses suffered by the team “resulting from any insured organization claim… for Wrongful Acts” according to the Ninth Circuit decision.

“Wrongful Acts” in the policy included any error, misstatement, misleading statement, act, omission neglect or breach of duty committed, attempted or allegedly committed or attempted by the Lakers, and contained numerous exclusions from corporate liability coverage.

Exclusions included a claim arising from libel, slander, oral or written publication of defamatory or disparaging material, invasion of privacy, wrongful entry, eviction, false arrest, false imprisonment, malicious prosecution, malicious use or abuse of process, assault, battery or loss of consortium.

Federal Insurance Co. refused to defend the NBA team because it was an invasion of privacy case, which was excluded from coverage. In late August, the Ninth Circuit agreed that the insurance company did not need to provide coverage because of the nature of the suit.