This post is a joint submission with BakerHostetler’s Data Privacy Monitor blog.
The Illinois Supreme Court held on May 23, 2013, that claims based on alleged violation of the Telephone Consumer Protection Action (TCPA) are covered under traditional general liability policies. Standard Mut. Ins. Co. v. Lay, 2013 IL 114617 (Ill. 2013). In so ruling, the Court overruled the decision of a lower appellate court, which had affirmed the trial court’s holding that the claims were not covered. The Court also broke with the determinations of courts from several other jurisdictions, which previously found that TCPA claims are not covered.
In Lay, Locklear Electric, Inc. (Locklear) filed a class action complaint against Ted Lay Real Estate Agency (Lay), after Lay’s agent sent a “blast fax” advertisement to approximately 5,000 people and entities. The plaintiffs sought the TCPA-prescribed damages of $500 per violation, as well as injunctive relief. Lay consented to a court-approved settlement of over $1.7 million, and Locklear agreed to seek satisfaction of the judgment exclusively from Lay’s insurance proceeds.
Lay’s insurer, Standard Mutual Insurance Company (Standard), then commenced a declaratory judgment action to determine its liabilities under its commercial general liability and businessowners liability policies. Among the issues to be decided was whether the...
