Policyholders' Biometric Suit Coverage Buoyed By Ill. Ruling

Law 360

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03/24/2020

 
……The Illinois appeals panel upheld all of Judge Valderrama's holdings. Critically, it agreed with the trial judge that Sekura's allegation that Krishna disclosed her fingerprint data to SunLync fulfilled the policy's "publication" requirement, rejecting West Bend's assertion that the term connotes a broad disclosure of information to the public at large.

Anderson Kill PC shareholder Josh Gold, who represents policyholders, said the appellate panel's holding on the publication issue is highly significant, because insurers have often asserted arguments like West Bend's to try to defeat coverage for BIPA and other privacy-based claims under CGL policies.

"The publication conclusion is consistent with a lot of case law rejecting the argument that a 'publication' only exists with mass appeal, like that of a radio station or newspaper," Gold said. "No broad audience is required. The Illinois decision is in accord with numerous courts, finding that there is a publication of material to any third party who is not the claimant."

But White and Williams LLP partner Joshua Mooney, who represents insurers, told Law360 he was troubled by the panel's finding that the publication requirement was satisfied, saying the appellate panel analyzed the term in "a vacuum without considering the surrounding context"……

Anderson Kill's Gold said the opinion's rejection of the exclusion is "definitely good for policyholders and useful for other courts" because the appellate panel provided a "logical underpinning for determining the exclusion's reach."

"Underlying this analysis is the fact that the exclusion has to be both clear and specific for a court to take away coverage for a claim that would otherwise fall under the insuring clause," he said.

 

……The Illinois appeals panel upheld all of Judge Valderrama's holdings. Critically, it agreed with the trial judge that Sekura's allegation that Krishna disclosed her fingerprint data to SunLync fulfilled the policy's "publication" requirement, rejecting West Bend's assertion that the term connotes a broad disclosure of information to the public at large.

Anderson Kill PC shareholder Josh Gold, who represents policyholders, said the appellate panel's holding on the publication issue is highly significant, because insurers have often asserted arguments like West Bend's to try to defeat coverage for BIPA and other privacy-based claims under CGL policies.

"The publication conclusion is consistent with a lot of case law rejecting the argument that a 'publication' only exists with mass appeal, like that of a radio station or newspaper," Gold said. "No broad audience is required. The Illinois decision is in accord with numerous courts, finding that there is a publication of material to any third party who is not the claimant."

But White and Williams LLP partner Joshua Mooney, who represents insurers, told Law360 he was troubled by the panel's finding that the publication requirement was satisfied, saying the appellate panel analyzed the term in "a vacuum without considering the surrounding context"……

Anderson Kill's Gold said the opinion's rejection of the exclusion is "definitely good for policyholders and useful for other courts" because the appellate panel provided a "logical underpinning for determining the exclusion's reach."

"Underlying this analysis is the fact that the exclusion has to be both clear and specific for a court to take away coverage for a claim that would otherwise fall under the insuring clause," he said.

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