(Article from Insurance Law Alert, September 2018)
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The Fourth Circuit ruled that an insurer had no duty to defend a law firm in class action suits alleging violation of federal privacy laws. Hartford Cas. Ins. Co. v. Ted A. Greve & Assocs., 2018 WL 3752235 (4th Cir. Aug. 7, 2018).
Greve, a personal injury law firm, was sued in two class action suits alleging violations of the Driver’s Privacy Protection Act. The complaints alleged that Greve obtained plaintiffs’ names and addresses from accident reports maintained by the State of North Carolina and that the firm used that information to mail legal advertisements. Hartford, Greve’s liability insurer, refused to defend on the basis of two policy provisions. A North Carolina federal district court agreed and entered judgment on the pleadings in Hartford’s favor. The Fourth Circuit affirmed.
Hartford’s policy provided coverage for personal and advertising injury (which includes violations of the right to privacy), but expressly excluded coverage for (1) injury arising out of the violation of a person’s right to privacy created by a state or federal law, unless liability would exist even in the absence of the statute, and (2) injury arising directly or indirectly from a statute, ordinance or regulation that prohibits or limits the sharing of information. The court ruled that both exclusions squarely applied here. The court rejected Greve’s assertion that the underlying plaintiffs could potentially state a claim for invasion of privacy under North Carolina common law, separate and apart from the statutory violation. Although North Carolina recognizes a privacy tort based on an intrusion upon a person’s seclusion/solitude, the facts alleged in the underlying suits did not allege such conduct. The court reasoned that seclusion/solitude privacy claims typically encompass physical invasions, such as wiretapping or trespass. Here, however, the alleged invasion was the taking of information that was available as a matter of public record. Thus, the court concluded that the underlying allegations did not fall within the exception to the exclusion, and Hartford had no duty to defend or indemnify the claims.