Lakers lose insurance suit over robo-texts

The Los Angeles Lakers’ insurer won’t have to cover the costs of defending a lawsuit against the NBA team, a federal appeals court has ruled.

The Lakers wanted its insurer, Federal Insurance Co., to pay the costs of the NBA team’s defense against a lawsuit alleging that it sent game attendees unauthorized text messages using an automatic dialing system.

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The underlying suit alleges that the Lakers’ text messages were a violation of the Telephone Consumer Protection Act (TCPA) – and Federal Insurance said that meant it wasn’t responsible for defending the suit. A TCPA complaint was, the insurer said, “inherently an invasion of privacy claim” – a claim the insurer explicitly included in the policy’s exclusionary clause, according to a Bloomberg Law report.

The Lakers sued Federal Insurance, but the original trial court dismissed the suit, ruling that TCPA claims were “implicitly invasion of privacy claims” that were explicitly excluded from the Lakers’ policy. The NBA team appealed the decision.

Now the Ninth Circuit Court of Appeals has affirmed the trial court’s decision. Writing for the three-judge panel, Judge N.R. Smith ruled that “a TCPA claim is an invasion of privacy claim, regardless of the type of relief sought.”

The court did rule that Federal Insurance would have to defend the suit “if the facts alleged or known could support a claim other than a TCPA claim.”


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