CGL Policy Exemption for Statuory Violations Involving Transmitting Information Upheld

Interline Brands, Inc. v. Chartis Specialty Ins. Co., No. 13-10025, from MDFla

Per curiam opinion joined by Judge Tjoflat, Senior Judge Cox, and Senior Judge Alarcon (9th Cir.)

Summary: The plaintiff procured commercial general liability policies from the defendant insurer, which contained an exclusion for any statutory violation that addressed transmitting material or information.  After the plaintiff was sued for violating the Telephone Consumer Protection Act (47 U.S.C. § 227), the defendant denied coverage, and the plaintiff filed a breach of contract action against the defendant, contending that the exclusion was void because of ambiguity and because it violated public policy.  The panel determined, applying Florida law, that the exclusion was not ambiguous, despite its broad language, and that it did not violate public policy, because even with the exclusion, the policy still provided extensive and meaningful coverage.  The panel therefore affirmed the district court’s decision to grant the defendant’s motion for judgment on the pleadings.