National Union moved to dismiss, asserting that its policy did not cover the Text Message Litigations.

The National Union policy

Endorsement No. 1 to the National Union policy defined:

personal injury

as:

injury, including consequential “bodily injury”, arising out of one more of the following offenses: … (e) oral or written publication, in any manner, of material that violates a person's right of privacy.

Court sided with insurer

The court, applying California law, granted National Union's motion.

In its decision, the court explained that one meaning of the right to privacy was secrecy, which involved the right to prevent disclosure of personal information to third parties. In situations where secrecy privacy was violated, publication played a key role, the court added.

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Here, the court reasoned, Yahoo allegedly made the text messages known to the recipients, but did not make the content of the text messages known to third parties — that is, there was no “publication.” Accordingly, the court found, the text messages did not violate a person's privacy right of secrecy and, therefore, National Union did not owe a duty to defend Yahoo for violations of seclusion privacy.

The court concluded that because Yahoo's claim for coverage possibly could be amended by the allegation of additional facts, or by other reasons, the court should not dismiss this case with prejudice, it granted leave for Yahoo to file an amended complaint.

The case is Yahoo! Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, No. 17-cv-00447 NC (N.D. Cal. June 2, 2017).

Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at [email protected].