April 15, 2019

The U.S. Court of Appeals for the 11^th Circuit has ruled that in the following case the insurer had no duty to cover a class action lawsuit alleging that its insured had sent hundreds of thousands of ”junk faxes”, even if the insured took this action based on the belief that the recipients had agreed to receive the faxes. In handing down this decision the 11^th Circuit agreed with the federal district court in Georgia. The case is GM Sign, Inc. v. St. Paul Fire & Marine Ins. Co., No. 17-14247 (11^th Cir. April 12, 2019).

MFG.com (MFG) began a fax-based advertising program by purchasing lists of people whom MFG believed to have given permission to MFG to send them marketing materials by fax. MFG's belief that they had consented to receive marketing materials turned out to be mistaken. St. Paul Fire & Marine Insurance Company issued a commercial general liability insurance policy (CGL policy) to MFG. Between September 2005 and November 2008 MFG sent 494,212 fax advertisements to individuals on the list. During the time it sent the faxes, MFG was under the belief that its advertising program complied with all applicable laws.