Another argument for insurance coverage of BIPA claims disappears.

On August 5, 2024, the Northern District of Illinois issued an opinion in a Biometric Information Privacy Act, 740 ILCS 14 et seq. (“BIPA”), case clarifying a conflict between the United States Court of Appeals for the Seventh Circuit and the Appellate Court of Illinois. Westfield Insurance Company v. Ucal Systems, Inc., 2024 U.S. Dist. LEXIS 138237 (N. Dist. Ill. August 5, 2024). The language at issue is found in most insurance policies and has been analyzed by courts throughout the country to determine whether or not the language excludes insurance coverage for BIPA claims. The language at issue before the Court in Westfield was:

Recording and Distribution of Material or Information In Violation of Law

Personal and advertising injuryarising directly or indirectly out of any action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law;

(2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law;

(3) The Fair Credit Reporting Act (FCRA), and any amendment of or addition to such law, including the Fair and Accurate Credit Transaction Act (FACTA); or

(4) Any federal, state or local statute, ordinance or regulation, other than the TCPA, CAN-SPAM Act of 2003 or FCRA and their amendments and additions, that addresses, prohibits, or limits the printing, dissemination, disposal, collecting, recording, sending, transmitting, communicating or distribution of material or information.

Id. at 4.

In a June 15, 2023 decision, the United States Court of Appeals for the Seventh Circuit found that a plain-text reading of specific language focusing on insurance policy exclusions related to statutes (which contained the exact same language as the exclusion at issue in Westfield)was ambiguous and in conflict with other policy provisions. Citizens Insurance Company of America v. Wynndalco Enterprises, LLC, 70 F.4th 987, 997-98 (7th Cir. 2023). The Seventh Circuit found that the ambiguity should be resolved against the insurer and in favor of the insured, and therefore, held that insurance coverage for BIPA claims did not fall under the policy exclusions. Citizens Insurance, 70 F.4th at 997-99. Six months later, on December 19, 2023, the Appellate Court of Illinois’s decision in National Fire Insurance Company of Hartford v. Visual Pak Company, 2023 IL App (1st) 22160 ¶ 78, relied upon the title of the same exclusion provision language, “Recording and Distribution of Material or Information in Violation of Law,” for its decision that BIPA claims were covered under the exclusion because the title “plainly and obviously includes BIPA lawsuits.”

In Westfield the United States District Court for the Northern District of Illinois found that the violation-of-statutes exclusion catch-all provision before the Court was materially distinguishable from the exclusion at issue in Citizens Insurance. Id. at 30. The Court noted specifically that the title of the exclusion was the same as the exclusion at issue in National Fire, specifically, “Recording and Distribution of Material or Information in Violation of Law.” Id. at 18. The Northern District held that the title “points to a particular category of statutes, i.e., personal privacy, and the statutes expressly identified in the exclusion fall within that very same category,” as the BIPA statute, and therefore, it is appropriate “to construe the more general language of the catch-all provision as encompassing only that same category of statutes” as the BIPA statute. Id. at 32 (internal quotations omitted). The Northern District held that the exclusion as entitled applies to violations of BIPA and, therefore, excludes coverage for suits claiming BIPA violations. Id.

The Northern District also addressed additional language at issue before it, contained elsewhere in the insurance policy, which stated:

“[p]ersonal and [a]dvertising [i]njury arising out of any access to or disclosure of any person’s . . . confidential or personal information, including patents, trade secrets, processing methods, customer lists, financial information, credit card information, health information or any other type of nonpublic information.”

Id. at 34. The Court found this language also excludes coverage for BIPA claims. Id.