The state agency dedicated to enforcing the California Consumer Privacy Act (“CCPA”) revealed its settlement with an automaking company (the “Automaker”). This settlement is of note because it marks the agency’s first enforcement action since its creation.  

In 2023, the agency announced that it will investigate practices of car manufacturers; however, to everyone’s surprise, the investigation was not auto-specific. Instead, the agency’s focus on web-based privacy practices apply to virtually any company that operates an online consumer interaction platform. 

The settlement highlights that CCPA will look at virtually everything: from how quickly a given company would be able to produce its contracts with third party vendors, to how many steps it would take to opt-out of sharing their personal information. The agency focused on the Automaker requiring slightly more data points for opt-outs, than opt-ins, and, according to the agency, this “choice [was] not a symmetrical” one. 

The agency, which was previously committed to drafting its rules, is now demonstrating how even gaps in documentation or technicalities could result in material consequences. Therefore, companies should be incentivized to take remedial steps to comply with the CCPA and ensure that consumers have an easy and user-friendly pathway to exercise their privacy rights under the law. 

A New York court, through a side-by-side comparison of two complaints filed eighteen years apart found the allegations were insufficient to enmesh otherwise distinct claims.

In 1997, several individuals filed a class action lawsuit against a professional sports league (the “League”) and its teams. The lawsuit argued that the League “contracted and agreed to restrict the output of the broadcast of their games on non-exempt channels of distribution,” and “agreed to jointly sell their broadcast rights to purchasers of satellite television programming at supra-competitive pricing.” The individuals further argued that the League and the non-party television provider (the “Provider”) entered into an agency agreement, whereby the Provider was authorized to act as an agent of the League to sell and distribute the at issue viewing package. This action settled several years later.

Now, eighteen years later, the League sought coverage from its D&O program following an antitrust lawsuit against them and now-a-co-defendant, the Provider, which alleged the agreements between the League and the Provider eliminated competition, allowed “supra-competitive monopoly prices,” and required individuals to pay for a package that covered all teams. The primary issue was whether coverage was precluded by a Pending and Prior Litigation clause given the 1997 lawsuit.

The League argued that the Pending and Prior Litigation clause was not applicable because the prior litigation and the current litigation are not a single “Claim” under the policies at issue. However, the carriers argued that this matter was excluded due to the Pending and Prior Litigation clause because:

the Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured: (C) alleging, arising out of, based upon, or attributable to, as of the Continuity Date, any pending or prior (i) litigation; or (ii) administrative or regulatory proceeding or investigation of which an Insured had notice, or alleging any Wrongful Act which is the same or Related Wrongful Act to that alleged in such pending or prior litigation or administrative or regulatory proceeding or investigation.

The court, siding with the League, reasoned that resolution of whether the prior litigation and the current litigation constituted a single “Claim,” required the plain language of the policy and a side-by-side comparison of the complaints. The primary policy defined a “Related Wrongful Act” as “all Wrongful Acts that are logically or causally connected by any fact, circumstance, situation, event, transaction…” While related wrongful acts are defined broadly as all that are logically and casually connected, there must be a relatedness, i.e. sufficient factual nexus. When claims are “temporally separate” there is not a sufficient factual nexus. Additionally, the court highlighted that the two complaints do not involve the same transaction. The prior litigation focused on the alleged conspiracy of the League to sell their broadcast rights thereby limiting individuals ability to view games outside of their area. Whereas the current litigation challenged the agreements between the League and the Provider which granted the Provider exclusive license to sell and set prices of the package. Thus, the Pending and Prior Litigation clause did not preclude coverage. 

A federal court held that an e-mail notification constituted a “claim” under a liability insurance policy at the time when the e-mail was first “received,” and not when the Insured first became aware of its receipt.

The underlying matter arose out of a negligence claim involving a worker who the insured, a healthcare staffing agency (the “Agency”), staffed for a nursing home. The nursing home sought indemnification and notified the Agency’s president in an e-mail about an impending joinder complaint. The president failed to acknowledge the e-mail for several months until after the policy period renewed. The Insured sought coverage under the new policy period.

The Insurer denied coverage on the basis of late notice, arguing that the e-mail constituted a claim first received outside the policy period because it was sent to the Agency before the current policy period incepted. The policy was a “claims-made and reported” policy, meaning coverage was triggered when the Agency first received the claim during the policy period. The central issue was whether the matter was first made in the expired policy period, when the president received the e-mail, or in the newly incepted policy period, when the president became aware of the e-mail.

The court decided that the e-mail notification (and not awareness about it) triggered the definition of a claim pursuant to the policy. The court rejected the Agency’s argument that the e-mail lacked sufficient formality and added that there were no “magic words” required to trigger the claim-made date. So, the court found that the e-mail was “received” when it arrived in the president’s inbox, not when it was read. According to the court, siding with the latter would have opened greater opportunities for willful blindness in bad faith.