Klaudia Sekura purchased a membership from Krishna Schaumburg Tan, Inc., a tanning salon and franchisee of L.A. Tan that gave her access to L.A. Tan’s tanning salons. Sekura’s membership required her to provide Krishna with her fingerprints. Sekura filed a class action lawsuit against Krishna Schaumburg Tan, Inc., and alleged that Krishna (1) violated the Biometric Information Privacy Act provisions relating to the collection of biometric identifiers and biometric information when it scanned Sekura’s and its other customers’ fingerprints and (2) violated the act’s provisions relating to the disclosure of biometric identifiers and information when it disclosed biometric information containing her fingerprints “to an out-of-state third-party vendor, SunLync.”
Krishna tendered Sekura’s lawsuit to West Bend Mutual Insurance Company, its insurer, and requested a defense. West Bend filed a declaratory judgment action against Krishna and Sekura contending that it did not owe a duty to defend Krishna against Sekura’s lawsuit. When West Bend and Krishna filed cross-motions for summary judgment, Sekura joined Krishna’s motion for summary judgment but sought alternative relief. The court entered a judgment for Krishna. West Bend appealed.
The appellate court affirmed the trial court’s decision. The Supreme Court of Illinois allowed West Bend’s petition for leave to appeal and affirmed entry of summary judgment for Krishna.
West Bend issued two business-owners liability policies to Krishna. The policies covered the period from December 1, 2014, through December 1, 2015, and December 1, 2015, through December 1, 2016.
The appellate court found that the violation of statutes exclusion in the policies is meant to bar coverage for the violation of “statutes that govern certain methods of communication, i.e., emails, faxes, and phone calls.”
The appellate court also found that the exclusion is not meant to apply to “other statutes that limit the sending or sharing of certain information.” The court relied on the exclusion’s title and “the two specific statutes listed in the exclusion” that regulate methods of communication—the Telephone Consumer Protection Act (regulating telephone calls and faxes) and the CAN-SPAM Act (regulating emails). The court found that the violation of statutes exclusion did not bar coverage for Krishna because the act “says nothing about methods of communication.”
To the extent that the “other than” language in West Bend’s policies may be viewed as ambiguous, the court said, it must be construed in favor of finding coverage for the insured.
The appellate court found that the common understandings and dictionary definitions of “publication” clearly include both a limited sharing of information with a single party and the broad sharing of information to multiple recipients.
The appellate court affirmed the decision of the trial court.
The supreme court found that the allegations in Sekura’s complaint fell within or potentially within West Bend’s policies’ coverage, because the underlying complaint alleged that Sekura suffered a nonbodily personal injury or advertising injury (emotional upset, mental anguish, and mental injury); Krishna’s alleged sharing of Sekura’s biometric identifiers and biometric information with SunLync constituted a “publication” within the purview of West Bend’s policies; and Krishna’s alleged sharing of Sekura’s biometric identifiers and biometric information (fingerprints) with SunLync potentially violated Sekura’s right to privacy.
The supreme court affirmed the judgment of the appellate court.
West Bend Mutual Insurance Company v. Krishna Schaumburg Tan, Inc.—Supreme Court of Illinois—May 20, 2021—No. 125978.