A Liberty Mutual Group unit is not obligated to pay for a Telephone Consumer Protection Act case’s settlement because of a privacy exclusion in its coverage, a divided federal appeal’s court ruled, in affirming a lower court decision.

Consumers filed a class-action lawsuit against health insurance broker Boca Raton, Florida-based iCan Benefit Group LLC, alleging violations of the TCPA because of unsolicited text messages it had sent to their cellphones without their consent, according to Tuesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Jacob Horn et al. v. Liberty Insurance Underwriters Inc.

ICan sought coverage for the claims under its coverage with Liberty Mutual unit Liberty Insurance Underwriters, but Liberty denied the request. ICan then settled the litigation, admitting to liability for $60,413,112 in damages, and assigned all its rights against the insurer to the plaintiffs. 

When the plaintiffs tried to enforce the judgment against Liberty, the U.S. District Court in West Palm Beach ruled in the insurer’s favor, holding the insurance policy did not cover the settled class claims because the TCPA claims arose out of an invasion of privacy and were therefore not covered under a privacy policy exclusion.

The majority of a three-judge appeals court panel agreed. The insurance policy broadly excludes civil proceedings arising out of an invasion of privacy, it said.

When “we constitute the policy ‘as a whole’ and ‘give meaning to each of its provisions,’ as we must, the invasion of privacy exclusion unambiguously excludes the class action – which is a civil proceeding arising out of an invasion of privacy from coverage,” the ruling said, in citing an earlier case, and affirming the lower court ruling.

The dissenting opinion says, “Although the class plaintiffs’ complaint in this case at times colloquially characterized iCan’s robotexts as involving ‘invasion of privacy,’ it didn’t contain any counts alleging the common-law tort of invasion of privacy.”

Plaintiff attorney Yelene Shneyderman of Yelena Schneyderman, P.A. in Hollywood, Florida, said in a statement, “My clients are obviously disappointed with the decision. This was a very complicated case. The carrier’s counsel has done an outstanding job in convincing the court to accept the carrier’s view of this case. However, we believe that Judge (Kevin) Newsom’s dissent is more consistent with settled principles of law dealing with policy interpretation. Of course, we respect the court’s decision and we appreciate the effort put forth by both the majority and the dissent to address the issues in the case and to provide a thoughtful analysis of their respective positions.”

The insurer’s attorneys did not respond to a request for comment.

A federal appeals court agreed with a lower court in April that a Chubb Ltd. unit was not obligated to defend a dental lab in a TCPA case involving faxes.