Yahoo TCPA case vs. AIG sent back to district court

Yahoo Inc.’s attempt to have an American International Group Inc. unit defend it in Telephone Consumer Protection Act litigation, which was ruled on by the California Supreme Court last month, was sent back to the district court on Tuesday by a federal appeals court.

The case, Yahoo Inc. v. National Union Fire Insurance Co. of Pittsburgh, involves the AIG unit’s refusal to defend Sunnyvale, California-based Yahoo in five putative class actions, including two in California, alleging the company had violated the TCPA by transmitting unsolicited text message advertisements to putative class members.

Yahoo filed suit charging breach of contract in U.S. District Court in San Jose, which granted the insurer’s motion to dismiss the case. Faced with conflicting lower state court rulings, on appeal the 9th U.S. Circuit Court of Appeals in San Francisco asked the California Supreme Court for its opinion on the issue.

In November, in a ruling that was considered to be favorable to Yahoo, the state supreme court ruled that a commercial general liability policy can trigger the insurer’s duty to defend the insured against a TCPA claim.

The 9th Circuit said in Tuesday’s ruling, however, that the state supreme court had “expressed no opinion as to the ultimate question - whether Yahoo! is entitled to a defense because ‘Yahoo’s objectively reasonable expectations … must be determined in future litigation.’”

The appeals court said it is remanding the case back to the district court “Because the preset record may be inadequate for us to determine Yahoo!’s reasonable expectations, and the parties have not briefed the issue.”