Second Circuit Holds Insurers Have Duty to Defend Data Trap Lawsuit

Traub Lieberman Straus & Shrewsberry LLP write:

In its recent decision in Nat’l Fire Ins. Co. v. E. Mishan & Sons, Inc., 2016 U.S. App. LEXIS 10151 (2d Cir. June 1, 2016), the United States Court of Appeals for the Second Circuit, applying New York law, had occasion to consider the application of an exclusion applicable to knowing violation of another’s rights in the context of a lawsuit alleging a personal and advertising injury.

At issue was coverage under several general liability policies issued to Emson for two underlying class action lawsuit.  The suits alleged that Emson participated with others in a scheme to deceptively trap its customers into recurring credit card charges.  Emson was alleged to have facilitated this conduct by transferring private customer data for profit.  The suits alleged violations of various state consumer protection acts, fraud, breach of contract, unjust enrichment and violation of the Telephone Consumer Protection Act.

Read more about the lawsuit on JDSupra.

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