On May 20, 2021, the Illinois Supreme Court delivered its opinion in W. Bend Mut. Ins. Co. v. Krishna Schaumburg Tan, Inc., 2021 IL 125978 regarding whether the claims contained in a lawsuit alleging the violation of the Biometric Information Privacy Act (“BIPA”) were covered under a business owners’ liability policy.
In the underlying lawsuit, Klaudia Sekura (“Sekura”) filed a class-action suit against Krishna Schaumburg Tan, Inc. (“Krishna”), a tanning salon and franchisee of L.A. Tan for violating BIPA by requiring its customers, including Sekura, to scan their fingerprints without first getting their signed, written release to allow disclosure of their fingerprints to any third party.
Krishna tendered the underlying lawsuit to its insurer, West Bend Mutual Insurance Company (“West Bend”), and requested West Bend to defend it. West Bend issued two business owners’ liability policies (“the West Bend policies”) to its insured, Krishna for two consecutive policy periods between 2014 to 2016. West Bend disclaimed coverage to Krishna arguing that it did not have a duty to defend it in the underlying lawsuit.
West Bend then filed a complaint for declaratory judgment against Krishna and Sekura asserting that it did not owe a duty to defend its insured in the underlying lawsuit. Both West Bend and Krishna filed cross-motions for summary judgment. Sekura also joined Krishna’s motion for summary judgment but sought alternative relief. Id. at ¶1. The trial court entered judgment for Krishna. West Bend then appealed the trial court’s decision, which was affirmed by the appellate court. The Illinois Supreme Court allowed West Bend’s petition for leave to appeal the appellate court’s decision, but the Court ultimately affirmed the appellate court’s decision.
The Illinois Supreme Court determined that West Bend had a duty to defend Krishna. At issue was whether the underlying complaint’s allegations fell within the West Bend policies’ coverage under the “personal injury” provision, which states in relevant part:
- ‘Personal injury’ means injury, other than ‘bodily injury’, arising out of one or more of the following offenses:
* * *
- Oral or written publication of material that violates a person’s right of privacy.
Id. at ¶ 8.
The Court determined that the underlying lawsuit potentially alleged: “personal injury” because Sekura alleged that she suffered “nonbodily injury” (“emotional upset, mental anguish and mental injury”) when Krishna disclosed her biometric information to a third party. Id. at ¶ 36.
The Court found that the sharing of Sekura’s fingerprints to a third party constituted a “publication.” Id. at ¶ 50. The Court noted that the term “publication” was undefined in the West Bend policies. As a result, the Court looked to the “plain, ordinary, and popular meaning, i.e., [the Court] look[ed] to its dictionary definition.” Id. at ¶ 38 (citing Founders Insurance Co. v. Munoz, 237 Ill. 2d 424, 436, 341 Ill.Dec. 485, 930 N.E.2d 999 (2010)). Based on its review of the dictionaries, treatises and the Restatement of Torts, the Court determined that it “means both the communication of information to a single party and the communication of information to the public at large.” Id. at ¶ 43.
The Court also concluded that the sharing of Sekura’s fingerprints to a third party constituted a violation of her “right of privacy.” Id. at ¶ 51. The Court noted that the term “right of privacy” was also undefined in the West Bend policies. Accordingly, the Court looked to the dictionary definition of that term and determined that the “right of privacy” includes “the right of an individual to keep his or her personal identifying information like fingerprints secret.” Id. at ¶ 46.
The Court then determined that the “violation of statutes exclusion” did not apply to bar coverage to Krishna. The exclusion states in relevant part:
This insurance does not apply to:
DISTRIBUTION OF MATERIAL IN VIOLATION OF STATUTES
‘Bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ arising directly or indirectly out of any action or omission that violates or is alleged to violate:
(1) The Telephone Consumer Protection Act (TCPA) [(47 U.S.C. § 227 (2018))], including any amendment of or addition to such law; or
(2) The CAN-SPAM Act of 2003 [(15 U.S.C. § 7701 (Supp. III 2004))], including any amendment of or addition to such law; or
(3) Any statute, ordinance or regulation, other than the TCPA or CAN-SPAM Act of 2003, that prohibits or limits the sending, transmitting, communicating or distribution of material or information.
Id. at ¶ 9
The Court began its analysis with the title of the exclusion, which was titled “‘Violation of Statutes that Govern E-Mails, Fax, Phone Calls or Other Methods of Sending Material or Information.’” Id. at ¶ 58. The Court also noted that the exclusion listed “statutes like the TCPA and the CAN-SPAM Act, which regulate methods of communication like telephone calls, faxes, and e-mails.” Id. at ¶ 59. Based on the title of the exclusion and the fact that BIPA does not regulate the method of communication, the Court held that the violation of statutes exclusion could not be used to bar coverage to the insured. Id. at ¶ 60.
In summary, the Illinois Supreme Court ultimately concluded that West Bend had a duty to defend its insured, Krishna, in the underlying lawsuit. It determined that (1) Sekura suffered a “nonbodily personal injury;” (2) Krishna’s sharing of Sekura’s biometric information (i.e., her fingerprints) to a third party constituted a “publication” as that term is used in the “personal injury” provision; and (3) Krishna’s sharing of Sekura’s biometric information to a third party potentially violated Sekura’s “right of privacy” as that term is used in the “personal injury” provision. Id. at ¶ 61. Moreover, the Court found that the violation of statutes exclusion contained in the West Bend policies did not apply to BIPA allegations.
 This decision is currently not considered a final decision. According to the Illinois Supreme Court, this opinion has not been released for publication, and thus is still subject to revision or withdrawal. Moreover, pursuant to the Illinois Supreme Court Rule 367, “a party has 21 days [(June 10, 2021)] after the filing of an opinion to request a rehearing, which, if allowed, will act to nullify the previously filed opinion.” A Caution on Court Opinions, ILLINOIS COURTS (May 24, 2021), http://www.illinoiscourts.gov/Opinions/caution.asp.
 In this blog, we will refer to Sekura to mean both her and the Class.
For more information about this article, contact Catherine Geisler at firstname.lastname@example.org.