In Mesa Labs. v. Fed. Ins. Co., No. 20-1983, 2021 U.S. App. LEXIS 11365, at *1 (7th Cir. Apr. 20, 2021), the Court of Appeals for the Seventh Circuit found no insurance coverage for TCPA blast-fax claims. The Court of Appeals framed the question as follows:
The question in this case is straightforward: When an insurance policy provides that the insurer has no duty to defend its insured against any claim “arising out of” the TCPA, does that exclusion extend to common‐law claims arising from the TCPA‐violating conduct? The district court said yes, and we agree. We therefore affirm the district court’s decision granting judgment on the pleadings in favor of the insurer.
The Court of Appeals explained:
The Information Laws Exclusion provides that the policy “does not apply to any damages, loss, cost or expense arising out of any actual or alleged or threatened violation of … the United States of America Telephone Consumer Protection Act (TCPA) of 1991 … or any similar regulatory or statutory law in any other jurisdiction.” Orrington’s complaint asserted claims against Mesa under the TCPA, the ICFA, and common law. And the alleged conduct underlying each claim was the same: Mesa sent unsolicited fax advertisements to Orrington’s office. The parties agree that the exclusion covers Orrington’s statutory claims, but they diverge on its application to the common‐law claims. The answer is now clear under our recent decision in Zurich-the “arising out of” language subjects the common‐law claims to the exclusion, as well. Zurich, 990 F.3d at 1078-79. In Zurich, we considered a similar policy exclusion for property damage “resulting from or arising out of any actual or alleged violation of … the [TCPA].” Id. at 1076. We concluded that “[t]he ‘arising out of’ language excludes the underlying conduct that forms the basis of the violation of an enumerated law, even if liability for that underlying conduct might exist under a legal theory that is not expressly mentioned in the policy exclusion (e.g., common‐law invasion of privacy).” Id. 1079. The same is true here. The common‐law claims of conversion, nuisance, and trespass to chattels arise out of the same underlying conduct as the statutory claims-the sending of unsolicited faxes. As we explained in Zurich, “the ‘arising out of’ phrase presents a ‘but‐for’ inquiry: if the plaintiff would not have been injured but for the conduct that violated an enumerated law, then the exclusion applies to all claims flowing from that underlying conduct regardless of the legal theory used.” Id. (citing G.M. Sign, 18 N.E.3d at 78). None of Orrington’s injuries would have occurred but for Mesa’s sending unsolicited fax advertisements, so the Information Laws Exclusion applies to all of Mesa’s claims.
Mesa Labs. v. Fed. Ins. Co., No. 20-1983, 2021 U.S. App. LEXIS 11365, at *5-7 (7th Cir. Apr. 20, 2021)