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Horvitz & Levy is a solutions-based firm focused on appellate success. We are distinguished by our commitment to responsive service and on-going innovation in the areas of civil appellate litigation, amicus curiae support, and trial strategy consultation.

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The Ninth Circuit affirmed a judgment for Horvitz & Levy LLP client Hartford Fire Insurance Co., declaring that Hartford had no duty to defend Big 5 in underlying class actions arising under the Song-Beverly Credit Card Act (the Act) and ordering Big 5 to reimburse Hartford for sums spent defending it.

Numerous class actions were filed against Big 5 alleging it violated the Act by requesting and recording customers’ ZIP codes during retail credit card transactions. Hartford insured Big 5 under a commercial general liability policy that covered personal injury arising out of “[o]ral, written or electronic publication of material that violates a person’s right of privacy.” The policy excluded coverage for personal injury “arising out of the violation of a person’s right of privacy created by any state or federal act.” The policy also excluded coverage for personal injury “arising directly or indirectly out of any action or omission that violates or is alleged to violate: . . . (3) Any Statute, ordinance or regulation, . . . that prohibits or limits the sending, transmitting, communicating or distribution of material or information.”

Big 5 demanded a defense, contending the Hartford policy’s exclusions did not bar coverage for causes of action alleging negligence, common law invasion of privacy, and violations of a constitutional right to privacy. Hartford agreed to defend Big 5 under a reservation of rights in certain of the class actions, and declined to defend Big 5 in the remaining actions.

Big 5 then filed a federal action against Hartford and co-defendant Zurich for breach of contract and related claims. Hartford filed a counterclaim seeking reimbursement of the amount spent on Big 5’s defense.

The district court granted summary judgment for Hartford and Zurich, ruling that neither company had a duty to defend Big 5 in any of the class actions. Further, the court ordered Big 5 to reimburse Hartford $176,703.18, the amount Hartford spent on Big 5’s defense.

Hartford retained Horvitz & Levy to defend the judgment on Big 5’s appeal to the Ninth Circuit. In an unpublished disposition, the Ninth Circuit affirmed.

The Ninth Circuit agreed with the district court that Hartford’s exclusionary language encompassed violations of the Act as well as any other act or omission that arose directly or indirectly from the alleged violations. All the underlying claims, whether labeled “negligence,” “common law,” or “constitutional,” arose directly or indirectly from Big 5’s alleged practice of requesting and recording ZIP codes in violation of the Act. The Ninth Circuit further held that California does not recognize a common law or constitutional right of privacy in a ZIP code. Such claims of privacy “are not just lacking in merit. Under settled California law, they are not even recognized as cognizable causes of action, a status one step below ‘unmeritorious.’”