Darren Teshima spoke to Law360 about a ruling issued by the California Supreme Court that took a big step forward for policyholders when it recently found that ambiguity in a policy issued by an AIG unit could lead Yahoo to have a reasonable expectation of coverage, thus potentially triggering the insurer's duty to defend against four proposed class actions over alleged privacy violations.
Darren told Law360 that Yahoo's case is a strong endorsement of federal courts seeking guidance from state supreme courts when facing uncertainty on state law questions.
"What struck me as significant is the California Supreme Court here correctly interpreted the policy language to be consistent with the policyholder's reasonable expectations of coverage where the federal district court had not," said Darren.
Darren went on to say that the ruling is important for policyholders since the justices acknowledged that Yahoo reasonably expected coverage for alleged TCPA violations when negotiating the terms of the policy. According to court records, a TCPA exclusion was removed from the commercial general liability policy, and the at-issue endorsement was then added.
"In this case, one of the things the court recognized was that the policyholder had the TCPA exclusion carved out of its coverage, which was helpful in terms of understanding the reasonable expectations of the policyholder," Darren said.
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