Junk Fax Case Analysis

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Technically, the decision has no bearing on any case in Wisconsin, as it is nominally an application of Illinois insurance law. Nevertheless, the decision cannot be ignored by any attorney facing this issue.

The court even wrote, "Readers doubtless will note that, although Illinois law supplies the rule of decision, we have not cited any Illinois case interpreting the scope of ‘privacy’ coverage under an advertising-injury clause. That is because Illinois has not issued any pertinent decision at any level … Nor, for that matter, has the highest court of any state grappled with the subject. Almost all litigation of this kind has proceeded in federal district court. Most of these decisions have come out the same way as our district judge, and for the same reason — and thus have failed to distinguish secrecy from seclusion or to appreciate that the statute’s drafters and the insurance (sic) may use the word ‘privacy’ in different ways."

Thus, it is reasonable to expect that, even if a case were brought to which Wisconsin law applied, any federal court would reach the same decision as in the case at bar. There would be no binding precedent to the contrary, nor even any cases from Wisconsin suggesting a contrary result.

Still, plaintiffs may be able to get around the Seventh Circuit’s decision if they believe that the defendant’s insurance coverage is the only practical means of actually recovering a judgment.

The court never actually sets forth the full language of the policy’s definition of "advertising injury." From the small snippet included, however, it is presumably a standard CGL policy that reads as follows:

"Advertising injury means injury arising out of one or more of the following offenses:

a. oral, written, televised or videotaped publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services;

b. oral, written, televised or videotaped publication of material that violates a person’s right of privacy;

c. Misappropriation of advertising ideas or style of doing business; or

d. Infringement of trademark, copyright, title or slogan."

A reasonable sophisticated business person, represented by counsel, who purchases a CGL policy, would read part b. of the "advertising injury" definition to mean the tort of "invasion of privacy," and to encompass only actions included within the definition of that tort.

The tort of invasion of privacy in Wisconsin is set forth in sec. 895.50(2), and provides four definitions:

Subsection (a) refers to intrusion upon the privacy of another of a nature highly offensive to a reasonable person, in a place that a reasonable person would consider private or in a manner which is actionable for trespass.

Subsection (b) refers to nonconsensual use, for commercial purposes, of another’s name, portrait or picture.

Subsection (c) refers to "publicity given to a matter concerning the private life of another, of a kind highly offensive to a reasonable person, if the defendant has acted either unreasonably or recklessly as to whether there was a legitimate public interest in the matter involved, or with actual knowledge that none existed…."

Finally, subsection (d) refers to conduct prohibited under sec. 942.09 (nonconsensual clandestine photographing or videotaping people while they are undressed, going to the bathroom, etc.).

For our analysis, we may disregard subsection (d), inasmuch as there is no conduct that falls within it, that would not also fall within subsection (a). Section 942.09 is a recent statute (1995), enacted to deal with conduct that was reprehensible, but which did not clearly fall within any then-existing criminal statute, and the purpose of sec. 895.50(d) is best understood as merely clarifying that such conduct is also actionable as a tort, as well as in a criminal prosecution.

Thus, the question, in the context of junk fax and the advertising injury definition, is two-part: whether part b. of the advertising injury definition includes subsecs. (a), (b), and (c), of sec. 895.50; and if the definition does include subsec. (a), whether junk fax fits within it.

The Seventh Circuit’s interpretation would limit "invasion of privacy" in the CGL context to subsecs. (b) and (c), because "publication" is required by the policy:

"Perhaps automated faxes to hundreds of recipients could be deemed a form of publication, but this would be irrelevant to the seclusion interest. … sec. 227(b)(1)(c) condemns a particular means of communicating an advertisement, rather than the contents of that advertisement — while an advertising-injury coverage deals with informational content."

It is a reasonable interpretation; the language used in part b. of the definition of advertising injury identically tracks the language in part a. — describing slander or libel.

Sophisticated parties with counsel could be expected to understand that the definition is using a legal term of art for the tort that closely resembles libel and slander but which goes instead by the name, "invasion of privacy."

	Related Links 7th Circuit Court of Appeals Related Article Sending junk fax not advertising injury

Accordingly, a junk fax victim who needs the defendant’s insurer involved to actually recover his judgment would be wise to allege both a violation of sec. 227(b)(1)(c), and traditional invasion of privacy, pursuant to sec. 895.50(a). While no reasonable person considers his fax machine private, it can be argued that, with the enactment of 47 U.S.C. 227(b)(1)(C), sending junk fax is sufficiently similar to trespass to fall within the definition of invasion of privacy in Wisconsin.

Support for such an argument can be found in sec. 895.50(3), which provides: "The right of privacy recognized in this section shall be interpreted in accordance with the developing common law of privacy, including defenses of absolute and qualified privilege, with due regard for maintaining freedom of communication, privately and through the public media."

In this case, Congress has made a decision that sending junk fax is not included within "freedom of communication," but is an unlawful violation of privacy. Thus, a reasonable insured could conclude that sending junk fax is an invasion of privacy falling within subsec. (a)(giving it a broad interpretation, consistent with subsec. (3)), and therefore, also falling within the definition of advertising injury in any CGL policy issued within this state.

Wisconsin’s codification of the tort of invasion of privacy includes violations of both secrecy and seclusion, so an insured has a good argument that the Seventh Circuit’s analysis is inapplicable to a Wisconsin CGL policy.

– David Ziemer

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David Ziemer can be reached by email.