An interesting case was just decided by the District Court in Texas (Southern District) in Evanston Ins. Co. v. Gene By Gene, Ltd., 2016 WL 102294 (filed Jan. 6, 2016). In Gene by Gene, the insured, Gene by Gene, Ltd., owned and operated a website (www.familytreedna.com) which is a genetic genealogy website. Users of this website were offered the opportunity to test their genetic information. Once the users received their DNA test results they could then analyze their genetic information to learn more about their ancestry and connect with other users whose results matched in varying degrees.
Gene by Gene was sued by Michael Cole individually and as a putative class alleging that Gene by Gene improperly published his DNA test results on its website without his consent. Cole alleged that this practice violated Alaska’s Genetic Privacy Act, Alaska Stat. § 18.13.010 (“Genetic Privacy Act”), which prohibited the disclosure of a person’s DNA analysis without written or informed consent.
Gene by Gene tendered the suit to Evanston Insurance Company which denied coverage based on a policy exclusion titled “Electronic Data and Distribution of Material in Violation of Statutes.” This exclusion precluded coverage for any claim based upon or arising out of any violation of the Telephone Consumer Protection Act of 1991 (TCPA), the CAN-SPAM Act of 2002 “and any other statute, law, rule, ordinance, or regulation that prohibits or limits the sending, transmitting, communication or distribution of information or other material.”
The Court held that the exclusion was not applicable. The professional liability policy issued by Evanston provided coverage for personal injury and advertising injury liability. “Advertising injury” was defined as “injury … arising out of oral or written publication of material that libels or slanders a person or organization or a person’s or organization’s products, goods or operations or other defamatory or disparaging material, occurring in the course of the named insured’s advertisement.” “Personal injury” was defined to include “oral or written publication of material that violates a person’s right of privacy.”
The allegations in the underlying complaint asserted a violation of the Alaska Genetic Privacy Act. The claim was based upon the factual allegations that Gene by Gene had made the results of the customers’ DNA analyses publicly available on its own websites. Additionally, Gene by Gene also disclosed the plaintiff’s sensitive information to third-party ancestry company RootsWeb without obtaining plaintiff’s or the class’s informed written consent which was required under the Genetic Privacy Act. It was alleged that by making the results of their DNA analyses publicly available and otherwise disclosing that information to any third-parties, Gene by Gene violated plaintiff’s and the class’s statutorily protected rights to privacy in their genetic information as set forth in the Genetic Privacy Act as well as common law rights to privacy.
The Court held that the exclusion was not applicable. The Genetic Privacy Act did not concern unsolicited communication to consumers, but instead regulated the disclosure of a person’s DNA analysis. The facts upon which the underlying claim was based dealt solely with Gene by Gene’s alleged improper disclosure of DNA test results on its public website and to third-parties. The Court found that the facts alleged in the underlying complaint did not address the type of unsolicited seclusion invasion contemplated by the exclusion. The TCPA generally regulated the use of unsolicited telephone calls and fax transmissions to customers. The CAN-SPAM Act of 2003 generally regulated the use of unsolicited, fraudulent, abusive, and deceptive emails to consumers. The facts alleged in the complaint did not address the type of unsolicited exclusion invasion contemplated by the exclusion or the referenced statutes.
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