ANTITRUST/UNFAIR COMPETITION - INSURANCE COVERAGE ADVICE AND LITIGATION
Gauntlett Law has actively litigated and resolved a number of antitrust coverage lawsuits. We are currently representing companies addressing a variety of trade regulation disputes ranging from claims of common law unfair competition, to Sherman Act violations, to predatory pricing claims throughout the United States.
Gauntlett Law's distinct insurance coverage background provides a different perspective in evaluating where additional facts beyond those referenced in the complaint must be unearthed in order to establish potential coverage. Indeed, many antitrust laws depend on a series of predicate acts that evidence injury to competition, which can be shown by individual instances of injury to competitors. These latter fact allegations in and of themselves trigger distinct bases for coverage under the underlying policies.
The nature of the fact allegations in antitrust/unfair competition lawsuits tends to be more amorphous and require diligent evaluation and explication in order to emphasize the elements therein which might trigger coverage under standard form business policies. As with all forms of antitrust litigation, the factual allegations that develop as the litigation ensues have frequently provided opportunities to demonstrate that potentially covered offenses are at issue. Based on these scenarios and our choice of the most favorable forum, Gauntlett & Associates has been successful in securing insurance coverage for our clients where it was once thought that coverage was excluded.
New forms of coverage, especially those generated by carriers addressing insurance risk for cyberspace and internet exposure, may also expressly cover a range of torts typically implicated in antitrust lawsuits. They also on occasion expressly exclude antitrust conduct; however, these same policies may except from that exclusion unfair competition claims or not bring within the ambit of the antitrust exclusion the broad range of torts factually implicated in antitrust suits.
JACO Environmental, Inc. v. American Int'l Spec. Lines Ins. Co., No. C09-0145JLR, 2010 WL 807441 (W.D. Wash. March 9, 2010) (The court found no issue of law to preclude a judicial finding in favor of the insured in its suit for attorneys' fees following adjudication of a duty to defend. As a breaching insurer, it was of no moment whether JACO was entitled to independent counsel under a policy issued by another insured, Truck Insurance Exchange ("Truck"), since this was irrelevant to JACO'S rights under the AISLIC policy. Id. at *3. The court also found that fees under Washington State Law incurred by coverage counsel pursuant to Olympic Steamship Co. were recoverable by Gauntlett & Associates as coverage counsel. The court requested briefing on several items to clarify points so that a final judgment could be entered. In order to fashion the mechanism by which appellate fees also owed by AISLIC were to be reimbursed was also left to further resolution.)
JACO Environmental, Inc. v. AISLIC, No. C09-0145 JLR, 2010 WL 415067, at *4 (W.D. Wash. Jan. 26, 2010) (AISLIC, having denied a defense, cannot claim that counsel appointed by Truck who associated in as defense counsel discharged its duty to defend as such counsel did not displace independent counsel selected by Jaco to defend it and such fees remain unreimbursed requiring AISLIC to pay the sums remaining.).
Infor Global Solutions (Michigan), Inc. v. St. Paul Fire & Marine Ins. Co., U.S.D.C. (N.D. Cal., San Jose Div.), Case No. 08-02621 JW.
Total Call Int'l, Inc. v. Peerless Ins. Co.,104 Cal. Rptr. 3d 319, 327 (Cal. Ct. App. (2d Dist.) 2010) (did not represent a material change in governing law.) (The court's prior finding was thus unaffected when it concluded implicit disparagement based on allegations that E.piphany (Infor's predecessor) "falsely stated that it was the ‘only' producer of ‘all Java' and ‘fully J2EE' software solutions, which was an ‘important differentiator' between competing products, even though some competitors offered products with these exact features." In Total Call, the policyholder did not provide the service it promised in its advertisements, which by itself "carrie[d] no implication" that the one company's phone cards cost more or less than another's.).
Basic Research, LLC adv. Mary Tompkins, No. Civ. S-08-244 LKK/DAD, 2008 WL 1808316 (U.S.D.C. (E.D. Cal.) April 22, 2008) (Senior District Judge Lawrence K. Karlton) (Class action by California purchasers alleging false advertising about Akävar, a weight-loss product, was filed in California state court. G&A successfully removed case to California federal court, defeated motion to remand case back to state court, and obtained an order transferring case to federal court in Utah, client's home state.).
Indian Harbor Ins. Co. v. Hartford Cas. Ins. Co., No. B192829, 2007 WL 2955564, at *7 (Cal. Ct. App. (2d Dist.) Oct. 11, 2007) ("The allegations [in ¶¶ 28, 29 and 30 of the Adidas complaint] are not limited in time or by product line and potentially cover Skechers's advertising activities during the period covered by Hartford's policy. . . . Skechers also provided Hartford with a 1998-1999 catalog that advertised, during Hartford's policy period, allegedly infringing Skechers footwear described in the Adidas complaint.").
Basic Research, LLC adv. Teachers for Truth in Advertising, No. 8395 (California Superior Court, Mariposa County, Order filed July 28, 2003) (false advertising case only cognizable under Cal. Bus. & Prof. Code § 17500 transferred to Utah under forum non conveniens doctrine where no viable claims may be asserted by plaintiff who suffered no injury from alleged conduct).
Hewlett Packard Co. v. ACE Property & Casualty Co., No. C 99-20207 JW, *4-5 (U.S.D.C., N.D. Cal. Nov. 23, 2003) (In the first post-Hameid case to address the meaning of "advertising," the court again denied ACE's Motion for Reconsideration, stating: "Ace's motion for reconsideration is premised on the California Supreme Court's decision in Hameid v. National Fire Ins., 31 Cal.4th 16 (2003). . . . In Hameid, the California Supreme Court clarified that for purposes of a comprehensive general liability policy, ‘advertising' means ‘widespread promotional activities usually directed to the public at large.' Id. at 24. TheHameid decision, however, does not conclusively negate coverage. The Hameid decision did not address the issue before this Court: whether a package insert in a product that is distributed and sold worldwide is ‘advertising.' Indeed, the Hameiddecision expressly declined to address the question of ‘whether widespread promotional activities directed at specific market segments constitute advertising under the CGL policy.' Id. at 24, n. 3. Arguably, HP's package insert is widespread promotional activity directed at a specific market segment.")
Hewlett Packard Co. v. ACE Property & Casualty Co., No. C-99-20207 JW, 2003 WL 22126601 (N.D. Cal. March 4, 2003) (The court reaffirmed its finding that in an international policy, territory was defined as "worldwide for claim or suit resulting from an occurrence outside the United States of America." It found claims for damages which emanated from conduct outside the U.S. for an action pending within the U.S. to create a defense.).
Lockwood Int'l, B.V. v. Volm Bag Company, 273 F.3d 741, 744 (7th Cir. 2001), remanded, No. 96-C-673, 2002 U.S. Dist. LEXIS 13869 (E.D. Wis. June 28, 2002) (Justices Posner, Flaum, and Manion issued an opinion reversing and remanding the decision of Judge Randa. The panel found that a liability insurer with an obligation to defend a third-party action against its policyholder was precluded from avoiding its defense obligation by paying the plaintiff in the third-party action to replead covered and potentially covered claims as non-covered claims. The Court of Appeal condemned the insurers' tactics in unequivocal terms: "We have difficulty imagining a more conspicuous betrayal of the insurer's fiduciary duty to its insured than for its lawyers to plot with the insured's adversary a repleading that will enable the adversary to maximize his recovery of uninsured damages from the insured while stripping the insured of its right to a defense by the insurance company.")
Hewlett-Packard Co. v. CIGNA Property & Casualty Ins. Co., No. 99-20207 SW, 1999 U.S. Dist. LEXIS 20655 (N.D. Cal. Aug. 24, 1999) (Judge Spencer Williams found that the package inserts allegedly containing "fear, uncertainty and doubt" materials were advertisements and that the policy's territory was broad enough to encompass claims filed in the U.S. so long as potential injury arose outside of the U.S. Extraterritorial advertisements of HP in the underlying action bore a causal relationship to false advertising claims against HP. False advertising as well as trade libel claims also fell within the policy's coverage for the "advertising injury" offense of "unfair competition.").
COMSAT Corporation v. St. Paul Mercury Insurance Co., No. 97-2236, 1998 WL 34088218, at *5 (D. Minn. March 6, 1998) (The court found a duty to defend arose for claims asserted in an antitrust lawsuit within St. Paul's 1986 ISO-style coverage for "making known to any person or organization written or spoken material that belittles the products, work, or completed work of others." The fact allegations of disparagement were asserted in interference claims. The court reasoned, "If sufficient facts were pled in Sea-Fone that would support a covered ‘claim' or ‘offense', then the duty to defend is implicated, even though the Amended Complaint did not allege a specific count or theory of liability which fit neatly into one of the enumerated offenses in the St. Paul policy. . . . ‘[I]n many cases interference with contract is not so much a theory of liability in itself as it is an element of damages resulting from the commission of some other tort.' ").