Court Opinion

ID: 8203961
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:50:06.703498+00
Date Added: 2024-06-11T16:41:05.331460
License: Public Domain

FINE, J.
¶ 26. 0dissenting). As the Majority tells us, the Telephone Consumer Protection Act, 47 U.S.C. § 227, makes it "unlawful... to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement," with exceptions not material in this case. 42 U.S.C. § 227(b)(1)(C). The potential penalties are withering:
Private right of action
A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State—
(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,
(B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or
(C) both such actions.
If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.
47 U.S.C. § 227(b)(3). These penalties are an irresistible lure for the class-action lawsuit, which multiplies geometrically the potential liability of anyone who sends an unsolicited facsimile that violates the Act. As Creative Montessori Learning Centers v. Ashford Gear LLC, 662 F.3d 913, 914-915 (7th Cir. 2011) (junk faxes), tells us: "Certification as a class action can 'coerce the *734defendant into settling on highly disadvantageous terms, regardless of the merits of the suit,' and in this case is 'highly likely to because of the magnitude of the potential damages.'" (quoted sources omitted). The firm criticized by name in Creative Montessori Learning Centers, Bock and Hatch, LLC, id., 662 F.3d at 916-917 ("class counsel have demonstrated a lack of integrity that casts serious doubt on their trustworthiness as representatives of the class"), appears, as "of counsel" on Isaac Sawyer's federal court "class action complaint." (Uppercasing omitted.) "Anyway, the statute, with its draconian penalties for multiple faxes, is what it is[,]" id., 662 F.3d at 915, and we are merely called upon to determine whether West Bend Mutual Insurance Company has a duty to defend Atlas Heating and Sheet Metal Works, Inc., in connection with the "draconian penalties" Atlas faces if this class is certified by the federal courts.
¶ 27. An insurance policy is a contract between the insurer and the insured, Admiral Ins. Co. v. Paper Converting Machine Co., 2012 WI 30, ¶ 41, 339 Wis. 2d 291, 308, 811 N.W.2d 351, 360, and is interpreted and applied as are other contracts, State Farm Mut. Auto. Ins. Co. v. Bailey 2007 WI 90, ¶ 22, 302 Wis. 2d 409, 420-421, 734 N.W.2d 386, 391. Critically, we give the language of an insurance policy its ordinary meaning— "what the reasonable person in the insured's position would understand it to mean." Id., 2007 WI 90, ¶ 22, 302 Wis. 2d at 421, 734 N.W.2d at 391. Let's look at the "personal and advertising injury" clause in the policy and see how a reasonable insured would read it.
¶ 28. As the Majority tells us, the policy has this undertaking: "We will pay those sums that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury' to which this insur*735anee applies." As material here, the policy defines "personal and advertising injury" as "written publication, in any manner, of material that violates a person's right of privacy." (Emphases added.) This definition has three interconnected requirements. There must be:
• A "written publication";
• The "written publication" must be of "material";
• The "material" must "violate[] a person's right to privacy."
(Emphasis added.)
¶ 29. I agree with the Majority that sending a facsimile, whether wanted by the recipient or not wanted is "publication." But, under the policy the "material" must violate the recipient's "right to privacy" in order to be covered. In my view, the advertisement for sheet-metal work sent by Atlas is not that kind of "material" because it did not violate anyone's right to privacy. Significantly, Sawyer's lawyer conceded at oral argument that it is not the sending of a facsimile that violates the Act and, in his view, the recipient's "privacy" (although the Majority opinion seems to imply that it is) because he admitted that sending by facsimile a blank sheet of paper or even pictures of his family would not violate the recipient's privacy even though, of course, sending a blank sheet of paper uses the recipient's paper, and sending pictures of his family would not only use the recipient's paper but also a significant amount of ink. Simply put, the Act does not make unlawful all unwanted facsimiles, the facsimile must be an "unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C) (emphasis added). This means, of course, that if the transmission itself is not an invasion of privacy so as to violate the statute (as Sawyer's lawyer conceded at oral argument), *736the nature of the advertisement must be an invasion of "privacy." Again, as I further explain below, there is nothing in the advertisement that violated Sawyer's (or anyone's) right to privacy. I now turn to: (A) further consideration of the Act; (B) the right-to-privacy concept in our law; and (C) the policy and what Atlas bought by paying its liability-coverage premiums.
A. The Act.
¶ 30. As noted, Atlas faxed to Sawyer a one-page advertisement for sheet-metal work. That was unlawful under the Act. There is nothing in the Act, however, that characterizes the receipt of an unwanted advertising facsimile as an invasion of privacy. Indeed, the Act also makes unlawful the making of unsolicited telemarketing telephone calls (with exceptions not material to our discussion) and explicitly uses the word "privacy" in connection with those telephone calls; it does not used the word "privacy" in connection with the sending of unwanted advertising facsimiles. See 47 U.S.C. §§ 227(b)(2) & (c), the pertinent parts of which are in the footnote.1 I have italicized the phrase "privacy rights" wherever it appears.
*737¶ 31. Congress used the term "privacy" only in connection with telephone telemarketing violations of *738the Act, not the transmission of advertising facsimiles, and it recognized the distinction between the two.
• "The term 'telephone facsimile machine' means equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper. 47 U.S.C. § 227(a)(3).
• In contrast, and as material: "The term 'telephone solicitation' means the initiation of a telephone call *739or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person[.]" 47 U.S.C. § 227(a)(4).
• Further, the Act recognizes that advertisement can be both oral (over the telephone) and written (by facsimile): "The term 'unsolicited advertisement' means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." 47 U.S.C. § 227(a)(5) (emphasis added).
Indeed, the Congressional findings reveal specifically that Congress's "privacy rights" concern was in connection with telephone telemarketing, as is evidenced by the findings in the footnote.2 Again, I have italicized the *740word "privacy" wherever it appears in the findings. Moreover, Senate Report No. 102-178 (1991 WL *741211220) on the Act distinguished between the privacy interests invaded by telephone telemarketers on the one hand, and the annoyance and expense caused by unsolicited facsimile transmissions: "The purposes of the bill are to protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls to the home and to facilitate interstate commerce by restricting certain uses of facsimile (tax)[sic\ machines and automatic dialers." (Emphases added).
¶ 32. We ignore the deference we owe to legislative enactments if we import a "privacy" component into the Act's facsimile provisions when Congress, recognizing the greater annoyance of an unwanted telephone telemarketing calls, used the word "privacy" only in provisions dealing with those intrusions. Significantly, 47 U.S.C. "§ 227(b)(1)(C) condemns only a particular means of communicating an advertisement, rather than the contents of that advertisement — while an advertising-injury coverage deals with informational content." American States Ins. Co. v. Capital Associates of Jackson County, Inc. 392 F.3d 939, 940, 943 (7th Cir. 2004) (Advertising-injury clause, "publication of material that violates a person's right of privacy [,]" "does not cover the normal consequences of junk advertising faxes.") (emphasis added) (The West Bend policy clause is a clone of the policy clause in American States.). This is further evident when we examine the law's concept of "privacy," to which I now turn.
B. Privacy.
¶ 33. The concept of invasion of privacy has accepted contours in the law. Thus, the Restatement of Torts tells us:
*742The right of privacy is invaded by
(a) unreasonable intrusion upon the seclusion of another, as stated in § 652B; or
(b) appropriation of the other's name or likeness, as stated in § 652C; or
(c) unreasonable publicity given to the other's private life, as stated in § 652D; or
(d) publicity that unreasonably places the other in a false light before the public, as stated in § 652E.
Restatement (second) Torts § 652A(2). Subparts (b), (c), and (d) are clearly not applicable. The only possible lever for Sawyer is subpart (a). But the "seclusion" encompassed by that black-letter rule does not apply here, as the referenced section tells us: "One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person." Restatement (second) Torts § 652B (emphasis added). Sawyer may not have liked getting the facsimile, and his lawyers are hoping to find many more who want to get their statutory penalty, but it stretches the concept of privacy beyond the breaking point to even suggest that the single facsimile Sawyer received was the type of "material" (in the word of the West Bend insurance policy) that "would be highly offensive to a reasonable person." The Restatement comment that is closest to the unwanted-facsimile situation is:
There is likewise no liability unless the interference with the plaintiffs seclusion is a substantial one, of a kind that would be highly offensive to the ordinary reasonable man, as the result of conduct to which the *743reasonable man would strongly object. Thus there is no liability for knocking at the plaintiffs door, or calling him to the telephone on one occasion or even two or three, to demand payment of a debt. It is only when the telephone calls are repeated with such persistence and frequency as to amount to a course of hounding the plaintiff, that becomes a substantial burden to his existence, that his privacy is invaded.
Restatement (second) Torts § 652B, cmt. d. (Emphasis added.)
¶ 34. Further, Wisconsin's legislature has defined "privacy" for us in Wis. Stat. § 995.50(2) in a way that is consistent with the Restatement:
In this section, "invasion of privacy" means any of the following:
(a) Intrusion upon the privacy of another of a nature highly offensive to a reasonable person, in aplace that a reasonable person would consider private or in a manner which is actionable for trespass.
(b) The use, for advertising purposes or for purposes of trade, of the name, portrait or picture of any living person, without having first obtained the written consent of the person or, if the person is a minor, of his or her parent or guardian.
(c) 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. It is not an invasion of privacy to communicate any information available to the public as a matter of public record.
(d) Conduct that is prohibited under s. 942.09, regardless of whether there has been a criminal action *744related to the conduct, and regardless of the outcome of the criminal action, if there has been a criminal action related to the conduct.
(Emphasis added.) The only possible applicable subsection is (a), and "[t]he test is an objective one: whether a reasonable person would find the intrusion highly offensive." Gillund v. Meridian Mut. Ins. Co., 2010 WI App 4, ¶ 29, 323 Wis. 2d 1, 20, 778 N.W.2d 662, 672 (Ct. App. 2009). Thus, it does not matter how Sawyer viewed the Atlas facsimile if a "reasonable person" would not find it "highly offensive." Significantly, Sawyer does not tell us why he finds (if he does) the one-page sheet-metal advertisement to be "highly offensive," no less why a reasonable person would. Nevertheless, the Majority concludes, as a matter of law, "that the unsolicited advertisement was highly offensive." Majority, ¶ 22.
¶ 35. What the Majority's as-a-matter-of-law holding means, is that every piece of junk mail, advertising material slipped under an apartment door, or placed in a mail/paper box, or attached to the homeowner's door knob, or, slipped under a car's windshield-wiper blade (perhaps the most annoying unsolicited advertisements) will fall within Wis. Stat. § 995.50(2)(a)'s proscription because the advertisement would be: (1) a trespass and (2), under the Majority's analysis, "highly offensive" as a matter of law. This will be another boon to creative class-action lawyers because § 995.50(1) permits not only, under subsection (b), "[cjompensatory damages based either on plaintiffs loss or defendant's unjust enrichment," but also, under subsection (c), "[a] reasonable amount for attorney fees."
¶ 36. Again, in my view of the law, the Atlas facsimile may have violated the Act, but the advertisement was hardly "highly offensive" and certainly was *745not "material that violate[d] a person's right of privacy," as required by the insurance policy for there to be coverage.
C. The policy's grant of liability coverage.
¶ 37. I now turn to the policy and whether a reasonable insured would understand the policy's liability coverage to encompass a single transmission advertising facsimile similar to the one Atlas sent to Sawyer.
¶ 38. Courts recognize that in assessing what reasonable persons might expect from what they hear or read, "the meaning of a word depends on what it denotes to members of the appropriate linguistic community, not on idiosyncratic usages that people may be able to devise." Blue Cross Blue Shield of Massachusetts, Inc. v. BCS Ins. Co., 671 F.3d 635, 638 (7th Cir. 2011) (emphasis added). See also Taniguchi v. Kan Pacific Saipan, Ltd., 566 U.S. _, _, 132 S. Ct. 1997, 1998 (May 21, 2012) (An undefined word "must be given its ordinary meaning."). The "appropriate linguistic community" here is the reasonable insured.
¶ 39. In assessing what a reasonable insured would expect his or her insurance policy to cover, the premium paid is a valuable guide because reasonable insureds recognize that premiums are a function of potential liability. Thus, a reasonable insured would willingly pay more to get automobile-damage coverage on a pristine and low-mileage vintage Rolls Royce than he or she would on a twenty-year old battered and rusted clunker with more than two-hundred thousand miles on the odometer. By the same token, no insurance company would insure the Rolls Royce in my example for the premium it would charge to insure the clunker. The law in Wisconsin can hardly be more plain: "[W]e do not interpret insurance policies to provide coverage *746for risks that the insurer did not contemplate or underwrite and for which it has not received a premium." American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶ 23, 268 Wis. 2d 16, 32, 673 N.W.2d 65, 73. See also Maxwell v. Hartford Union High School District, 2012 WI 58, ¶ 34, 341 Wis. 2d 238, 255, 814 N.W.2d 484, 492 ("A contract of insurance should not be rewritten to bind the insurer to a risk it did not contemplate and for which it has not been paid.") (emphasis added).
¶ 40. As we have seen, the Act subjects someone who sends an unsolicited facsimile advertisement to a minimum liability of $500 per facsimile, which the court has the power to triple to $1,500 per facsimile. That is the liability Sawyer seeks to impose on West Bend. If he gets class-action certification, the potential liability is unbounded — the well is deep and the bucket is huge. But Atlas only paid $1,362 for its liability coverage. Imposing coverage here violates the touchstone teaching oí American Girl because the actuarial assessment of a proper premium for "advertising injury" liability coverage could not have envisioned that a facsimile like the one here could possibly trigger insurance coverage for a violation of the Act with its draconian penalties.
¶ 41. As much as Sawyer and his class-action lawyers would like to have a deep pocket for the reasons expressed by Creative Montessori Learning we quoted earlier, insurance premiums must cover insurance-company costs and give the company a reasonable return —money paid out that is wholly out of proportion to the premiums must come from someone — other policy holders. Simply put, "insurance companies are not eleemosynary endeavors." Bruchert v. Tokio Marine & Nichido Fire Ins. Co., Ltd., 2007 WI App 156, ¶ 12, 303 Wis. 2d *747671, 678, 736 N.W.2d 234, 238. Moreover, Sawyer and his class-action lawyers are hardly suitable beneficiaries of charity in this case.
¶ 42. I respectfully dissent and would reverse.

 Section 227(b)(2) provides:
The [Federal Communications] Commission shall prescribe regulations to implement the requirements of this subsection. In implementing the requirements of this subsection, the Commission—
(A) shall consider prescribing regulations to allow businesses to avoid receiving calls made using an artificial or prerecorded voice to which they have not given their prior express consent;
(B) may, by rule or order, exempt from the requirements of paragraph (1)(B) of this subsection, subject to such conditions as the Commission may prescribe—
(i) ceills that are not made for a commercial purpose; and
*737(ii) such classes or categories of calls made for commercial purposes as the Commission determines—
(I) will not adversely affect the privacy rights that this section is intended to protect; and
(II) do not include the transmission of any unsolicited advertisement;
(C) may, by rule or order, exempt from the requirements of paragraph (l)(A)(iii) of this subsection calls to a telephone number assigned to a cellular telephone service that are not charged to the called party, subject to such conditions as the Commission may prescribe as necessary in the interest of the privacy rights this section is intended to protect;
Section 227(c) provides:
(1) Rulemaking proceeding required
Within 120 days after December 20,1991, the Commission shall initiate a rulemaking proceeding concerning the need to protect residential telephone subscribers' privacy rights to avoid receiving telephone solicitations to which they object. The proceeding shall—
(A) compare and evaluate alternative methods and procedures (including the use of electronic databases, telephone network technologies, special directory markings, industry-based or company-specific "do not call" systems, and any other alternatives, individually or in combination) for their effectiveness in protecting such privacy rights, and in terms of their cost and other advantages and disadvantages;
(2) Regulations
Not later than 9 months after December 20, 1991, the Commission shall conclude the rulemaking proceeding *738initiated under paragraph (1) and shall prescribe regulations to implement methods and procedures for protecting the privacy rights described in such paragraph in an efficient, effective, and economic manner and without the imposition of any additional charge to telephone subscribers.
(3) Use of database permitted
The regulations required by paragraph (2) may require the establishment and operation of a single national database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations, and to make that compiled list and parts thereof available for purchase. If the Commission determines to require such a database, such regulations shall—
(K) prohibit the use of such database for any purpose other than compliance with the requirements of this section and any such State law and specify methods for protection of the privacy rights of persons whose numbers are included in such database; and
(L) require each common carrier providing services to any person for the purpose of making telephone solicitations to notify such person of the requirements of this section and the regulations thereunder.

 " 'The Congress finds that:
(1) The use of the telephone to market goods and services to the home and other businesses is now pervasive due to the increased use of cost-effective telemarketing techniques.
(2) Over 30,000 businesses actively telemarket goods and services to business and residential customers.
(3) More than 300,000 solicitors call more than 18,000,000 Americans every day.
(4) Total United States sales generated through telemarketing amounted to $435,000,000,000 in 1990, a more than four-fold increase since 1984.
(5) Unrestricted telemarketing, however, can be an intrusive invasion of privacy and, when an emergency or medical assistance telephone line is seized, a risk to public safety.
(6) Many customers are outraged over the proliferation of intrusive, nuisance calls to their homes from telemarketers.
(7) Over half the States now have statutes restricting various uses of the telephone for marketing, hut telemarketers can evade their prohibitions through interstate operation; therefore, Federal law is needed to control residential telemarketing practices.
*740(8) The Constitution does not prohibit restrictions on commercial telemarketing solicitations.
(9) Individuals' privacy rights, public safety interests, and commercial freedoms of speech and trade must be balanced in a way that protects the privacy of individuals and permits legitimate telemarketing practices.
(10) Evidence compiled by the Congress indicates that residential telephone subscribers consider automated or prerecorded telephone calls, regardless of the content or the initiator of the message, to be a nuisance and an invasion of privacy.
(11) Technologies that might allow consumers to avoid receiving such calls are not universally available, are costly, are unlikely to be enforced, or place an inordinate burden on the consumer.
(12) Banning such automated or prerecorded telephone calls to the home, except when the receiving party consents to receiving the call or when such calls are necessary in an emergency situation affecting the health and safety of the consumer, is the only effective means of protecting telephone consumers from this nuisance and privacy invasion.
(13) While the evidence presented to the Congress indicates that automated or prerecorded calls are a nuisance and an invasion of privacy, regardless of the type of call, the Federal Communications Commission should have the flexibility to design different rules for those types of automated or prerecorded calls that it finds are not considered a nuisance or invasion of privacy, or for noncommercial calls, consistent with the free speech protections embodied in the First Amendment of the Constitution.
(14) Businesses also have complained to the Congress and the Federal Communications Commission that automated or prerecorded telephone calls are a nuisance, are an invasion of privacy, and interfere with interstate commerce.
(15) The Federal Communications Commission should consider adopting reasonable restrictions on automated or prerecorded calls to businesses as well as to the home, consistent with the constitutional protections of free speech.'"
Telephone Consumer Protection Act of 1991, Pub.L. No. 102-243, § 2 (Emphasis added.)