United States District Court, N.D. California
ORDER GRANTING NATIONAL UNION'S MOTION TO DISMISS
WITH LEAVE TO AMEND Re: Dkt. No. 15
NATHANAEL M. COUSINS United States Magistrate Judge
insurance breach of contract action, defendant National Union
Fire Insurance Company of Pittsburgh, PA (National Union)
moves to dismiss plaintiff Yahoo! Inc.'s (Yahoo)
complaint. The issue presented is whether the disputed
insurance provision provides coverage for Yahoo's alleged
violations of privacy. The Court grants dismissal because
National Union showed that Yahoo's construction of the
disputed insurance provision did not provide for coverage.
For the reasons set forth below the motion is GRANTED WITH
LEAVE TO AMEND.
Union sold Yahoo five consecutive Commercial General
Liability (CGL) insurance policies. Dkt. No. 1 at 6. The
policies each contain similar language, which provides
coverage for personal and advertising injury. Id. at
82-85. The policies contain Endorsement No. 1, which alters
coverage as to personal injury. Id. at 84. The
policy contains an endorsement in order to provide extended
coverage for personal and advertising injury. Endorsement No.
1 defines personal injury as “injury, including
consequential ‘bodily injury', arising out of one
more of the following offenses: . . . (e) oral or written
publication, in any manner, of material that violates a
person's right of privacy.” Dkt. No. 1 at 85. The
CGL policies provide that National Union will pay the sums
that Yahoo becomes legally obligated to pay as damages due to
personal injury. Dkt. No. 15 at 4.
the period of January 2013 to April 2014, several class
action lawsuits (Text Message Litigations) were filed against
Yahoo as a result of Yahoo's alleged transmission of
unsolicited text messages. Dkt. No. 1 at 2-6. These lawsuits
allege violations of the Telephone Consumer Protection Act,
47 U.S.C. § 227 (TCPA). Id. The Text Message
Litigations allege that through the unsolicited transmission
of the text messages, Yahoo invaded the privacy of the
plaintiffs. Id. at 3, 4.
the Text Message Litigations began, Yahoo notified National
Union to obtain coverage under the policy. Id. at 7.
National Union denied coverage. Id.
January 27, 2017, Yahoo filed its complaint, which alleges a
breach of contract claim due to National Union's denial
of coverage and consequent failure to defend. Dkt. No. 1. On
April 10, 2017, National Union filed its motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6).
See Dkt. No. 15. This Court has jurisdiction under
28 U.S.C. § 636(c) as both parties consented to
proceeding before a magistrate judge. See Dkt. Nos.
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
On a motion to dismiss, all allegations of material fact are
taken as true and construed in the light most favorable to
the non-movant. Cahill v. Liberty Mut. Ins. Co., 80
F.3d 336, 337-38 (9th Cir. 1996). The Court, however, need
not accept as true “allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Secs. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008). Although a complaint
need not allege detailed factual allegations, it must contain
sufficient factual matter, accepted as true, to “state
a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). A claim is facially plausible when it “allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
court grants a motion to dismiss, leave to amend should be
granted unless the pleading could not possibly be cured by
the allegation of other facts. Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000).
Union moves to dismiss Yahoo's complaint because the
insurance policy does not cover the Text ...