United States District Court, Middle District of Tennessee, Nashville Division
WILLIAM J. HAYNES, JR., SENIOR UNITED STATES DISTRICT JUDGE.
Plaintiff, Allstate Insurance Company ("Allstate"), an Illinois corporation filed this action under 28 U.S.C. § 1332, the federal diversity jurisdiction statute against the Defendant, Kaigler & Company, Inc. ("Kaigler"), a Tennessee corporation seeking a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. Allstate seeks a judicial declaration on its coverage obligations to Kaigler in an Illinois state court.
Before the Court is Allstate's motion for judgment on the pleadings (Docket Entry No. 25), contending that the "accident event" coverage in its policy issued to Kaigler is limited to "bodily injury" or "property damage" not injuries from violations of Telephone Consumer Protection Act ("TCPA") that is the legal basis for the claims against Kaigler. In response, Kaigler asserts that, under recent Sixth Circuit precedent, this Court lacks subject matter jurisdiction in this action because, with the individual plaintiff in the state court's failure to present a claim in excess of $75, 000, Plaintiff fails to satisfy the requirement for diversity jurisdiction.
Plaintiffs claim involves an Illinois state court action in which Kaigler is the defendant in claims by a plaintiff as the representative of a class of similarly-situated persons. See Lawrence S. Brodsky, Individually and as the Representative of a class of similarly-situated persons v. Kaigler & Company. Case No. 2008 CH 44036, Circuit Court for Cook County Illinois. The Illinois plaintiffs claims are for unsolicited fax advertisements in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 and arise only under the advertising injury coverage in the parties' insurance contract. The Illinois plaintiff also asserts a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act for similar injuries.
A. Analysis of the Complaint
The Illinois plaintiff alleges that, on or about September 4, 2008, Kaigler sent an unsolicited fax advertisement to him and similar fax advertisements to other persons without the recipients' permission or invitation. The Illinois plaintiff seeks statutory damages under the TCPA of $500 per violation for the recipients' lost paper and toner, use of fax machines, wasted employee time in reviewing faxes and interrupted privacy interests.
In a recent filing, Allstate described what class members expect to receive. Specifically, Allstate contends that "[t]he Class is entitled to statutory damages under the TCPA, " and "[t]he Class should receive $500 for each violation." Docket Entry No. 38-1, Plaintiffs Memorandum of Law in Support of Summary Judgment Filed in the Circuit Court of Cook County, Illinois at 13.
From September 22, 2005 until September 22, 2009, Allstate insured Kaigler under policy number 010 049 947051 ("the Allstate Policies") that defined its coverage of Kaigler's business liability as follows:
Coverage B - Business Liability
Part One - Comprehensive Liability
We will pay on behalf of persons insured all sums which they become legally obligated to pay as damages arising out of an accidental event, personal injury or advertising injury that occurs while this policy is in effect....
Limits of Liability
The maximum amount we will pay for each accidental event or personal injury covered under this Part, no matter how many persons insured, injured parties, property owners or claims are involved, will not exceed the limit of ...