Features

Highlights of the latest insurance cases from around the country.

Features

The Telephone Consumer Protection Act ('TCPA'), 42 U.S.C. §227, was enacted to protect the privacy of individuals and businesses that were being inundated with unwanted faxes. The TCPA makes it unlawful 'to use any telephone facsimile machine, computer or other device to send an unsolicited advertisement to a telephone facsimile machine.' The statute expressly declares that its intent is to protect 'privacy rights.' 42 U.S.C. §227(b)(2)(B)(ii)(I).

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Since the 1980s, dozens of asbestos bankruptcy cases have been filed. In many of these cases, issues relating to the treatment of the debtor's insurance coverage for asbestos claims have been heavily litigated. To comprehensively discuss the handling of the debtor's insurance in these cases would be daunting and lengthy. This article provides an overview of the principal options and variations with respect to treatment of insurance in asbestos-related Chapter 11 proceedings and focuses on four recent asbestos bankruptcy cases.

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Insurer bad-faith liability &mdash; that is, any liability beyond the coverage or other benefits expressly provided for in the insurance contract &mdash; has been litigated for about a century. For most of that time, judges and jurors applied it sparingly in egregious cases of blatant abuse by insurers. However, the tort of bad faith, by proscribing (among other things) 'unfounded' denials of coverage motivated by 'self-interest,' has always existed in tension with insurers' fundamental duty to maximize enterprise value by, for instance, paying claims only when contractually required. This tension, rarely explicit in the early cases, increasingly is laid bare as policyholders aggressively (if understandably) press doctrinal boundaries in the hope of recovering tort damages in suits on insurance contracts. Two recent cases involving disability benefits from courts within the Third Circuit &mdash; <i>Northwestern Mut. Life Ins. Co. v. Babayan</i>, 430 F.3d 121 (3d Cir. 2005), and <i>Saldi v. Paul Revere Life Ins.</i>, 224 F.R.D. 169 (E.D. Pa. 2004) &mdash; illustrate this tension and suggest a need for judicial management to harmonize insurers' conflicting duties.

Recent cases in e-commerce law and in the e-commerce industry.

Many companies and organizations have hotlines that are needlessly weak or even ineffective, and they often don't even know it. Unfortunately, there are no up-to-date, authoritative standards for hotlines. This has forced Securities and Exchange Commission registrants and their auditors to use an unusually high degree of judgment in evaluating the effectiveness of hotlines for Sarbanes-Oxley '404 reporting. Non-registrants are more vulnerable to 'phantom hotline syndrome.'<br>Some entrepreneurs, and their advisers, may not be impressed by the need for a hotline at an e-business, but they're mistaken about the importance of this tool in the current environment of ever-increasing regulation and scrutiny of business practices.

Insurance coverage disputes regarding long-tail claims, such as toxic tort or environmental damage claims, often lead to protracted and expensive litigation. Dollars spent on that litigation often would be better spent in compensating the underlying case plaintiffs, such as victims of toxic torts, or in cleaning the environment. Further, such litigation is a substantial drain on already overburdened judicial resources. In resolving insurance coverage disputes, therefore, an important consideration should be whether a particular approach will encourage or discourage settlement of future disputes, while being fair to the litigants. An emerging issue that can have a significant impact on whether future coverage disputes will be settled or litigated to judgment is whether a non-settling insurer will receive a credit based upon settlements an insured has reached with other insurers in regard to the same occurrence and, if so, how that credit will be calculated. At least three approaches have begun to emerge. The approach chosen will have a substantial impact on whether litigants are treated fairly and whether settlement of future disputes will be encouraged or discouraged.

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e-Commerce Web sites' only constant is change. They must nimbly adjust prices and offerings on the fly to meet market conditions and customer profiles. And those aren't all of these sites' ongoing change requirements.<br>One thing that doesn't change, however, is their reliance on data ' customer preferences as well as transaction information. Although e-commerce Web sites are an inherently transient medium, that data is as worthy of preservation as a treasure map or share certificate of old, because, in many ways, it is worth more than money.<br>For these firms, a record-keeping and record-retention policy seem to be electronic oxymorons, as much as an 'inexpensive lawyer' or 'friendly litigation' may seem to many people The controlled destruction of records typically associated with such policies in the post-Enron and Arthur Andersen era appears to fly in the face of the needs and realities of e-commerce, as much as do traditional notions of photocopying and saving every paper business record.