CGL Insurers Must Defend Cell-Phone Manufacturer in Class Actions

Cell-phone manufacturers have been named as defendants in several class actions nationwide. The class-action plaintiffs allege that repeated exposure to microwave signals emitted by the cell phones creates an increased risk of brain cancer. They seek to compel the manufacturers to provide headsets (or the cost of headsets), to minimize the risk of microwave exposure. In one case, Naquin v. Nokia, the class-action plaintiffs seek the cost of medical monitoring.

Are these claims covered by the manufacturers' CGL insurers? In a pair of decisions released yesterday, the Louisiana First Circuit answered that they could be. Thus, the insurers must defend the manufacturer.

The manufacturer, Motorola, sued its CGL insurers for declaratory judgment obligating the insurers to defend and indemnify Motorola. One insurer, Zurich, moved for summary judgment, and Motorola cross-moved for summary judgment. The trial court granted Zurich's motion and denied Motorola's. But the Louisiana First Circuit reversed. "We cannot say, as a matter of law, that the relief sought by the class action plaintiffs falls outside the broad scope of 'damages because of bodily injury.' Thus, we conclude that Zurich's policy imposes the duty to defend Motorola under the factual allegations of the Class Actions. The resolution of the issue of Zurich's duty to indemnify Motorola will necessarily depend on the disposition of the merits of the Class Actions." Motorola, Inc. v. Associated Indem. Corp., No. 2002-CA-0716, slip op. (La. App. 1 Cir. June 25, 2004). See also Motorola, Inc. v. Associated Indem. Corp., No. 2002-CA-1351, slip op. (La. App. 1 Cir. June 25, 2004) (companion appeal following summary judgment in favor of other insurers).

Posted by RPW at June 26, 2004 12:07 PM