Evanston Seeks To Stay Out Of Suit Over Posted DNA Results

by jeeg 16. July 2014 20:41


Evanston Insurance Co. sued Gene By Gene Ltd. in Texas federal court Wednesday, challenging coverage for a proposed class action accusing the genetic testing services company of automatically publishing results on its website without getting permission from customers. 

The Illinois-based insurer urged the federal court to apply an exclusion in its policy for claims based on violations of any statute that limits the transmission of information or other material.

Evanston contests a duty to defend or indemnify for the underlying suit, which alleges violations of Alaska's Genetic Privacy Act, under two general and professional liability policies as well as two excess policies.

“All of the Evanston policies contain a similar exclusion that exclude from coverage all claims asserted against Gene By Gene in the underlying lawsuit,” the insurer said in its complaint.

The insurance dispute stems from a proposed class action that accuses Gene By Gene of automatically posting full results of its customers' DNA tests on its “publically[sic] available website” without getting its customers' blessing.

The underlying plaintiff, Michael Cole, brought the putative class action on May 13 in Alaska federal court.

Cole claimed that Gene By Gene, also known as Family Tree, markets and sells DNA tests to consumers to help them research or identify their ancestry.

Family Tree offers customers who have received a DNA analysis the chance to research their origins, after which it automatically publishes their test results to its website, according to the suit.

Cole asks the Alaska federal court to require Family Tree to stop the alleged misconduct and to award actual damages as well as statutory damages of at least $5,000. Cole argues that Family Tree should pay $100,000 in statutory damages because its alleged violations of the Genetic Privacy Act allowed the company to reel in profits.

Evanston says it does not owe a duty to defend or indemnify Gene by Gene and seeks a ruling from the court saying as much.

A representative for Gene By Gene and an attorney representing Evanston were not immediately available to comment Wednesday.

The exclusion that Evanston raises in the dispute also applies to actions brought under the Telephone Consumer Protection Act and the CAN-SPAM Act, or any other similar statutes.

In a published opinion, the Eleventh Circuit recently applied a broad version of the TCPA exclusion, which applied to personal and advertising injuries tied to violations of “any statute” addressing the sending of “any material” by “any means whatsoever.”

Evanston's exclusion applies to any “statute, law, rule, ordinance or regulation that prohibits or limits the sending, transmitting, communication or distribution of information or other material.”

Evanston is represented by Marc Wojciechowski of Wojciechowski & Associates PC.

Counsel information for Gene By Gene was not immediately available.

The case is Evanston Insurance Co. v. Gene By Gene Ltd., case number 4:14-cv-01842, in the U.S. District Court for the Southern District of Texas.

--Editing by Patricia K. Cole. , Law360


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