Yahoo Inc.’s attempt to have a unit of American International Group Inc. defend itself in a Telephone Consumer Protection Act lawsuit ruled by the California Supreme Court last month was sent back to district court on Tuesday by a federal appeals court.
the case, Yahoo Inc. v. National Union Fire Insurance Co . in Pittsburghinvolves the AIG unit’s refusal to defend Sunnyvale, Calif.-based Yahoo in five putative class-action lawsuits, including two in California, alleging the company violated the TCPA by sending unsolicited text message advertisements to putative class members.
Yahoo sued for breach of contract in US District Court in San Jose, which granted the insurer̵7;s motion to dismiss the case. Faced with conflicting lower state court rulings, the 9th US Circuit Court of Appeals in San Francisco asked the California Supreme Court on appeal for its opinion on the matter.
In November, in a ruling deemed favorable to Yahoo, the state Supreme Court ruled that a commercial general liability policy can trigger the insurer’s duty to defend the insured against a TCPA claim.
However, the 9th Circuit said in Tuesday’s ruling that the state’s highest court had “expressed no opinion on the ultimate question — whether Yahoo! is entitled to a defense because “Yahoo’s objectively reasonable expectations … must be determined in future litigation.”
The appeals court said it is remanding the case to the trial court “Because the default record may be insufficient for us to determine Yahoo!’s reasonable expectations, and the parties have not briefed the issue.”