DUTY TO DEFEND TRIGGERED BY ALLEGATIONS OF BIOLOGICAL INJURY DUE TO USE OF CELL PHONES

In a 7-2 decision, the Texas Supreme Court has ruled that claims for “biological injury” are equivalent to claims for “bodily injury” and that complaints presenting broad statements such as “… brought for monetary damages” and “…. to obtain maximum legal and equitable relief” constitute a request for “damages because of bodily injury,” even when the requested relief appears to be limited to economic damages.

These findings were made in Zurich American Ins. Co. v. Nokia, Inc., Case No. 06-1030, a case that once again addressed the Texas “eight corners” rule, a rule which the Court continues to strictly apply.

Nokia raised the issue of whether a liability insurer had an obligation to defend putative class action complaints alleging that the use of cellular phones without headsets exposes the users to radio frequency radiation, which causes biological injury to brain cells. The difficulty was created by the fact that: (1) the complaints alleged that there were “no individual issues of injury” among the members of the class (implying that no damages were being sought for bodily injury); and (2) the only “damage” specifically sought was the cost of a headset (which would only prevent further exposure). In two of the three coverage cases, the trial court had found no duty to defend, but the Dallas Court of Appeals held in all three that such a duty existed.

In its opinion, the Court commented that it would not permit the carriers to use extrinsic evidence (such as class counsel’s statement that plaintiffs’ claims were not for bodily injury but for economic damages), but would adhere to a strict application of the “eight corners rule.” Only with respect to a single underlying case did the court find the absence of a duty to defend, because the amended pleading in that case specifically eschewed personal injury damages.

The majority opinion was authored by Chief Justice Jefferson. A dissenting opinion was issued by Justice Hecht, joined by Justice Brister, chastising the Court for taking a “naive” view of the class action allegations. Because there were no express claims for personal injury damages, the class was defined to include purchasers (not just users) of phones, and issues of individual personal injury would destroy any chance of class certification, Hecht concluded that there should be no duty to defend. The dissent concluded by lamenting that the Court’s decision “handles the eight-corners rule in a way that rewards cute and clever pleading that strains credulity.”

Although the facts of the underlying lawsuits are unlikely to be replicated, the Court’s strong adherence to both the “liberal construction” rule and a strict eight corners rule, even in the face of what appeared to be obvious attempts to avoid recovery of personal injury damages, is notable.


The opinion issued in Nokia, Inc., also applies to two other pending “cell phone” cases: Federal Ins. Co. v. Samsung Electronics America, Case No. 06-1040, and Trinity Universal Insurance Co. v. Cellular One Group, Case No. 07-0140.

By Sid Davis

Sidney H. Davis, Jr. passed away on October 26, 2009. If you are seeking legal help, or have a question about this article or a pending legal matter, please contact Dawn Woelfel Hansen at (214) 741-1166.

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