On April 6, 2016, the Florida Second District Court of Appeal in Vogue International, LLC v. Hartford Casualty Insurance Company, Case No. 2D15-3131, affirmed the trial court’s ruling on summary judgment in favor of Hartford Casualty Insurance Company (Hartford), finding no duty to defend an underlying class action complaint in Golloher, et al. v. Todd Christopher Int’l, Inc. dba Vogue Int’l., Case No. 3:12-cv-06002-RS (N.D. Cal.) (Class Action) under general liability policies (the Policies) that Hartford issued to Todd Christopher International dba Vogue International (TCI).
The Class Action alleged consumer fraud in relation to TCI’s use of the terms “organic” and “Organix” with its hair products. Specifically, the Class Action alleged that TCI’s use of these terms falsely represented the quality of TCI’s hair product as “organic” when the products were allegedly not made of organic ingredients.
Plaintiff Vogue International, LLC dba Vogue International (Vogue), as successor in interest to TCI, argued that the Class Action was covered under the “personal and advertising injury” enumerated offense of “[o]ral, written or electronic publication of material that…disparages a person’s or organization’s goods, products or services” (Disparagement Offense). However, the trial court found that “[c]learly Vogue made no disparaging statement related to the Plaintiffs [i.e., class members] or competitors” who brought the Class Action. As such, the trial court held there were no allegations of “disparagement” sufficient to require coverage under the Policies.
Additionally, the District Court affirmed the trial court’s ruling that the Quality of Goods exclusion, barring coverage for “personal and advertising injury arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your ‘advertisement’ or on ‘your web site’,” applied to eliminate coverage of the Class Action. In this case, since the Class Action related to the quality and makeup of the subject Organix products, coverage was barred under the Quality of Goods exclusion.
The District Court’s decision is in line with numerous other jurisdictions that have denied coverage for consumer class action claims under the “personal and advertising injury” enumerated offense for disparagement. The clear and explicit language of the disparagement offense requires a disparaging remark of “a person’s or organization’s goods, products or services.” Here, the consumers did not sell the “Organix” products and so no product sold by any member of the class could be disparaged. Rather, the Class Action was a claim for false advertising and/or consumer fraud, which did not and could not fall under the disparagement offense.