The cell phone industry remains entangled in tort litigation to which its general liability insurance should apply. On October 29, 2009, the District of Columbia Court of Appeals held in Murray v. Motorola, Inc., that plaintiffs’ claims for bodily injuries resulting from cell phone use are not federally preempted if they arise from the use of cell phones that did not meet the radio frequency (“RF”) radiation standards adopted by the Federal Communications Commission (“FCC”), or if the cell phones in question were manufactured before the FCC promulgated those standards in 1996. At the same time, tort claims for damages against cellular telephone businesses and industry associations are impliedly preempted insofar as they seek to hold defendants liable for bodily injuries from cell phones that did meet the FCC’s RF radiation standards.1 The ruling may lead plaintiffs to pursue new claims alleging injuries from cell phone usage from a variety of businesses involved in the cell phone industry. If such litigation ensues, cellular telephone businesses and industry associations should turn to their insurers to defend these suits and to pay for any resultant liabilities.

The preemption of state law in cases alleging cell phone injuries is an unsettled area of the law. In 2008, the U.S. District Court for the Eastern District of Pennsylvania2 held that federal law preempted all state claims, but the U.S. Court of Appeals for the Fourth Circuit3 came to the opposite conclusion. Murray held that plaintiffs can sue cellular telephone businesses and industry associations under the D.C. Consumer Protection Procedures Act by alleging that the businesses and industry associations misrepresented or omitted health information about potential safety issues. Murray also held that personal injury claims are not preempted in two situations: (i) if the plaintiffs’ phones were built before 1996, the year the FCC began applying RF radiation limits to cell phones; or (ii) if the cell phones do not comply with FCC RF radiation standards.

Cell phone injury litigation raises a number of insurance coverage issues. The most important issue is whether insurers are required to defend the cellular telephone business or industry association in underlying cell phone injury class actions. Class actions alleging injuries from cell phone use have asserted that the cellular telephone businesses and industry associations should have equipped the phones with headsets to keep the phones (and emitted radiation) away from the user’s head where the RF radiation allegedly causes biological harm at the molecular level. Plaintiffs have sought general damages including, but not limited to, amounts necessary to purchase headsets and compensatory damages flowing from plaintiffs’ biological harm at the molecular level. In these kinds of cases, liability insurers often have refused to defend policyholders on the premise that the class actions did not sufficiently allege claims of “bodily injury” and “damages” due to “bodily injury” covered under the policies.

Commercial General Liability (CGL) insurance policies do not require a prescribed amount of “bodily injury” before coverage will apply. Indeed, courts have specifically upheld coverage even when the alleged injury took place at a molecular level. Courts also have refused to bar coverage for preventive measures. Instead, courts have upheld the insurers’ duty to defend underlying actions that allege subclinical harm from cellular telephone radiation, and required them to pay the policyholder’s liability to compensate class members for headsets (or the costs of headsets). For example, a Texas appellate court rejected the insurers’ arguments against coverage on the ground that claimants suffered no “diagnosable disease.” The court found no requirement that the injury be currently capable of diagnosis in the definition of bodily injury.4 Indeed, allegations of “adverse cellular change” have qualified as assertions of “bodily injury” under CGL policies in a number of decisions.5 These decisions have found allegations of molecular injury as the precursor of cancer to be sufficient to bring allegations within the definition of “bodily injury” in the policies. As the Samsung court held, the insurers’ “lack of harm” argument would, in effect, read an additional exclusion into the policy.6

Insurance companies also argue that the cell phone cases do not seek covered “damages” under CGL insurance policies to the extent plaintiffs seek only headsets or similar relief. Courts have generally rejected this argument. For example, in Motorola Inc. v. Associated Indemnity Corp.,7 the class sought “economic restitution” for headsets for plaintiff’s cell phones, as well as costs of medical monitoring and other “claims for any individualized physical injury.” The Motorola court concluded that the relief sought constituted covered damages. Similarly, in Voicestream Wireless Corp. v. Federal Insurance Co., the court also upheld coverage, finding that the headsets protected users from injury due to exposure to radiation and thus constituted covered damages.8

Murray adds to the debate over whether federal regulations should trump state laws in cases of alleged cellular telephone injuries. The plaintiffs there allege they suffered illnesses, including brain cancer, due to radiation emitted from their cell phones, and that the cellular telephone businesses’ and industry associations’ marketing misled them into believing their products were safe. The plaintiffs also claim that their phones failed to meet FCC regulations limiting the amount of radiation released. Although the decision seemingly raises the bar for plaintiffs, it also provides additional routes for parties seeking damages from cellular telephone businesses and industry associations. Cellular telephone businesses and industry associations and others implicated in these suits should look to their CGL insurers for protection.