As is usual in an insurance coverage dispute, the path to this decision is anything but straightforward. Back in ancient times — that is, about six years ago — Sony was sued for misrepresenting the DVD-playback capabilities of the PlayStation2. Sony then tendered the claim to two insurance companies, asserting that the policies required both provision of a defense and indemnification by the insurance companies. The court described the underlying lawsuit like this:
The Kim/Kaen plaintiffs alleged that the PlayStation 2s suffered from an "inherent" or "fundamental" design defect that rendered them unable to play DVDs and certain game discs. The complaints set forth causes of action for breach of express and implied warranties, fraud, negligent misrepresentation, bad faith, violations of the Consumer Legal Remedies Act (Cal. Civ. Code § 1750 et seq.), false advertising (Cal. Bus. & Prof. Code § 17500 et seq.), and unfair business practices (Cal. Bus. & Prof. Code § 17200 et seq.). The assertions in the false advertising and negligent misrepresentation claims primarily revolved around Sony’s statements in press releases, advertising, product packaging, and instruction manuals that the PlayStation 2 would function as a DVD player as well as a game player.
Sony Computer Entertainment Am., Inc. v. American Home Ins. Co., No. 05-17425, DTOS 8749, 8756 (9th Cir. 15 Jul. 2008). The key question, though, is this: Did Sony's actions fall within the definition of "negligent publication," as covered by the respective insurance policies, or not?
And here, I'm afraid, the courts, the insurance industry, and just about everyone else connected to this begin to go wrong. "Publication", as a term, means a great many things, some exclusive and some otherwise. This time, it was a party inappropriate relying on "dictionaryism" instead of the context of the insurance policy; this is at least in part due to the strains placed on the underlying complaints by the minutiae of product-liability law when the product does not cause death or a personal injury, but instead only a purported harm to a property interest. The court was having none of it, though.
[T]he AISLIC policy was a media liability policy. Its affirmative coverage provisions were strictly limited to the types of claims normally faced by media publishers, such as defamation, copyright infringement, and so on. Notably absent from those provisions was any coverage for product defects. In fact, the exclusions in the policy made clear that it was not intended to protect Sony from suits like Kim/Kaen. AISLIC explicitly disclaimed liability for suits alleging breach of warranties, representations, or guarantees (Exclusion J); for suits arising from violations of consumer protection laws (Exclusion C); and for suits alleging false advertising or misrepresentation in advertising (Exclusion P).
Id. at 8761. Authors, though, will be most interested in the discussion of the kinds of cases that are within the scope of "negligent publication" that follows just after the rejection of Sony's theory.
[I]n one line of cases, "negligent publication" is used to describe a cause of action in which plaintiffs attempt to hold publishers liable for material that led readers to engage in harmful conduct[:] a plaintiff sued magazine for the "negligent publication" of an advertisement for firearms that she alleged led her son to accidentally kill himself; a plaintiff sued the publisher of a diet book, claiming that his wife — who read the book and followed its instructions — died of cardiac arrest due to the book's "negligent publication"; abduction victim brought action against newspaper for the negligent publication of her name and address while her assailant was still at large; son and mother of murder victim sued magazine for publishing gun for hire advertisement through which victim’s husband hired assassin to kill her.
Other courts have used the term "negligent publication" to explain that creative pleading does not change the analysis of a defamation-based claim or applicable privileges, or to describe one of the elements of a defamation action. In addition, "negligent publication" has been used to describe negligence on the part of advertisers who breached contracts by erroneously printing plaintiff's information.
Id. at 8762-63 (citations omitted). This matters to authors because the best practice in many instances is for authors to be named as additional insureds on the publisher's policy... so having at least some understanding of what is, and is not, potentially covered by insurance can have some profound effects on writers.
During the first year of law school, professors often advocate a "seamless web" model of the law. In this instance, publishing and copyright law (and, as an aside, relying upon copyright definitions of "publication" would not have helped... because the term is largely undefined), defamation law, civil procedure, insurance law, and lots and lots of billable hours have come together to create a headache for everyone. It's not a seamless web, by any definition: It's rather seamy. This case, though, demonstrates pretty well that some really bizarre legal theories can matter to authors.