USA – ILLINOIS Trends and Developments Contributed by: Everett J. Cygal, Daniel J. Schufreider, Jasmine K. Dela Luna, Sarah M. Oligmueller and Christopher L. Gerardi, ArentFox Schiff LLP
duced it. On 12 December, the director filed a motion for summary judgment, which the court stayed pend- ing further order on 15 December. Any ensuing orders will set important precedents on: • the director’s ability to demand out-of-state policy data accessible in Illinois from domestics and affili- ates; • the scope of market conduct and holding company examination authority, including access to third party data “by contractual relationships” or “other methods”; and • the interplay between confidentiality safeguards and compelled production in co-ordinated state- based regulation. For insurers and reinsurers with Illinois domiciles or significant Illinois operations, early rulings in this case will inform examination response protocols, record- keeping and enterprise risk reporting practices. Citizens Ins. Co. of Am. v Mullins Food Products, Inc., 135 F.4th 1082, 1094 (7th Cir. 2025) This case is the most recent in a line of Seventh Cir- cuit cases involving the application of policy exclu- sions to claims against insureds under BIPA. Citizens Insurance Company of America brought suit against its insured, Mullins Food Products, Inc., seeking a declaratory judgment that it did not have any duty to defend or indemnify Mullins in an underlying action alleging violations of BIPA. The District Court granted summary judgment to Citizens on the basis of two separate policy exclusions: an “Access or Disclosure” exclusion that barred coverage for injuries arising out of disclosure of personal information; and a “Statu- tory Violations Exclusions” that barred coverage for injuries arising from violations of the Telephone Con- sumer Protection Act (TCPA), the CAN-SPAM Act of 2003 and the Fair Credit Reporting Act (FCRA), and also included a catch-all exclusion for “any federal, state or local statute, ordinance or regulation, other than the TCPA, CAN-SPAM Act of 2003 or FCRA… that addresses, prohibits, or limits” the distribution of material or information. On appeal, the Seventh Circuit agreed that the “Access or Disclosure” exclusion, which appeared in
only two of the three policies at issue, barred coverage for the BIPA claims. However, the court reversed the District Court with respect to the Statutory Violation Exclusion that appeared in all three policies. Applying Illinois and Seventh Circuit precedent involving simi- lar exclusions, as well as traditional statutory canons of construction, the court concluded that BIPA was not included in the catch-all exclusion because it was “patently different in kind” from the other statutes spe- cifically mentioned: the TCPA, the CAN-SPAM Act and the FCRA. Having found that the exclusion did not apply, the court remanded the case for the District Court to decide whether Mullins had provided timely notice of the underlying litigation, which was a fac- tual dispute that needed to be resolved to determine whether Citizens breached its duty to defend. In re Socy. Ins. Co. COVID-19 Bus. Interruption Protec. Ins. Litig., No 20 C 02005, 2025 WL 2156594, at *1 (N.D. Ill. July 30, 2025) Another decision in a seemingly endless line of law- suits brought by insured businesses against their insurers seeking coverage for loss of income incurred as a result of shutdowns during the COVID-19 pan- demic. This opinion relates to a multi-district litiga- tion (MDL) against Society Insurance Company, based on its denial of business income interruption coverage for a number of restaurant and hospital- ity industry plaintiffs. Like many similar policies, the business income coverage provisions in Society’s policies stated that they applied for losses caused by “direct physical loss”. Although the District Court had previously denied Society’s attempts to dismiss the cases against it and found that the coronavirus and shutdown orders could trigger coverage, the court reversed course and granted Society’s renewed motion to dismiss based on a string of more recent decisions denying such claims. For the portion of the MDL governed by Illinois law, the court applied the controlling decision from the Seventh Circuit in Sandy Point Dental, P.C. v Cincinnati Insurance Company , 20 F.4th 327 (7th Cir. 2021), where the Seventh Cir- cuit held as a matter of Illinois law that that the policy term “direct physical loss” required some “physical alteration to property” for coverage to apply. While the Court noted that shut-down orders during the pan- demic may have meant businesses’ “preferred use” of their premises was limited, their properties had
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