Bill Cosby's Insurer Has a Duty to Defend Him, Appeals Court Rules

Bill Cosby walks after it was announced a verdict - April 26, 2018 - Getty-H 2018
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AIG can't escape paying Bill Cosby's legal bills in a case where a number of women have accused him of defaming them through denials of sexual assault. On Thursday, the 1st Circuit Court of Appeals handed the embattled comedian a win.

David Souter, the former Supreme Court Associate Justice, quite notably writes the decision in favor of Cosby. As a retired justice, he gets to sit on lower appellate panels by designation and he just happens to help adjudicate a controversy concerning Cosby as the recently convicted entertainer makes his own move to the Supreme Court.

This present case concerns two insurance policies issued by AIG. One is a homeowners policy and the other is a personal excess liability policy. 

Both policies obligate AIG to cover personal injury damage, and "personal injury" is defined to include defamation, seemingly putting the insurer on the hook for the libel case brought by Tamara Green, Therese Serignese and Linda Traitz.

However, AIG points to an exception in the policies that bars coverage for liability or defense costs "aris[ing] out of any actual, alleged or threatened" sexual misconduct.

So Souter outlines the debate.

"Here, AIG says that because Cosby's allegedly defamatory denials were prompted by the women's sexual-assault allegations, the defamation injury and the excluded conduct are so 'inextricably intertwined' as to trigger the sexual-misconduct exclusions," he writes. "Cosby counters that the source of the women's claimed injuries is not any alleged sexual misconduct, but rather the allegedly defamatory statements...Given the independent cause of injury, Cosby maintains, the causal link between the excluded conduct and the defamation claims is too attenuated to trigger the exclusions."

Souter opines that this dispute doesn't "supply an easy answer," but ultimately agrees with the district court judge that the ambiguity means AIG should support its insured.

In the opinion (read here), he nods to other language in the policies — and its placement — "as imposing a standard closer along the continuum to proximate causation than but-for."

While the insurance dimension of #MeToo isn't likely foremost on anyone's mind but for specialists, Cosby isn't the only one accused of repeated sexual misconduct now in a battle with insurers. See Harvey Weinstein.

Cosby was represented by attorney Kirk Pasich.