Payless Loses Coverage Bid Over Class Action Deal

Law360, New York (November 11, 2009, 3:33 PM EST) -- Despite some admittedly ambiguous grammar in an indemnity policy issued by The Travelers Cos. Inc., a federal appeals court has ruled that the insurer is not obligated to cover Payless Shoesource Inc.'s claims arising from a settled state class action over unpaid off-the-clock wages.

A three-judge panel for the U.S. Court of Appeals for the Tenth Circuit unanimously affirmed a district court decision in favor of Travelers on Tuesday, ruling that the language of an employment practices liability policy issued by Travelers to Payless could be...
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