N.Y. insurer balks at coverage for laptop suit

A New York insurer is balking at the Lower Merion School District's request to cover costs arising from the lawsuit that has put a national spotlight on the district's laptop-tracking system.

In papers filed in federal court, Graphic Arts Mutual Insurance Co. contends that none of the allegations in the suit filed by Harriton High School sophomore Blake Robbins and his parents fits the definitions in the school district's $1 million liability policy.

The Robbins suit says the district invaded his privacy, violated his civil rights, and broke wiretapping and other laws when it secretly activated the Web camera on his school-issued laptop in the fall.

"Those allegations do not state any claims for 'bodily injury' or 'property damage' as those terms are defined in the policy," Graphic Arts Mutual said in its complaint, filed last week.

If the courts agree with the insurer, the impact could be costly for the Lower Merion district, which has hired lawyers from an elite Philadelphia law firm, Ballard Spahr L.L.P., and specialists from L3 Communications Corp., a computer forensics firm, to defend itself in the suit and to investigate the now-disabled laptop-tracking system.

In its complaint, Graphic Arts Mutual said the district had submitted the Robbins claim for "insurance coverage" under its policy. The New Hartford, N.Y., insurer "agrees to assist in the funding" of the district's defense in the case even as the firm awaits a court ruling on its request, the complaint said.

The company names as defendants the school board and district superintendent, plus Robbins and his parents, Michael and Holly.

Doug Young, a Lower Merion schools spokesman, declined Thursday to discuss details of the insurance dispute.

Lower Merion officials have acknowledged "significant mistakes" related to the use of the laptop security system, in which employees could remotely activate tiny cameras on student laptops, snapping photos of students, the insides of their homes, and whatever was on their laptop screens.

Both sides have signaled a willingness to settle the Robbins suit without a trial. Attorneys for Robbins' parents and School Board President David Ebby spent nearly four hours Wednesday in closed-door negotiations with a federal judge, but failed to reach an agreement.

The Robbinses' lawyer, Mark Haltzman, said Thursday that no new talks were likely until the family had seen all the evidence in the case. Haltzman said he could not comment on the insurance dispute because he had not yet seen the complaint.

Reached by phone, Bruce Morrison, an attorney for Graphic Arts Mutual Insurance, said he appreciated "the importance and interest" in the Web-cam case, but declined to comment on the lawsuit.

The district has disclosed that in about 80 instances since September 2008, its employees remotely switched on Web cams and tracking software on laptops the district had handed out to students at its two high schools. The system collected nearly 56,000 images, most from computers that had been reported lost or stolen.

Lower Merion officials also have conceded that, in some instances, the tracking continued for days or weeks after the computers had been recovered.

In those cases, the system captured and stored new photos and screen shots every 15 minutes while the laptops were turned on.

"Even though the images were not monitored by district employees, the system continued to operate, resulting in thousands of additional images," Ebby, the board president, and Superintendent Christopher McGinley wrote this week in a letter to parents. "There should have been a process in place that ensured staff knew when a laptop was found, and/or an automatic alert should have been provided to administrators so the tracking could be turned off."

Their five-page letter outlined the preliminary findings of a team of lawyers and computer experts hired by the district to investigate the matter. The district expects to release a full report and recommendations May 3.

Haltzman, the Robbinses' lawyer, has contended in a court motion that the laptop Blake brought home last fall snapped more than 400 Web-cam photos of the teen, including one as he slept in his Penn Valley home and another when he was shirtless. Robbins has said officials activated the tracking system on his computer because he failed to pay a $55 insurance fee for the laptop.

The Robbins suit says the family did not know the laptop camera had been activated until November, when an assistant principal at Harriton confronted Blake with a Web-cam photo that appeared to show him holding pills or drugs. The teen has said the objects in his hand were Mike & Ike candies.