United States Court of Appeals For the Seventh Circuit ____________________

No. 19-3052 ZURICH AMERICAN INSURANCE COMPANY, et al., Plaintiffs-Appellees,

v. OCWEN FINANCIAL CORPORATION, et al., Defendants-Appellants. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 17 C 2873 — Charles P. Kocoras, Judge. ____________________

ARGUED OCTOBER 26, 2020 — DECIDED MARCH 12, 2021 ____________________

Before EASTERBROOK, ROVNER, and WOOD, Circuit Judges. WOOD, Circuit Judge. Thanks to the diversity jurisdiction, federal courts are often asked to decide questions of insurance coverage; state law almost always provides the rule of deci- sion in such cases. This is one of them. Zurich American In- surance sold a policy to Ocwen Financial, a debt-collection company. After a disgruntled consumer sued Ocwen, it ten- dered the dispute to Zurich, but Zurich asserted that policy 2 No. 19-3052 exclusions relieved it of any duty to defend. Zurich then asked a federal court to decide whether this was indeed the case. The district court issued a judgment declaring that Zur- ich had no duty to defend Ocwen in the underlying litigation, and Ocwen has appealed. We agree with the district court’s reading of the policy and therefore affirm. I At the time this suit was filed, Ocwen was a limited liabil- ity company whose sole member was Ocwen Mortgage Ser- vicing, a company incorporated in the U.S. Virgin Islands with its principal place of business there. Zurich is incorpo- rated in New York and has its principal place of business in Illinois. Since the parties were of diverse citizenship and the amount in controversy exceeds $75,000, the district court had jurisdiction under 28 U.S.C. § 1332(a). Ocwen collects and services debts. In 2015, Tracy A. Beecroft sued Ocwen in federal court in Minnesota for its at- tempts to collect on a mortgage loan that Beecroft had dis- charged in bankruptcy. The bankruptcy discharge should have been the end of things, but it was not. To Beecroft’s dis- pleasure, Ocwen aggressively pursued her for this debt. The effects were traumatic for Beecroft: she suffered emotional and physical distress, including a stress-induced miscarriage, and she was later denied a mortgage because Ocwen wrongly reported the alleged default to credit agencies. Counts I through III of her complaint relied on the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protec- tion Act (TCPA); Count IV alleged common-law defamation; and Count V alleged common-law invasion of privacy. No. 19-3052 3

II From September 2010 to September 2016, Zurich insured Ocwen under a series of commercial general liability poli- cies—a type of policy that entitles the insured to indemnifica- tion for various types of tort claims brought against it. The policies were largely identical and covered all damages caused by both “bodily injury” and “personal and advertising injury.” But two provisions in the policies expressly excluded injuries resulting from conduct that violates certain laws. The first exclusion, for “Recording and Distribution of Ma- terial or Information in Violation of Law,” precludes coverage for bodily injury and personal and advertising injury: directly or indirectly arising out of or based upon any action or omission that violates or is alleged to violate: (1) The [TCPA] … (2) The CAN-SPAM Act of 2003 [Pub. L. No. 108-187] [and amendments] … (3) The Fair Credit Reporting Act [FCRA] … includ- ing the Fair