Insurer Sues eBay, Ex-Execs Over $55.7M Cyberstalking Settlement, Claims Deal Was Made Without Consent
eBay and three former executives are being sued by an insurance company seeking to avoid paying for the $55.7 million stalking settlement with EcommerceBytes publishers Ina and David Steiner, alleging the defendants withheld information, conducted settlement negotiations without adequate notice and finalized the agreement without the insurer's consent.
ACE Property & Casualty Insurance filed the new lawsuit November 12 in the Northern District of California against eBay, former CEO Devin Wenig, former Chief Communications Officer Steve Wymer and former SVP Global Operations Wendy Jones, arguing that the 2019 harassment campaign carried out by eBay security personnel was intentional conduct excluded from its insurance policy. The insurance company is also accusing the defendants of breach of contract and is seeking damages related to the settlement, in addition to a court ruling releasing it from coverage obligations.
The insurer previously sued eBay, Wenig and Wymer in November 2022, arguing that its commercial umbrella liability policies did not cover losses arising from criminal acts or willful violations of another person's rights. That case was voluntarily dismissed without prejudice in May 2023 after the defendants sought to delay the insurance dispute until the Steiners' civil lawsuit was resolved.
The new complaint renews those arguments following the July 2026 settlement, adds Jones as a defendant and makes new allegations about how eBay and its former executives handled the negotiations that ultimately brought the civil lawsuit to an end.
Liz Morton
ACE says eBay notified the insurer of the Steiners' lawsuit and sought coverage under its $50 million umbrella policy, but the defendants failed to provide requested information and conducted settlement negotiations without adequately informing ACE, including offers that exceeded underlying insurance limits and could trigger its coverage. In February 2026, the defendants requested ACE's consent or a waiver to settle, but the insurer alleges it still lacked sufficient information to evaluate the remaining claims and proposed terms when the parties reached an agreement in principle on February 24.
That agreement subsequently fell apart over disputes about the written terms, prompting the Steiners to ask the court to reopen the case in June and putting eBay and the former executives back on a path toward trial in January 2027. While the parties eventually reached a final agreement in July, ACE says the defendants still failed to provide the proposed settlement for review or obtain the insurer's approval.
At no point before executing the settlement did the Defendants share the proposed settlement agreement with ACE or provide ACE with information sufficient to evaluate the reasonableness of the proposed settlement terms. ACE did not consent to, or waive its right to consent to, the settlement.
The complaint says eBay's attorneys informed ACE on July 15 that the settlement had been finalized, twelve days before the civil lawsuit was dismissed. ACE is now seeking damages for alleged breaches of the insurance contract, including potentially the amount of the settlement reached without its approval.
ACE also objects to the agreement's failure to allocate payments among the Steiners' various legal claims or distinguish between compensatory and punitive damages, distinctions that could determine whether some or all of the settlement falls within the policy's coverage. The insurer is separately questioning coverage for the $7 million in charitable contributions included in the settlement.
The complaint further argues that the Steiners were seeking damages for emotional distress rather than bodily injury or property damage at the time of settlement, asking the court to determine whether any portion should be allocated to those categories.
The August 2025 summary judgment ruling allowed both negligence and intentional misconduct claims to proceed against eBay and the former executives, but ACE maintains the resulting injuries were expected or intended and therefore excluded under the policy, also citing California Insurance Code Section 533, which prohibits coverage for losses caused by an insured's willful acts.
ACE points to evidence that eBay's highest-ranking executives were involved in directing efforts to silence the Steiners, including Wenig's August 2019 instruction to Wymer that it was time to "take her down" and Wymer's subsequent communications with security chief Jim Baugh promising support from the top.
The criminal campaign targeted the Steiners over their reporting on eBay at EcommerceBytes and sought to identify Fidomaster/unsuckEBAY, an anonymous source and commenter who had also drawn the ire of senior company executives. The harassment included online threats, disturbing deliveries to the Steiners' home, in-person stalking and surveillance, and an attempt to place a GPS tracker on their vehicle.
Seven former eBay security employees and contractors pleaded guilty to crimes connected to the harassment, while eBay entered into a deferred prosecution agreement with the Department of Justice in January 2024, accepting responsibility for six felony offenses, paying a $3 million penalty and agreeing to three years of enhanced compliance monitoring.
ACE cites those executive communications as evidence that the misconduct was intentional and therefore excluded from insurance coverage:
These were not the acts of a few "rogue" managers. These were the acts of the people running and controlling eBay's operations—the people, as Wymer described it, at the "top."
ACE also objects to admissions eBay made without the insurer's consent in its January 2024 answer to the Steiners' civil lawsuit, including its acknowledgment that inappropriate communications by executives who were not criminally charged contributed to an "unacceptable tone from the top." Those admissions came immediately after eBay entered a deferred prosecution agreement requiring the company to accept responsibility for the criminal conduct detailed in the government's statement of facts and prohibiting it from subsequently contradicting that account.
The final $55.7 million settlement included $48.7 million in compensation for the Steiners, with eBay contributing $46.15 million, Wenig $2 million, Jones $500,000 and Wymer $50,000. Another $7 million was allocated to charitable contributions, including $6 million from eBay and $1 million from Wenig to a charity supporting First Amendment rights, with his donation made in Ina Steiner's name.
Separate from ACE's insurance dispute, the publicly attributed settlement contributions don't establish whether eBay also paid the former executives' legal expenses or reimbursed any of their settlement payments. Wenig's September 2019 separation agreement, negotiated after eBay had already begun investigating the criminal harassment, included provisions addressing both legal expenses and indemnification.
Section 11 required Wenig to use reasonable efforts to assist eBay in ongoing or future investigations and legal proceedings, with reimbursement for reasonable expenses and attorneys' fees incurred in providing that assistance. Section 13 separately preserved his existing rights to "indemnification and/or mandatory advancement of expenses" under eBay's bylaws, applicable law, insurance policies and individual agreements, including the company's Directors and Officers Liability Insurance policy. Neither provision establishes whether eBay actually paid Wenig's defense costs or reimbursed his settlement contribution, and it's unclear whether Wymer and Jones had comparable protections.
Wenig departed with a compensation package worth approximately $57 million, including more than $40 million in severance benefits, despite eBay and its Board already being aware of the stalking incident and investigation. His separation agreement preserved the company's right to pursue clawbacks, but court records revealed the Board discussed recovering compensation and ultimately decided not to proceed.
Jones remained with eBay until December 2020, leaving with more than $11 million in severance, while Wymer was fired for cause in September 2019 but later reached a settlement of disputed employment claims under which eBay paid him $1.25 million and his legal counsel another $150,000.
Liz Morton
The defendants have not yet responded to the new complaint, and it remains unclear whether eBay separately paid or reimbursed any of the former executives' legal expenses or settlement contributions.
The case is ACE Property & Casualty Insurance Company v. eBay Inc., et al., No. 5:26-cv-13662, in the U.S. District Court for the Northern District of California.
Download full initial complaint:
