Insurance Cos. Seek Declaration of No Duty to Defend Four Loko® Lawsuits

Two commercial liability insurance companies have filed a complaint against
Phusion Projects Inc., the company that makes Four Loko®, an alcoholic
beverage containing stimulants such as caffeine, guarana and taurine,
seeking a declaration that “they do not owe a duty to defend or indemnify”
the company in personal injury and wrongful death actions filed against it
in several states. The Netherlands Ins. Co. v. Phusion Projects Inc., No. 12-7968 (N.D. Ill., filed October 4, 2012).

The underlying complaints involve a California resident who was shot to
death by police after consuming the beverage and acting “in an irritated,
agitated, and disoriented manner”; a New York resident who sustained injuries
in an auto accident with a woman who had consumed the product and allegedly drove her car in a reckless manner; a New Jersey resident who died from a stabbing in an attack by a woman who had allegedly “imbibed Four
Loko”; a Pennsylvania resident who was run over after sitting on public transit
trolley tracks in a “highly intoxicated state”; and a Florida resident who sued a
Four Loko® distributor for the death of a son who was struck as an intoxicated
pedestrian by several cars.

Contending that their policies contain a liquor liability exclusion, the insurance
company plaintiffs note that the court previously absolved them of a
duty to defend in similar litigation involving other underlying Four Loko®
lawsuits. They claim that the previous determination “is preclusive of the same
issues in this case” because no claim asserted in the complaints discussed
above is “wholly independent of intoxication.”