There was another significant case last month involving insurance coverage issues. In that case, two Liberty Mutual Insurance Co. units and the makers of caffeinated malt liquor beverage Four Loko have reached a settlement that will resolve ongoing litigation. This settlement, which is confidential, ends a second lawsuit over five deadly incidents. Netherlands Insurance Co. and Indiana Insurance Co., units of Liberty Mutual, were seeking the court’s approval for their refusal to represent Four Loko’s Phusion Projects Inc. in its defense in five underlying lawsuits.
The insurers were trying to avoid representing Phusion in these lawsuits, which involved deaths allegedly caused by the company’s product. Liberty Prudential had sued Phusion in early 2011 to avoid covering a different series of Four Loko-related fatalities. The company introduced Four Loko onto the market in 2005 in an attempt to capitalize on the popularity in college bars of mixing alcoholic beverages with energy drinks. It was alleged in one underlying complaint that the product’s combination of alcohol and stimulants could dangerously reduce a person’s ability to notice the symptoms of intoxication.
Four Loko, which is sold in cans, originally had 12 percent alcohol by volume, about as much as a medium-sized glass of wine, and as much caffeine as two cups of coffee. The company had announced in November 2010 that it would remove caffeine from the beverage in response to public outcry and pressure from regulators. The underlying lawsuits allege that the drink’s allegedly dangerous combination of alcohol and caffeine caused agitation and disorientation in those who consumed it and ultimately led to reckless behavior, which could result in deaths.
The Seventh Circuit in December said that a liquor liability exclusion applied and that the Liberty Mutual units had no obligation to defend the Four Loko maker in the pending lawsuits blaming the caffeinated alcoholic beverage for injury and death. In that ruling, the appeals court panel found that the underlying suits did not accuse Phusion of any “tortious conduct divorced from the act of furnishing alcohol and so fell squarely within the policy exclusion for lawsuits alleging injury from intoxication.” The settlement reached will resolve all of the claims and will end all of the pending litigation.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.