Netherlands Ins.. Co. v. Phusion Projects, Inc., No. 12-1355 (7th Cir. 2013)
Annotate this CasePhusion manufactures and distributes an alcoholic beverage called “Four Loko.” Its original formula contained energy stimulants, such as caffeine, guarana, taurine, and wormwood. Phusion purchased a commercial general liability insurance policy and a umbrella policy from members of the Liberty Mutual Group. The policies include identical provisions, excluding coverage for bodily injury or property damage when the insured may be held liable by reason of causing or contributing to intoxication. Plaintiffs sued Phusion in separate state court actions, alleging injuries caused by consumption of Four Loko. Two cases involved traffic accidents, one involved a shooting, another involved paranoid behavior resulting in accidental death, and a fifth claim involved a death from heart trouble. Phusion notified Liberty, which sought a declaratory judgment regarding the scope of coverage. The district court examined the underlying cases in the context of comparable automobile exclusions and ruled that four of the five cases fell within the Liquor Liability Exclusion. The Seventh Circuit affirmed. The Liquor Liability Exclusions in the policies are unambiguous and apply to Phusion. The allegations of simple negligence raised by the plaintiffs in the underlying complaints are not sufficiently independent from the allegations that Phusion caused or contributed to the intoxication of any person.
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