“Energy drinks,” a general category of drinks with high levels of stimulants like caffeine, taurine, and guarana, have been the subject of much scrutiny in recent years, as their excessive consumption has allegedly led to multiple injuries and deaths. Four Loko, an energy drink that also contains alcohol, has been especially controversial, earning the nickname “Blackout in a Can” among many college students. A series of lawsuits has alleged that the stimulants in the beverage mask the effects of the alcohol, leading to over-consumption, risky behavior, and in some cases, injury or death.
Two insurance companies, including one based in Indiana, have filed a federal lawsuit requesting a declaration that they are not obligated to defend or indemnify Four Loko’s manufacturer, Phusion Projects, in these lawsuits. The companies have reportedly already obtained a similar declaratory judgment, meaning that it may prove difficult for future claimants to recover damages from the beverage maker.
The mixture of caffeine and alcohol, according to doctors quoted by Fort Wayne’s WANE News, can pose serious health risks by concealing the depressive effect of the alcohol content and making the individual more likely to continue drinking. The person might not feel drunk because of the caffeine content, so the person is allegedly also more likely to engage in risky behaviors like driving.
The alcohol-containing Four Loko is difficult to obtain in Indiana. While the state has not banned it outright, many distributors and retailers have voluntarily refused to sell it to the public since 2010, after a number of high-profile cases of college students hospitalized after drinking a large amount of the beverage. The Indiana Association of Beverage Retailers, in a November 2010 letter, called on the Indiana Alcohol and Tobacco Commission to consider restricting or banning the sale of beverages that mix caffeine or similar stimulants with alcohol.
The present lawsuit, Netherlands Insurance v. Phusion Projects, involves a request by New Hampshire-based Netherlands Insurance Company and Indiana Insurance Company for a declaratory judgment regarding their obligations under commercial liability policies issued to Phusion. The policies cover bodily injury and property damage claims, but include “liquor liability” exceptions. These exclude coverage for injuries resulting from intoxication. The lawsuit seeks a declaratory judgment holding that five lawsuits pending in state courts around the country fall under the liquor liability exception to coverage. A prior suit brought by the two insurance companies, alleging similar facts, resulted in a January 2012 declaration that the companies had no duty to defend or indemnify Phusion.
The five underlying lawsuits are pending in state courts in California, Florida, New Jersey, New York, and Pennsylvania. Three are wrongful death suits alleging that consumption of Four Loko caused the decedents to engage in risky behavior resulting in their own deaths. Two of the decedents were struck and killed by vehicles. The third allegedly became delusional and paranoid after consuming the beverage, and was shot and killed by police. A fourth case alleges that the decedent was stabbed to death by a person who had consumed the beverage. The fifth case claims damages for non-fatal injuries sustained in a car accident with someone allegedly under the beverage’s influence.
The personal injury attorneys at Parr Richey Frandsen Patterson Kruse represent the interests of Indiana accident victims and their families, helping them to obtain compensation for their damages. To schedule a free and confidential consultation with one of our lawyers, contact us today online or at (888) 532-7766.
Letter from the Indiana Association of Beverage Retailers to the Indiana Alcohol and Tobacco Commission (PDF file), November 10, 2010 (source)
Complaint for Declaratory Judgment (28 USC 2201, et seq.) (PDF file), Case No. 1:12-cv-07968, The Netherlands Insurance Company, et al v. Phusion Projects, Inc., et al, U.S. District Court for the Northern District of Illinois, Eastern Division, October 4, 2012
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