Seventh Circuit Finds That Insurers Not Responsible For Injuries Caused By Energy Drinks Mixed With Alcohol

May 1, 2014

When someone sues for injuries from a vehicle accident and there is alcohol involved, the shop that served the alcohol might also get sued. If the shop is liable, its insurance company might pay at least part of the outstanding claims. However, when it comes to energy drinks containing alcohol, insurance companies have resisted making payments — and the Seventh Circuit has supported them.

the-last-drop-1083566-m.jpgThe circumstances involving energy drinks are in some ways quite different from alcohol providers. Unlike alcohol providers, energy drink providers may have insurance carriers with a liquor liability exclusion. This becomes quite problematic for the energy drink providers because — not surprisingly — those who consume energy drinks with alcohol can become severely injured. In one recent case, Netherlands Ins. v. Phusion Projects, Inc., the company Phusion was a manufacturer and distributor of "Four Loko," a beverage that contained alcohol, caffeine, guarana, taurine, and wormwood. After one consumer drank it, he was unable to fall asleep for 30 hours and accidentally shot himself in the head. In another case, a passenger in a car was injured after the driver drank Four Loko and drove recklessly, at speeds above 100 miles per hour. In a third case, a consumer drank the beverage, had a fit of paranoia, and ran onto a busy highway, where he was struck and killed. Finally, in a fourth case, one consumer complained of heart problems after drinking Four Loko and blamed the beverage for his condition.

In all cases, there were lawsuits. Netherlands, the insurer, claimed that it was not required to compensate these cases due to the fact that there was a liquor exclusion. The Seventh Circuit ultimately agreed, finding that none of the tortious acts committed by Phusion were separate from the act of providing alcohol. Therefore, Phusion could not ask Netherlands to issue payouts for the accidents because of the alcohol exclusion. Phusion would be required to pay for the injuries itself.

While in some ways, this is just desserts for Phusion's carelessness, it is also a mixed blessing. At least if Phusion or another beverage manufacturer is well insured, the injured individuals will receive payments for their medical bills, pain and suffering, and/or loss of income. On the other hand, if Phusion must shoulder the burden itself, and there are dozens of personal injury lawsuits (including class action lawsuits), the company could end up filing for bankruptcy — which would automatically stop any lawsuits in progress, and might allow the company to evade most of its obligations. That would put countless unfortunate people in the spot of having to deal with the outcome of their accidents on their own. Hopefully most companies will be able to make the payments regardless. In any respect, it is yet another reason why energy drinks mixed with alcohol are a real danger.

Miller & Falkner is an Indiana and Kentucky plaintiffs law firm serving residents of Kentucky and Indiana. Located in Louisville, Kentucky, the firm provides representation in the areas of personal injury and employment law. If you need an Indiana or Kentucky personal injury attorney, contact us today for a free consultation.

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