You’re On Your Own, Insurer Tells Phusion

CHICAGO (CN) - An insurance company says it has no duty to defend or indemnify Phusion Projects from several lawsuits concerning Four Loko, a caffeinated alcohol drink. Selective Insurance Company Of South Carolina cites several lawsuits from survivors of young people who died after drinking the stuff.

Defendants in the insurer's request for declaratory judgment include Phusion Projects, maker of Four Loko, and three of the company's top officers, Chris Hunter, Jeff Wright and Jaisen Freeman.

The 26-page federal complaint mentions previous lawsuits or anticipated lawsuits from nine families, some of them involving deaths, often of young people who drank the sugary, caffeinated booze.

The first such case, listed under the section "Nonjoinder of Certain Parties," is attached as Exhibit A. It involves the late Jason Keiran, who died Sept. 17, 2010, allegedly as a result of drinking Four Loko.

Jason's father, Joseph, says in the complaint that the 23.5 oz. can of Four Loko is 12% alcohol, contains as much alcohol as 5 to 6 12-oz. cans of beer, as much caffeine as two cups of coffee, and also contains wormwood, a banned ingredient of absinthe.

Jason accidentally shot himself in the head after drinking Four Loko, his father says. This complaint includes a letter from Sen. Charles Schumer, asking the FTC to investigate companies that promote caffeinated alcohol drinks, including Four Loko, by marketing them to look like "energy drinks."

Selective Insurance's complaint cites the nine previous lawsuits' claims that Four Loko is an inherently dangerous and defective product, "commonly known as 'Blackout in a Can,'" and that Phusion allegedly knew of the uses to which it would be put.

Citing another complaint, McCarroll v. Phusion Projects, also from Florida, the insurer says, "Phusion 'intended young people, including underage drinkers, to purchase and consume its products and in fact created labeling, colors, flavors, formulations and marketing plans with the intent and/or knowledge that it would be consumed by underage drinkers.'"

Selective Insurance wants out of its policy, citing a liquor liability exclusion and other exclusions. It is represented by David Wilford with Wilford Conrad of Barrington, Ill.

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