Case Notes

Indemnification and Defense

In Louisiana, a claim under the LPLA may provide a vendor with indemnification and defense under the manufacturer's insurance policy. Weaver v. CCA Industries, Inc., No. 07-30597, United States Court of Appeals for the Fifth Circuit, May 27, 2008.

Weaver commenced an action to recover for injuries sustained from ingesting Permathene, a product marketed and sold by CCA Industries (CCA). Although Weaver did not assert a claim against Phoenix Laboratories (Phoenix), it was determined that Phoenix manufactured the product. Phoenix combined the component Permathene ingredients in its factory and then shipped the product in bulk to CCA, which packaged and labeled the product and marketed it for sale. CCA filed a third-party claim against Phoenix's insurer, New York Marine & General Insurance Company (New York Marine), for defense and indemnification of any damages it might have to pay Weaver. New York Marine denied coverage and the request for defense. After a hearing, the district court concluded that the policy issued by New York Marine to Phoenix provided no coverage to CCA and that New York Marine had no obligation to defend or indemnify CCA. The U.S. Court of Appeals for the Fifth Circuit reversed. It held that under Louisiana law, CCA qualified as an additional insured under the vendor's endorsement in the policy issued by New York Marine. It held that although the policy excluded vendors that have been found to be independently negligent, the claims asserted by Weaver included a strict liability claim under the Louisiana Product Liability Act (“LPLA”). Because CCA could be held liable under the LPLA as a manufacturer, Weaver's claim under the LPLA could hold CCA liable based upon strict liability for Phoenix's actions.

Indemnification and Defense

In Louisiana, a claim under the LPLA may provide a vendor with indemnification and defense under the manufacturer's insurance policy. Weaver v. CCA Industries, Inc., No. 07-30597, United States Court of Appeals for the Fifth Circuit, May 27, 2008.

Weaver commenced an action to recover for injuries sustained from ingesting Permathene, a product marketed and sold by CCA Industries (CCA). Although Weaver did not assert a claim against Phoenix Laboratories (Phoenix), it was determined that Phoenix manufactured the product. Phoenix combined the component Permathene ingredients in its factory and then shipped the product in bulk to CCA, which packaged and labeled the product and marketed it for sale. CCA filed a third-party claim against Phoenix's insurer, New York Marine & General Insurance Company (New York Marine), for defense and indemnification of any damages it might have to pay Weaver. New York Marine denied coverage and the request for defense. After a hearing, the district court concluded that the policy issued by New York Marine to Phoenix provided no coverage to CCA and that New York Marine had no obligation to defend or indemnify CCA. The U.S. Court of Appeals for the Fifth Circuit reversed. It held that under Louisiana law, CCA qualified as an additional insured under the vendor's endorsement in the policy issued by New York Marine. It held that although the policy excluded vendors that have been found to be independently negligent, the claims asserted by Weaver included a strict liability claim under the Louisiana Product Liability Act (“LPLA”). Because CCA could be held liable under the LPLA as a manufacturer, Weaver's claim under the LPLA could hold CCA liable based upon strict liability for Phoenix's actions.