BROADCASTS.com

b'

\\nKona Coffee Must be From the Big Island of Hawaii\\n\\nL&K Coffee claimed its various insurance companies erroneously \\ndenied coverage to defend it against a Lanham Act false-advertising \\nlawsuit brought by Hawaiian coffee growers. The district court concluded\\n the applicable insurance policies did not obligate a defense and \\nentered summary judgment in the insurance companies\' favor.\\n\\nIn L&K Coffee LLC, dba Magnum Roastery; Kevin Kihnke v. LM Insurance\\n Corporation; Liberty Insurance Corporation; Selective Way Insurance \\nCompany; Valley Forge Insurance Company; Continental Casualty Company, \\nNo. 22-1727, United States Court of Appeals, Sixth Circuit (June 1, \\n2023) the Sixth Circuit resolved the coverage dispute.\\n\\nFACTS\\n\\nL&K Coffee, LLC, a Michigan-based company, roasts and sells coffee \\nproducts throughout the United States. Defendants are insurance \\ncompanies from whom L&K purchased general commercial liability and \\numbrella insurance policies.\\n\\nCoffee growers from the Kona region of the Island of Hawai\'i sued \\nL&K and other coffee companies for "false designation of origin, \\nfalse advertising, and unfair competition" in violation of the Lanham \\nAct, 15 U.S.C. \\xa7 1125(a), in the Western District of Washington. These \\n"Kona Plaintiffs" alleged that the defendants falsely designated the \\norigin of the coffee they branded and distributed as "Kona" coffee "when\\n most of the coffee beans contained in the coffee products were sourced \\nfrom other regions of the world."\\n\\nThe Kona Plaintiffs\' operative complaint summarized their contentions as\\n to L&K as follows: "L&K falsely designates the geographic \\norigin of its "Kona" coffee products with the prominent placement of \\nKONA on the front of the packaging."\\n\\nANALYSIS\\n\\nThe duty of an insurance company to provide a defense depends upon the \\nallegations in the complaint and extends to allegations which even \\narguably come within the policy coverage. An insurer\'s duty to defend \\ndoes not depend solely upon the terminology used in a plaintiff\'s \\npleadings. Rather, it is necessary to focus on the basis for the injury \\nand not the nomenclature of the underlying claim in order to determine \\nwhether coverage exists.\\n\\nThe term "disparage" means an untrue statement directed towards \\nanother\'s property. A disparagement claim requires a company to make \\nfalse, derogatory, or disparaging communications about a competitor\'s \\nproduct." (emphasis in the opinion)\\n\\nThe Kona Plaintiffs alleged L&K violated the Lanham Act\'s \\nprohibition on false designation of one\'s own product. See 15 U.S.C. \\xa7 \\n1125(a)(1). The Sixth Circuit concluded that this is not \\n"disparagement."\\n\\n\\nZALMA OPINION\\n\\nIt never pays to lie to your customers. When doing so harms someone else\\n you are subject to damages from those your lie harms. By falsely \\ndesignating its product of "Kona" coffee when L&K claimed its cheap,\\n generic coffee was "Kona" Coffee it was involved in a tort that was not\\n covered by the policies of insurance.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.\\n\\nPlease tell your friends and colleagues about this blog and the videos \\nand let them subscribe to the blog and the videos.\\n\\nSubscribe and receive videos limited to subscribers of Excellence in \\nClaims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.\\n\\nConsider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808\\n\\nGo to Newsbreak.com\\xa0 https://www.newsbreak.com/@c/1653419?s=01\\n\\nBarry Zalma, Esq., CFE, is available at http://www.zalma.com and \\nzalma@zalma.com\\n\\nFollow me on LinkedIn: \\nwww.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257\\n\\n