Up in Smoke: An Insurer Could Not Mount a Successful Coverage Defense Due to Vague Allegations in an E-Cigarette Lawsuit

An Illinois federal district court determined in Diamond State Insurance Company v. Duke that an insurer had a duty to defend its insured in a case involving alleged disparagement. This decision reminds insurers that courts have the ability to the allegations of the underlying complaint even more broadly than ever expected.

The underlying lawsuit was brought by, in pertinent part, DR Distributors, LLC against 21 Century Smoking, Inc. alleging, causes of action for counterfeiting and trademark infringement under the Lanham Act, unfair competition and unfair …

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