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Vol.11 - Issue 2

February 28, 2022

New York Appellate Division Holds That Pollution Exclusions Bar Coverage For PFAS Claims
My colleagues at White and Williams discuss last month’s decision, in Tonoga, Incorporated v. New Hampshire Insurance Company, where the New York Appellate Division held that the “sudden and accidental” pollution exclusion and “absolute” pollution exclusion relieved two insurers of a duty to defend an insured-manufacturer in connection with claims alleging damages as a result of exposure to PFAS.

Court Addresses Whether Pizza Sauce Is Trade Dress?
At issue in Amco Insurance Co. v. Ledo’s Inc., No. 21C2972 (N.D. Ill. Feb. 4, 2022) was coverage for Ledo’s, Inc. for a suit captioned Ledo Pizza System, Inc. v. Ledo’s, Inc., pending in the Norther District of Illinois.  Based on that caption, you know right where this is going.

Ledo Pizza System, Inc. is a franchisor of pizza restaurants with over 100 locations and the owner of all kinds of Ledo-trademarks, not to mention having a secret sauce, proprietary ingredients and selling rectangular pizza.  Ledo’s, Inc., having no connection whatsoever to Ledo Pizza System, Inc., operates a pizza restaurant.  What could they have possibly been thinking? 

Ledo’s, Inc. was sued.  The case was obviously based on trademark infringement, which was not covered under its CGL policy.  In an effort to get coverage, Ledo’s argued that the suit alleged infringement of trade dress, which does fall within the definition of “personal and advertising injury.”

The court was not convinced: “Merely indicating that Ledo Pizza® has achieved a particular image and product quality does not amount to a claim that Ledo’s, Inc. has in some identifiable way infringed upon the ‘total image and overall appearance’ that would make up the trade dress for Ledo Pizza® or the related franchises (as opposed to infringement of Ledo Pizza® mark itself). Even grafting onto the complaint the additional allegations Ledo’s, Inc. relies on from the heavily redacted settlement letter, such as Ledo System’s and Ledo Carryouts’ proprietary rights in a particular Ledo Pizza® ‘sauce, [] cheese, thin crust,’ and presentation, the Court discerns no trade dress claim—in other words, the Court finds no allegation that Ledo’s, Inc. has appropriated those traits so as to cause conceivable customer confusion.”


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