(Article from Insurance Law Alert, March 2025)
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Holding
A California federal district court granted partial summary judgment to a liability insurer, ruling that injuries arising from a school shooting were not an “occurrence” under the policy and, therefore, the insurer had no duty to defend a suit against the manufacturer of gun accessories used in the shooting. James River Ins. Co. v. SureFire, LLC, No. 8:24-cv-01556 (C.D. Cal. Mar. 6, 2025).
Background
SureFire, a manufacturer and seller of firearm accessories, was sued by victims of a school shooting. According to the complaint, the shooting was “the foreseeable and entirely preventable result of a chain of events initiated by SureFire.” More specifically, the plaintiffs alleged that SureFire and other defendants “deceptively and unfairly marketed their assault rifles, rifle accessories, and ammunition in ways designed to appeal to the impulsive, risk-taking tendencies of civilian adolescent and post-adolescent males” and “this group’s propensities for violent behavior.” The suit asserted claims for common law negligence as well as violations of state false-advertising and consumer-protection statutes.
SureFire notified James River Insurance of the suits, which agreed to defend under a reservation of rights. James River Insurance then filed suit, seeking a declaration that it had no duty to defend or indemnify the underlying claims. The court granted James River Insurance’s motion for partial summary judgment.
Decision
James River Insurance’s duty to defend turned on whether the underlying claims alleged an “occurrence,” defined in the policy as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” As the court noted, California law requires that “the act itself” must have been accidental—“not the act’s consequences.” However, an accident may exist where “any aspect in the causal series of events leading to the injury or damage was unintended by the insured and a matter of fortuity.”
Applying this legal standard, the court concluded that the suits against SureFire did not allege a covered occurrence. The court explained that, despite the suits having alleged a negligence cause of action, the factual allegations concerned deliberate misconduct rather than accidental behavior. The court explained that allegations relating to SureFire’s negligent failure to implement basic protections regarding the sale of its products describe only deliberate marketing decisions, and not mistakes relating to its advertising activities.
The court rejected SureFire’s assertion that a duty to defend arose because an “unexpected, independent, and unforeseen happening”—i.e., the school shooting—constituted an occurrence, separate and apart from SureFire’s marketing campaign. SureFire argued that the shooting was not the “normal intent” of its marketing strategy and was not “functionally inevitable and entirely foreseeable.” The court disagreed, holding that the shooting was not an unforeseen or unexpected event, particularly given the underlying allegations that SureFire deliberately marketed its products to appeal to young men prone to violence.
Comments
Central to the court’s ruling was its reliance on decisions denying coverage for underlying opioid-related claims. See AIU Ins. Co. v. McKesson Corp., 2024 U.S. App. LEXIS 1806 (9th Cir. Jan. 26, 2024); Travelers Prop. Cas. Co. of Am. v. Actavis, Inc., 16 Cal. App. 5th 1026 (Cal. Ct. App. 2017). Likewise, in those cases, although the underlying complaints included negligence-based causes of action, the factual allegations described what the defendants “should have known” and thus “a foreseeable risk of harm” stemming from defendants’ marketing actions. As such, the courts in those cases concluded that the suits were based on intentional conduct and expected consequences—not an occurrence or accident—and that the insurers had no duty to defend.
These decisions reinforce the principle that causes of action for negligence do not necessarily constitute allegations of accidental conduct for purposes of establishing an “occurrence” under liability policies. A court must evaluate the factual allegations, not the labels of the causes of action, in order to determine an insurer’s duty to defend.