FILED 

U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 April 29, 2004 

 THOMAS K. KAHN 

 CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 03-14720

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D. C. Docket No. 01-02236-CV-AJ

TAURUS HOLDINGS, INC., 

TAURUS INTERNATIONAL MANUFACTURING, INC., 

Plaintiffs-Appellants, 

versus 

UNITED STATES FIDELITY AND GUARANTY COMPANY, 

PACIFIC INSURANCE COMPANY, LIMITED, 

FEDERAL INSURANCE COMPANY, 

GREAT NORTHERN INSURANCE COMPANY, 

UNITED NATIONAL INSURANCE COMPANY, 

FIREMAN'S FUND INS., 

Defendants-Appellees, 

NAUTILUS INSURANCE COMPANY, 

Defendant. 

________________________

Appeal from the United States District Court

for the Southern District of Florida

_________________________

(April 29, 2004)
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Before ANDERSON, CARNES and FAY, Circuit Judges.

PER CURIAM:

Certification from The United States Court of Appeals for the Eleventh

Circuit to the Supreme Court of Florida, pursuant to Article V, section 3(b)(6) of

the Florida Constitution.

Plaintiffs-Appellants Taurus Holdings, Inc. and Taurus International

Manufacturing, Inc. (collectively “Taurus”) appeal a final judgment in favor of

Defendants-Appellees United States Fidelity and Guaranty Company, Pacific

Insurance Company, Limited, Federal Insurance Company, Great Northern

Insurance Company, and United National Insurance Company (collectively

“Insurance Providers”). Taurus filed suit against Insurance Providers, seeking,

among other things, a declaratory judgment that insurance policies issued by

Insurance Providers required them to contribute to the defense costs of about 30

lawsuits pending against Taurus. The district court found that the “productscompleted operations hazard” provision contained in these insurance policies

excluded coverage for defense of these lawsuits and dismissed Taurus’ complaint. 

Because we find that this case turns on an important question of state law for

which there is no controlling precedent, we defer our decision pending certification

of the question to the Supreme Court of Florida.
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BACKGROUND

Taurus is in the business of manufacturing, selling, and distributing firearms. 

Government municipalities have sued Taurus and other handgun manufacturers

seeking compensation for expenses allegedly incurred as a result of gun violence in

their communities. These suits allege, among other things, negligence, negligent

supervision, negligent marketing, negligent distribution, negligent advertising,

negligent entrustment, public and private nuisance, failure to warn, false

advertising, and unfair and deceptive trade practices. As a result of Taurus’

actions, the municipalities claim they have spent substantial sums of money toward

police operations, emergency medical costs, and legal prosecutions relating to gun

violence and crimes committed involving handguns. Although most of these

lawsuits seek compensatory damages, some request only equitable relief. When

Taurus initiated this suit against Insurance Providers, Taurus had already notified

them of about 30 such lawsuits pending against it.

Insurance Providers issued commercial general liability insurance policies to

Taurus between the years 1991 and 1999. Under these policies, Insurance

Providers have the duty to defend Taurus against lawsuits seeking damages for

bodily injury, property damage, advertising injury, or personal injury. These

policies, however, do not afford coverage for damages included within the
Although the described policy provisions are taken from Defendant Federal Insurance

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Company’s policy, the language of the pertinent provisions are substantially the same for all of

the applicable insurance policies at issue in this appeal.

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“products-completed operations hazard” provision. The Federal Insurance

Company policy defines a products-completed operations hazard as follows: 1

[A]ll bodily injury and property damage occurring

away from premises you own or rent and arising out of

your product or your work except:

a. products that are still in your physical

possession; or

b. work that has not yet been completed or

abandoned.

The policy then defines “your product” as follows:

[A]ny goods or products, other than real property,

manufactured, sold, handled, distributed or disposed of

by:

1. you;

2. others trading under your name; or

3. a person or organization whose business or assets

you have acquired.

The question presented in this appeal is whether the products-completed operations

hazard exclusion applies to the lawsuits pending against Taurus. Insurance

Providers argue that the injuries complained of in the underlying suits arose out of

Taurus’ products – handguns – and therefore the products-completed operations

hazard provision excludes coverage. Taurus, however, contends that because at

least one claim in each of the underlying suits alleges injuries caused by Taurus’
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on-premises tortious conduct (i.e. negligent marketing, negligent distribution,

failure to warn, false advertising, unfair and deceptive trade practices...), the

exclusion does not preclude coverage. 

Initially, the district court concluded that because the underlying suits allege

that injuries were caused by Taurus’ tortious business practices and because the

“arising out of” language in the products-completed operations hazard provision

was ambiguous under Florida law, the exclusion did not apply. However, in

response to Insurance Providers’ motion for reconsideration, the district court set

aside its initial determination and found that (1) the products-completed operations

hazard exclusion was not ambiguous and (2) the injuries alleged in the lawsuits

against Taurus arose out of Taurus’ handguns and not out of its on-premises

negligence. Accordingly, the district court concluded that the plain language of the

products-completed operations hazard exclusion did not afford coverage for the

lawsuits against Taurus and dismissed the complaint. This appeal followed.

DISCUSSION

In reaching its decision, the district court relied on Koikos v. Travelers Ins.

Co., 849 So. 2d 263 (Fla. 2003), a case recently decided by the Supreme Court of

Florida. Koikos involved a shooting at a restaurant where two patrons were shot by

one gunman. 849 So. 2d at 265. In the underlying suit, the victims alleged that the
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restaurant owner negligently failed to provide adequate security. Id. The

restaurant owner then sued the insurance company, claiming the two shootings

constituted two occurrences under the applicable insurance policy. Id. The

insurance company, however, contended that there was only a single occurrence –

the failure to provide adequate security. Id. The Supreme Court of Florida,

applying the “cause theory,” discussed the following:

It is the act that causes the damage, which is neither

expected nor intended from the standpoint of the insured,

that constitutes the “occurrence.” The insured’s alleged

negligence is not the “occurrence”; the insured’s alleged

negligence is the basis upon which the insured is being

sued by the injured party.

Id. at 271. Thus, there were two “occurrences” – the two shootings.

Although Koikos is not a case about products-completed operations hazard

exclusions, the district court found that the Supreme Court of Florida’s discussion

on insurance occurrences eliminated any perceived ambiguity in the phrase

“arising out of.” The district court noted the Koikos court found that the shootings,

not the alleged negligent failure to provide security, “gave rise to” the injuries in

that case. Applying this analysis to the present case, the district court concluded

the Koikos decision indicated that the Supreme Court of Florida would find the

injuries alleged in the lawsuits against Taurus arose out of Taurus’ handguns and

not out of its on-premises negligence.
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While the district court did its best to predict how the Supreme Court of

Florida would interpret the products-completed operations hazard provision, it is

after all only a guess. We must consider that the Koikos court was interpreting the

“cause theory” as it applies to determining the number of covered occurrences in

an insurance policy. And although the underlying issue now before this Court may

be analogous, it is certainly not the same; this case is about defining an entirely

different insurance provision – the products-completed operations hazard

exclusion.

Taurus, on the other hand, contends that Fla. Farm Bureau Mut. Ins. Co. v.

Gaskins, 405 So. 2d 1013 (Fla. 1st DCA 1981) is controlling here. Gaskins is a

Florida First District Court of Appeal case dealing directly with the productscompleted operations hazard provision. In Gaskins, a chemical supply distributor,

Gaskins, delivered an herbicide instead of the proper insecticide to one of his

customers. 405 So. 2d at 1013. The customer, a farmer, used the herbicide on his

tobacco crop and the entire crop was destroyed. Id. Gaskins sought coverage for

the subsequent claim against him from his insurance company. Id. at 1013-14. 

The insurance company argued that the product hazard and completed operations

provisions of the applicable insurance policy precluded coverage because the

liability arose off-premises and out of Gaskins’ product. Id. at 1014. The First
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District concluded that the exclusions were not applicable because “liability arose

out of [Gaskins’] on-premises negligence in delivering the wrong product to [the

farmer] and not out of the product delivered.” Id.

Taurus asserts that Gaskins stands for the proposition that productscompleted operations hazard exclusions apply only to claims of injury from

defective products. However, while the cases Taurus relies upon do indicate that

defective products are contemplated by these provisions, no case Taurus cites to

makes the assertion that the products-completed operations hazard exclusion is

limited in application to defective products. See Fla. Farm Bureau Mut. Ins. Co. v.

James, 608 So. 2d 931 (Fla. 4th DCA 1992); Associated Elec. & Gas Ins. Servs.,

Ltd. v. Houston Oil & Gas Co., 552 So. 2d 1110 (Fla. 3d DCA 1989); Gaskins, 405

So. 2d at 1014. In fact, these cases seem to discuss Gaskins within the confines of

its specific facts – that the products-completed operations hazard exclusion does

not apply to the negligent delivery of the wrong product. See James, 608 So. 2d at

932 (noting the insurance company’s liability in Gaskins arose out of the negligent

delivery of the wrong product); Associated Elec. & Gas Ins. Servs., Ltd., 552 So.

2d at 1112 (noting the negligence in Gaskins arose from a service wholly unrelated

to the product).
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CONCLUSION

In our view, neither the Koikos nor Gaskins decisions compel a particular

decision as to whether the products-completed operations hazard exclusion applies

to the lawsuits pending against Taurus. We recognize there is a significant amount

of litigation in this area that affects the substantial rights of both individuals and

corporations. This is an area entirely controlled by state law and so it is only

proper to allow Florida’s highest court decide the issue. Accordingly, we certify

the following question to the Supreme Court of Florida:

DOES A “PRODUCTS-COMPLETED OPERATIONS

HAZARD” EXCLUSION IN A COMMERCIAL

GENERAL LIABILITY POLICY OF INSURANCE

BAR COVERAGE AND THEREFORE ELIMINATE

AN INSURER’S DUTY TO DEFEND THE INSURED

GUN MANUFACTURER IN SUITS ALLEGING

NEGLIGENCE, NEGLIGENT SUPERVISION,

NEGLIGENT MARKETING, NEGLIGENT

DISTRIBUTION, NEGLIGENT ADVERTISING,

NEGLIGENT ENTRUSTMENT, PUBLIC AND

PRIVATE NUISANCE, FAILURE TO WARN, FALSE

ADVERTISING, AND UNFAIR AND DECEPTIVE

TRADE PRACTICES BASED ON THE INSURED’S

ON-PREMISES BUSINESS PRACTICES. 

The phrasing of this question is not intended to limit the Supreme Court of

Florida’s consideration of the issues involved or the manner in which it gives its

answer. The record in this case, as well as copies of the parties’ briefs shall be

transmitted to the Supreme Court of Florida to assist the court in answering this
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question.

QUESTION CERTIFIED.