The Pollution Exclusion Continues to be Examined Nationwide

The following two recent cases decided by the United States Court of Appeals from the Eighth and Fifth Circuits impact the analysis and application of the pollution exclusion nationwide.

Pollution Exclusion: Carbon Monoxide A Pollutant

The Eighth Circuit case of Travelers Property Casualty Co. of America v. Christopher A. Klick, No. 16-4000 (August 14, 2017), in the context of carbon monoxide poisoning exposure, held that the pollution exclusion applied and that the policies did not cover the injuries sustained. Even in light of the law that Minnesota Courts construe an insurance policy’s words of inclusion broadly and words of exclusion narrowly, the court — interpreting the language of the policy according to both plain, ordinary sense and what a reasonable person in the position of the insured would have understood the words to mean — held that the pollution exclusion applied. In reaching its decision, the court noted that while the parties agreed that carbon monoxide was a pollutant, the court had to consider whether the underlying plaintiff’s injuries arose out of the “release, dispersal, or migration” of carbon monoxide into the “atmosphere.” After an analysis of what the injured party was doing at the time of exposure, the court held that there was a release, dispersal, or migration of a pollutant into the atmosphere.

Pollution Exclusion: Asbestos A Pollutant

Longhorn Gasket & Supply Company v. Trinity Lloyd’s Insurance Company v. United States Fire Insurance Company, Fifth Circuit, Case No. 15-41625 (August 18, 2017), was an appeal from the U.S. District Court for the Eastern District of Texas, USDC No. 2:07-CV-399, where the Fifth Circuit Court of Appeals — in an unpublished decision — considered the application of the pollution exclusion in the context of an excess insurance policy involving asbestos related claims. The court vacated the District Court’s holding, in favor of the primary insurer, that required the excess insurer to cover various costs and expense relative underlying asbestos claims. Specifically, at issue was whether asbestos constitutes a pollutant and noted:

Neither this court nor the Texas Supreme Court has ever determined whether asbestos is a pollutant.

After considering the “ordinary everyday meaning of the words to the general public” contained in the excess policy and conducting a survey of the case law of various jurisdictions, the court stated that case law “seems to slightly favor treating asbestos as a pollutant” and held:

Through the case law is mixed, we conclude, under the plain language of the policy exclusion, that asbestos constitutes a pollutant and irritant.

For a National Overview of Pollution Exclusion Litigation please click here.