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Lumbermens Mut. Casualty Co. v. Belleville Indus.

ELR Citation: 22 ELR 20101
Nos. No. 91-1129, 938 F.2d 1423/33 ERC 1536/(1st Cir., 07/16/1991)

The court holds that the "sudden and accidental" exception to the pollution exclusion clause in a comprehensive general liability insurance policy does not require an insurer to provide coverage of an insured manufacturing company's liability for environmental cleanup costs arising from ordinary business operations that involve ongoing pollution-releasing activity. After certifying to the Massachusetts Supreme Judicial Court the state law question of whether the "sudden and accidental" exception has a temporal element, the district court held that releases of water containing polychlorinated biphenyls (PCBs) at the manufacturing plant during a rainstorm and a fire were sudden and accidental when the PCB-bearing floodwater receded under and around a ground-level door before reaching the level where pumps and drainage ditches took over. On de novo review, the court holds that the PCB-floodwater releases during the rainstorm and fire do not qualify as "sudden and accidental" releases of pollutants. The court holds that the "sudden and accidental" exception should not be construed to provide coverage when the discharges consist of long accumulated, unattended, and unsegregated pollutants, and were caused by events not clearly beyond the long-range reasonable expectation of the insured. The court concludes that the district court's microanalysis of the means by which the PCBs were spread as a means of identifying "sudden and accidental" pollution is a failed attempt to distinguish between virtually indistinguishable occurrences. The court holds that the nature of an insured's enterprise and its historical operations determine the applicability of the "sudden and accidental" policy provision. The court holds that the insured's liability is attributable to gradual pollution, since the insured discharged pollutants as an ordinary part of its business operations.

[The Massachusetts Supreme Judicial Court's decision is published at 20 ELR 21454.]

Counsel for Defendant-Appellant
David A. McLaughlin
McLaughlin & Folan
P.O. Box A-2095, New Bedford MA 02741
(508) 992-9800

Counsel for Plaintiff-Appellee
T. Andrew Culbert
Drinker Biddle & Reath
47 Hulfish St., Ste. 400, Princeton NJ 08542
(609) 497-7053

Before Torruella, Circuit Judge, Coffin and Bownes, Senior Circuit Judges.