Responsible for Pollution? Even With the Armor of the Absolute Pollution Exclusion, Insurers May Not Be Bulletproof

Amy R. Wolverton

Editors' Summary: In an attempt to reduce their liability for environmental claims, insurers regularly include absolute pollution exclusion clauses in their comprehensive general liability policies. Courts, however, have entertained a variety of challenges to absolute pollution exclusions. This Article discusses seven arguments that insureds have made to obtain coverage despite the existence of an absolute pollution exclusion in their policy. These arguments include: (1) the insured was not an active, industrial, or knowing polluter; (2) the substance at issue is not a pollutant; (3) no invasion of the environment has occurred; (4) no discharge or release has occurred; (5) the alleged contaminant is not waste; (6) the underlying claim is a product liability claim for which the policy provides coverage; and (7) the underlying claim is covered by the policy's personal injury provisions. The applicability and success of each of these arguments depends largely on the specific facts of each case. Although most courts find that the absolute pollution exclusion precludes coverage, this Article concludes that the absolute pollution exclusion is not always absolute.

Amy R. Wolverton, an associate of Alston & Bird, LLP, in Atlanta, Georgia, concentrates on environmental and regulatory matters as a member of the firm's environmental practice group. She received her J.D. summa cum laude from Georgia State University College of Law in 1995, and a B.A. with distinction from Indiana University in 1992. The author would like to thank Adam Beigel for his contribution to certain sections of this Article. An earlier version of this Article, entitled Circumventing the Absolute Pollution Exclusion, appeared in 20 INS. LITIG. REP. 244 (1998).

[28 ELR 10405]

Litigation and debate between insurers and insureds regarding coverage for environmental claims is certain to continue. Despite the efforts of the insurance industry to seriously curtail exposure for environmental liability through the use of pollution exclusions, insurers have not been able to find "absolute" protection from such liability. Although most courts find the so-called absolute pollution exclusion unambiguous and, thus, preclusive of coverage, it has been subject to numerous interpretations, some of which allow insureds to argue that the exclusion does not preclude coverage.

This Article discusses some of the potential arguments that insureds can make to obtain coverage despite the existence of an absolute pollution exclusion in their general liability policies, including the following:

(1) The insured's conduct does not fall within the scope of the absolute pollution exclusion because the insured was not an active, industrial, or knowing polluter;

(2) The substance at issue is not a "pollutant";

(3) No invasion of the "environment" has occurred;

(4) No "discharge or release" has occurred;

(5) The alleged contaminant is not "waste";

(6) The underlying claim is a product liability claim for which the policy provides coverage; and

(7) The personal injury provisions of the policy afford coverage for the underlying claims.

Background

Absolute pollution exclusion clauses represent the most recent attempt by the insurance industry to limit liability for environmental claims. Beginning in the early 1970s, as claims for pollution-related incidents increased, insurers included standard provisions in their comprehensive general liability (CGL) policies stating that they would not cover:

[B]odily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acid, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water, but this exclusion does not apply if such discharge, dispersal, release or escape is sudden or accidental.¹

Contrary to the insurers' goals, courts did not uniformly or narrowly interpret this pollution exclusion clause, particularly [28 ELR 10406] the "sudden and accidental" provision.² Consequently, as environmental claims continued to proliferate and statutes expanded environmental liability, insurers began using the "absolute pollution exclusion" clause as a standard policy element in 1986.³ Insurers omitted the "sudden and accidental" exception from the clause, added more specific definitions, and expanded the standard language to cover more environmental contexts.⁴

Absolute pollution exclusion clauses generally provide as follows:

1. This insurance does not apply to:

f.(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:

(a) At or from premises you own, rent or occupy;

(b) At or from any site or location used by or for you or others for the handling, storage, disposal, processing or treatment of waste;

(c) Which are at any time, transported, handled, stored, treated, disposed of, or processed as waste by or for you or any person or organization for whom you may be legally responsible; or

(d) At or from any site or location on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations:

(i) If the pollutants are brought on or to the site or location in connection with such operations; or

(ii) If the operations are to test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize the pollutants.

(2) Any loss, cost, or expense arising out of any governmental direction or request that you test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize pollutants.

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.⁵

Despite this attempt by insurers to reduce their liability, courts have continued to entertain challenges to absolute pollution exclusions based on the facts of each case. As before, insureds seeking coverage typically attempt to establish ambiguities in the clause in order to benefit from a presumption in their favor recognized in most states.⁶ In addition, insureds continue to attack the scope of the language and specific terms in the clause. Thus, the pollution exclusion clause continues to be a prolific source of litigation and reported case law.⁷

Argument 1: The Insured's Conduct Does Not Fall Within the Absolute Pollution Exclusion Because the Insured Was Not an Active, Industrial, or Knowing Polluter

A few courts have held that absolute pollution exclusions in insurance policies were intended only for active or industrial polluters, or for those who knowingly polluted the environment. For instance, in Minerva Enterprises, Inc. v. Bituminous Casualty Corp.,⁸ while considering potential coverage for a mobile home flooded with sewage from a mobile home park's septic system, the Arkansas Supreme Court found the pollution exclusion to be ambiguous at a minimum. The court held that the absolute pollution exclusion in a general liability policy was intended to "prevent persistent polluters from getting insurance coverage for general polluting activities … and was never intended to cover those who are not active polluters but had merely caused isolated damage by something that could otherwise be classified as a 'contaminant' or 'waste.'"⁹ Likewise, in Thompson v. Temple, a Louisiana court held that "pollution exclusion clauses are intended to exclude coverage for active industrial polluters, when businesses knowingly emit pollutants over extended periods of time."¹⁰

Absence of industrial environmental pollution was also the basis for permitting coverage for exposure to lead paint and for a release of carbon monoxide (CO) from a malfunctioning heater.¹¹ In Regional Bank of Colorado v. St. Paul Fire & Marine Insurance Co.,¹² the Tenth Circuit noted that a person of ordinary intelligence would not reasonably characterize CO emitted from a residential heater as pollution although the same person might well understand that CO could be a pollutant when emitted in an industrial or environmental setting.

In line with the foregoing case law, Louisiana's Insurance Commissioner recently issued guidelines limiting the applicability of absolute pollution exclusions to claims involving significant discharges of industrial pollutants that result in environmental damage.¹³ The state of Louisiana may take administrative action against insurance companies if they continue to use the absolute pollution exclusion to deny a policyholder's claim absent significant discharge of industrial pollutants.¹⁴

[28 ELR 10407]

Most jurisdictions, however, reject the argument that only active, industrial, or knowing pollutants are subject to pollution exclusion clauses. For example, in Bernhardt v. Hartford Fire Insurance Co.,¹⁵ a court dismissed suggestions that only large-scale, continuous polluters should be subject to the exclusion and applied it to claims stemming from the escape of CO in an apartment building. "[W]e are required to state the obvious — nowhere in this exclusion does the word 'industry' or 'industrial' appear," the court said, adding that it was "hard pressed" to believe insurers would intend such a limitation in nonindustrial and residential policies.¹⁶ Moreover, the court held that the clause "draws no distinction between intentional and nonintentional discharge[s] of pollutants; nor does it in any manner suggest that only chronic emission of the defined pollutants is excluded from coverage."¹⁷

Similarly, reasoning that the pollution exclusion was clear and unambiguous, the Supreme Court of Florida refused to limit the application of the pollution exclusion to only environmental or industrial pollution.¹⁸ While also declining to apply the doctrine of "reasonable expectations," the court found that the absolute pollution exclusion precluded coverage for injuries caused by an ammonia spill from a blueprint machine and for bodily injuries from insecticide overspray.¹⁹

Most courts addressing the issue have also rejected the "active" versus "passive" polluter distinction.²⁰ For instance, in Economy Preferred Insurance Co. v. Grandadam,²¹ the court denied coverage for an in-home mercury spill and noted that the word "escape" implies passivity and does not require active pollution. More emphatically, the court in U.S. Fidelity & Guaranty Co. v. Murray Ohio Manufacturing Co. refused to "rewrite the common sense meaning of [the insurance contract's] terms in the name of public policy" arguments about active versus passive pollution involving hazardous waste disposal.²²

In addition to the foregoing reasons, some courts criticize the use of the active/industrial argument outside of New York because New York's legislature provided unique grounds for interpreting the clause's intent by statutorily requiring it in all insurance contracts between 1972 and 1981.²³ Moreover, the active/industrial polluter doctrine did not even achieve universal support in New York where the argument originated.²⁴

(NEWLINE)

Argument 2: The Substance at Issue Is Not a "Pollutant"

Insureds have frequently argued that the substance that caused damage to a claimant does not constitute a "pollutant" within the meaning of the exclusion. In response, courts have avoided classification as a pollutant for varying reasons: (1) common sense dictates that the substance is not a pollutant; (2) the substance was a useful product; and (3) the definition of pollutant is ambiguous. An insured's success with these arguments often turns on the peculiar facts of each case.

Common Sense Approach

In determining whether a substance is a "pollutant," many courts have taken a common sense approach, because

[w]ithout some limiting principle, the pollution exclusion clause would extend far beyond its intended scope, and lead to some absurd results. To take but two simple examples, reading the clause broadly would bar coverage for bodily injuries suffered by one who slips and falls on the spilled contents of a bottle of Drano, and for bodily injury caused by an allergic reaction to chlorine in a public pool. Although Drano and chlorine are both irritants or contaminants that cause, under certain conditions, bodily injury or property damage, one would not ordinarily characterize these events as pollution.²⁵

In analyzing the definition of pollutant, the Seventh Circuit noted that "[t]he terms 'irritant' and 'contaminant,' when viewed in isolation, are virtually boundless, for 'there is virtually no substance or chemical in existence that would not irritate or damage some person or property.'"²⁶ Also applying [28 ELR 10408] a "common sense rationale," an Oregon court held that a "sudden and accidental" pollution exclusion did not bar coverage for paint damage to vehicles that occurred during the spray painting of a bridge, reasoning that paint is not generally thought of as a contaminant or pollutant.²⁷

The court in Westchester Fire Insurance Co. v. City of Pittsburg, Kansas²⁸ went one step beyond general public perception of pollutants and held that the pollution exclusion did not bar coverage for injuries arising from an individual's ingestion of malathion during a municipal pesticide-spraying operation because malathion is not recognized as a pollutant by industry or government regulators.

Alternatively, courts narrowly interpret the definition of pollutants to exclude certain substances and, therefore, find coverage despite an absolute pollution clause. For instance, in Titan Holdings Syndicate, Inc. v. City of Keene, N.H.,²⁹ the court held that excessive light and noise coming from the insured's plant were not "pollutants" even though excessive noise could be an "irritant," because excessive light and noise were not "solid, liquid, gaseous, or thermal irritants" as required by the pollution exclusion. Likewise, in In re Hubb Recycling, Inc.,³⁰ the court also focused on whether or not the substance at issue was inherently toxic, and thus, more likely to be an irritant or contaminant. Other courts have similarly limited the application of the pollution exclusion to pollutants that are irritants or contaminants; otherwise, the clause would be overbroad and meaningless.³¹

Nevertheless, because "[t]he most noxious of materials have their appropriate and non-polluting uses," the majority of courts find the facts of the alleged polluting incident — and not solely the perception or identity of the substance — more important than any preconceived boundaries when defining pollutants.³² Accordingly, courts often find it easy to conclude that substances ranging from paint fumes to sewage-borne bacteria are pollutants.³³ For example, in Grandadam, a child took a container of mercury from his home into the insured's residence, where he spilled it.³⁴ The court noted, "we might view this case differently if mercury was released from a broken household thermostat or thermometer. It is possible that in such a situation [m]ercury would not be considered a pollutant."³⁵ Thus, everything from seemingly harmless substances to the most toxic chemicals can be pollutants given the context of the case.³⁶

Moreover, courts are apt to find substances such as "smoke, alkalis and chemicals" to be pollutants as they are often explicitly included in the definition of pollutants.³⁷ Chemical pesticides found in chicken have been held to be pollutants "because the definition of pollutants includes chemicals."³⁸ One court even found that cigarette smoke involved vapor, smoke, or fumes within the purview of the exclusion.³⁹

Useful Products

Other courts have focused on the intended use of a chemical or substance to circumvent classification as a "pollutant." For example, in West American Insurance Co. v. Tufco Flooring East, Inc.,⁴⁰ the court held that unadulterated, pure styrene monomer resin that was brought to a worksite by a [28 ELR 10409] floor resurfacer was not an irritant or contaminant as defined by the pollution exclusion; the material was a raw material used in the normal business of resurfacing floors, and the pollution exclusion did not apply merely because the flooring material emitted vapors which contaminated nearby chicken products. The court reasoned that the focus of the pollution exclusion was the treatment of unwanted waste material, none of which was present in the case before it.⁴¹ The floor resurfacer did not bring vapors; instead, it brought flooring resin that was wanted, pure, and used in normal business activities.⁴²

Other courts have followed suit. In Great Lakes Chemical Corp. v. International Surplus Lines Insurance Co.,⁴³ the chemical at issue was a pesticide that was applied in exactly the manner intended, was approved by state and federal governments, and was neither a manufacturing byproduct nor waste product, but rather the actual end product of the manufacturing process. The court held that the pesticide was not within the ambit of the pollution exclusion "simply because the damage alleged in the underlying lawsuits is environmental damage" or because the use of the pesticide was subsequently banned.⁴⁴

Despite the foregoing arguments and reasoning, some courts have held that the status of a substance as a useful or finished product is irrelevant if it has contaminated, irritated, or polluted based on the facts of the case.⁴⁵

Ambiguity

Finally, some courts have held that the definition of "pollutant" is ambiguous; thus, they construe ambiguities in favor of the insured, and find coverage despite the pollution exclusion.⁴⁶ The court in Sergeant Construction Co. v. State Auto Insurance Co.⁴⁷ reasoned that a substance (muratic acid) could be described as an irritant or contaminant because it in fact caused physical irritation or environmental contamination or because it has the capability of causing physical irritation or contamination, regardless of whether actual harm occurred. Consequently, the court concluded that the absolute pollution clause was ambiguous and did not preclude coverage of the insured's claim.⁴⁸

When ambiguities arise, most courts do not rely solely on "official" brandings of substances as hazardous materials or pollutants by the U.S. Environmental Protection Agency, industry definitions, or statutes. These may be persuasive authorities, but they are typically not dispositive.⁴⁹

Nevertheless, courts often find the definition of pollutant to be unambiguous, and, thus, preclusive of coverage.⁵⁰ For instance, a Washington court held that "[b]ecause the injuries [from concrete sealant fumes] in this case fall within the plain language of the pollution exclusion clause, we decline to find an ambiguity based on the clause's application to hypothetical cases."⁵¹ Insureds' arguments that more specificity is needed in the clause's definition of pollutants have failed and have even drawn some hostile commentary from courts: "[W]hat would [the insured] have [the insurer] do: list every harmful chemical known to man in the definition section. At some point, reality must be incorporated by reference."⁵²

Argument 3: No Invasion of the "Environment" Has Occurred

A few courts have limited the application of the absolute pollution exclusion by requiring a substance to have entered the "environment."⁵³ Citing the historical purpose and operational [28 ELR 10410] policy terms of the pollution exclusion, the court in Tufco noted that when the pollution exclusion was first introduced, it applied only to discharges of pollutants "into or upon land, the atmosphere or any water course or body of water …."⁵⁴ Although the drafters of the absolute pollution exclusion omitted this language, the Tufco court observed that the policies behind the revised pollution exclusion did not provide any indication that the change in the language was meant to expand the scope of the clause to include nonenvironmental damage.⁵⁵ Furthermore, the Tufco court reasoned that the operative policy terms "discharge," "dispersal," "release," and "escape" were environmental terms of art requiring an invasion of the environment; thus, the omission of language "into or upon the land, the atmosphere or any water course or body of water" was insignificant because the omission merely removed a redundancy.⁵⁶ Consequently, the court held that the revised absolute pollution exclusion only applied to discharges into the environment.⁵⁷

Despite the changes to the pollution exclusion clause in the mid-1980s, some courts have permitted traditional notions of environmental pollution to control the interpretation of insurance policies and exclusions.⁵⁸ For instance, in one case, the pollution exclusion did not bar coverage for a city's insect control spraying operations because the malathion sprayed for insect control was not an environmental polluting activity such as wastewater treatment, smoke stack emissions, or dumping at a landfill.⁵⁹

Additionally, courts have held that mere interaction with a chemical or pollutant does not constitute a release into the environment. In Generali-U.S. Branch v. Caribe Realty Corp.,⁶⁰ the court concluded that a pollution exclusion did not preclude coverage of an insured landlord who was sued by a tenant for negligently allowing lead-based paint, which was ingested by the tenant's child, to remain on the walls. The court reasoned that to apply the pollution exclusion merely because an injury arises from contact with a chemical is contrary to legislative intent and case law indicating that the application of the exclusion must be triggered by an environmental pollution.⁶¹

Likewise, in Stony Run Co. v. Prudential-LMI Commercial Insurance Co.,⁶² the court held that the release of CO into an apartment due to a faulty ventilation and heating system did not unambiguously fall within the pollution exclusion. Construing the pollution exclusion in light of its general purpose, to exclude coverage for environmental pollution, the court held that the absolute pollution exclusion should not be applied to all contacts with substances that may be classified as pollutants.⁶³

Courts have also been guided by what a reasonable person would characterize as environmental pollution. In Island Associates v. Eric Group, Inc.,⁶⁴ employees at a site sued a contractor for injuries suffered from exposure to fumes from a cleaning compound. The court concluded that because there was no discharge, dispersal, release, or escape into the environment, and because fumes were not dispersed beyond the area of the building in which the contractor was performing work, "the claims alleged … arose from a routine workplace incident which a reasonable insured would not expect to be excluded from coverage pursuant to a pollution exclusion clause."⁶⁵

In accord, the Louisiana Insurance Commissioner has issued guidelines limiting the applicability of the absolute pollution exclusion to claims involving discharges of industrial pollutants that result in environmental damage.⁶⁶ The state of Louisiana may take administrative action against insurance companies if they continue to deny coverage for such claims where there is no environmentally significant damage or discharge.⁶⁷

A number of courts have refused to limit the absolute pollution exclusion clause to only classic environmental pollution. Contrary to the argument in Kenyon v. Security Insurance Co.⁶⁸ that the 1986 deletion of environmental references carried no meaning, courts that accept the plain meaning of the clause do not infer any environmental context. For example, in Madison Construction Co. v. Harleysville Mutual Insurance Co.,⁶⁹ which involved a worker overcome by fumes from a floor coating in a helicopter plant, the court rejected claims of coverage under the absolute pollution exclusion and noted that the clause "contains no such 'into the environment' language." Thus, locational limits may not [28 ELR 10411] prevent application of the exclusion to pollution that never encounters exterior land, atmosphere, or water.⁷⁰

Argument 4: No "Discharge or Release" Has Occurred

While arguing for coverage, some insureds have relied on the ambiguity of the exclusion language precluding coverage for "discharge, dispersal, release or escape of pollutants."⁷¹ For instance, the Eleventh Circuit held that because "discharge" has more than one reasonable meaning, and because none of the other remaining terms ("dispersal, release or escape") in the pollution exclusion clause precisely described the emission of vapors from an adhesive, the pollution exclusion clause was ambiguous and did not preclude insurance coverage for that emission.⁷²

Because of the reference to "discharge, dispersal, release or escape" in pollution exclusions, insureds have also successfully argued that pollution exclusions are intended to shield the insurer from liabilities of the insured to outsiders (either neighboring land owners or governmental agencies) rather than injuries caused by toxic substances that were confined within the area of their intended use.⁷³ In Lumbermens Mutual Casualty Co. v. S-W Industries, Inc.,⁷⁴ the Sixth Circuit held that a pollution exclusion clause that applied to the "discharge, dispersal, release or escape" of substances did not bar coverage for a worker injured by longtime exposure to toxic chemicals at his job because the chemicals had remained confined, as intended, in the work area.

Although very few courts offer counter arguments to assertions that no discharge occurred, some courts have sided with insurers on this argument. In Employers Casualty v. St. Paul Fire & Marine Insurance Co.,⁷⁵ the court held that there was "no question" that sulfur dioxide fumes inhaled by a worker after his acetylene torch ignited a deck coating were discharged into the workplace. The court reasoned that the "discharge" clause terms "taken together constitute a comprehensive description of the processes by which pollutants may cause injury to persons or property."⁷⁶

Similarly, the court in East Quincy Services District v. Continental Insurance Co. interpreted a discharge clause that also included the words "emission," "seepage," and "migration" to "cover every conceivable manner in which a person could experience exposure to a pollutant."⁷⁷ Thus, the "very assertion of contact" with E. coli and other bacteria that contaminated the land at issue "requires emission, release, dispersal, or escape."⁷⁸

Argument 5: The Alleged Contaminant Is Not "Waste"

Insureds may also argue that claims do not arise out of the "handling, storage, disposal, processing or treatment of waste."⁷⁹ For instance, in U.S. Fidelity & Guaranty v. B&B Oil Well Service, Inc.,⁸⁰ the court held that the exclusion did not clearly apply to a plaintiff's claims for damages from equipment contaminated with radiation that was dumped on plaintiff's property. The court held that the language of the exclusion could reasonably mean that the property must be used for the purpose of handling, storing, or disposing of waste; therefore, the exclusion does not apply if the "handling or disposal of waste is merely incidental to the purpose for which the insured or others used the premises and is not done intentionally for the purposes listed in the exclusion."⁸¹ The court concluded that because the plaintiff did not charge that the equipment was "discarded and abandoned," and because other facts indicated that the equipment might be held for future use, the depositor of the items did not intend to treat them as waste; thus, the pollution exclusion was inapplicable.⁸²

Some insureds have argued that "waste" should be limited to industrial waste. For instance, in Bituminous Casualty Corp., which involved a mobile home flooded with solid and liquid sewage from a mobile home park's septic system, the court held that "the term 'waste' must be considered within the context of the entire list [of pollutants], all of which are pollutants related to industrial waste."⁸³ Similarly, although holding that hog manure spilled on a road unambiguously constitutes waste, an Iowa court rejected an interpretation that would trigger a pollution exclusion in all instances where bodily injury or property damage resulted from the discharge, dispersal, release, or escape of merely [28 ELR 10412] anything.⁸⁴ Such an interpretation would essentially eliminate any meaning for the terms "smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants" because anything that escaped into the environment causing injury or damage would thus be classified as a pollutant.⁸⁵

Although few, if any, reported opinions have confronted the intent requirement suggested in B&B Oil Well Service directly, recent opinions have established some support for defining "waste" in clear, broad terms. The Seventh Circuit, for example, rejected a suggestion that anything suitable for further sale or use is not waste and, thus, does not fall within the absolute exclusion clause.⁸⁶ In Pipefitters Welfare Educational Fund v. Westchester Fire Insurance Co., which involved the spilling of contaminated oil while cutting a transformer in preparation for its sale for scrap, the Seventh Circuit held,

[The insured] obviously draws its substance from the colloquial definition of "waste" (i.e., a substance having no further use or value). The policy, however, expressly gives the term a more refined, technical meaning. To repeat, "waste" includes "materials to be recycled, reconditioned or reclaimed" — materials that are often useful and valuable. [The purchaser of the transformer] did not recycle, recondition or reclaim scrap metal on site, but it is undisputed that [the purchaser] was in the business of processing scrap for resale to those who did. The scrap on [the purchaser's] premises, it follows, was material to be recycled, etc., and hence clearly satisfies the policy's definition of waste.⁸⁷

Other cases have also attempted to employ a common sense approach to defining waste.⁸⁸

Argument 6: The Underlying Claim Is a Product Liability Claim for Which the Policy Provides Coverage

Insureds may attempt to circumvent the pollution exclusion by arguing that the underlying claim is essentially a product liability claim, as opposed to a pollution claim. In Great Lakes Chemical Corp. v. International Surplus Lines Insurance Co.,⁸⁹ the insured was in the business of manufacturing and selling chemical compounds, including a soil fumigant pesticide that was intended to be applied directly into and onto land. Refusing to bar the insured's claims based on the pollution exclusion, the court noted that the pesticide was applied in exactly the manner intended, was approved by state and federal governments, and was neither a manufacturing byproduct nor waste product, but rather the actual end product of the manufacturing process.⁹⁰ Thus, the court held that the underlying claims were essentially product liability claims for which the insurer did provide coverage.⁹¹

Similarly, when analyzing asbestos dust fiber exposure, the court in Continental Casualty Co. v. Rapid-American Corp. held that the reach of the pollution exclusion

extends to environmental pollution occasioned by intentional discharge of a pollutant in the course of manufacturing or distribution activities by the producer of a product, but does not embrace the harm inflicted by a product fully and finally launched into the stream of commerce, and over which the manufacturer no longer exercises any control.⁹²

The court reasoned that to hold otherwise would allow a narrow exclusion to overwhelm the clear meaning of coverage provisions:

[A]n auto manufacturer with a CGL policy would have no coverage for the personal injury caused by a faulty tailpipe because the atmosphere was the medium which conveyed the noxious [CO]; a corroding and leaking oil drum would rescind the manufacturer's product liability insurance coverage simply by the fortuitous circumstance that the contents percolated into the ground.⁹³

Finally, the Louisiana Insurance Commissioner has issued guidelines that proscribe the application of absolute pollution exclusions to the proper use of products.⁹⁴ Louisiana may take administrative action against any insurance company that fails to abide by such guideline.⁹⁵

Contrary to the foregoing case law, the Sixth Circuit labeled the attempted distinction between the sale and manufacture of products and the discharge of pollutants "one of semantics."⁹⁶ The court stated that "regardless of how one characterizes the plaintiffs' claims, the manufacturing defect allegedly resulted in the discharge of pollutants, and the pollution exclusion provision precludes coverage for this activity."⁹⁷ Likewise, the Supreme Court of Minnesota refused to apply a products liability limitation to the exclusion clause: "[T]he exclusion defines itself by characterizing the activity of the pollutant, not the activity of the insured polluter."⁹⁸ Although the court found that the exclusion clause did not apply to claims involving asbestos fibers in fireproofing [28 ELR 10413] materials because of its interpretation of "environment," the court held that the clause applied to products.⁹⁹ These positions accord with the related rejection of distinctions between finished products and unfinished products in the definition of pollutants as discussed above.¹⁰⁰

Argument 7: The Personal Injury Provisions of the Policy Afford Coverage for the Underlying Claims

Despite the existence of a pollution exclusion covering property damage, an insured may obtain coverage for a toxic tort under the personal injury clause of its insurance policy. Personal injury language in insurance policies adds coverage for numerous quasi-intentional torts involving intangible injuries, including "wrongful entry or eviction, or other invasion of the right of private occupancy."¹⁰¹ Some courts have expanded personal injury coverage to encompass private tort claims arising out of pollution exposure.¹⁰²

The "wrongful entry or eviction, or other invasion of the right of private occupancy" language has been held to encompass trespass and nuisance claims, and, therefore, some common law environmental claims.¹⁰³ Thus, if the underlying claim alleges private nuisance, public nuisance, nuisance per se, injuries resulting from diminution in the value of real estate, destruction of chattels, loss of private use, enjoyment, or possession of real property, an insured may argue that the personal injury provisions of its policy afford coverage for the underlying claims.

A majority of courts, however, have reached the opposite conclusion with respect to personal injury coverage. First, some courts simply hold that the pollution exclusion clause applies broadly to bar claims involving pollution.¹⁰⁴ Alternatively, some courts have held that "wrongful entry or eviction, or other invasion of the right of private occupancy" refers only to a person's possession of real property and not "mere physical invasion" found in environmental pollution cases.¹⁰⁵

Other courts have denied coverage when public entities are involved because of the word "private." For example, in City of Delray Beach v. Agricultural Insurance Co., in which the city prosecuted polluters, the court held that "[b]ecause there is no charge against the insureds by a private occupant of the city's water supply, there can be no 'invasion of the right of private occupancy.'"¹⁰⁶

Finally, some courts reject the personal injury argument by construing the stated pollution claims as property damage, making personal injury coverage irrelevant. For example, after noting that extending personal injury coverage to property damage would render the pollution exclusion "meaningless," the Fifth Circuit held that leaking polychlorinated biphenyls (or PCBs) into a lake was a "wholly different" risk than the intentional conduct referred to in the personal injury clause.¹⁰⁷ Likewise, New York's highest court refused to apply personal injury coverage to "pollution-generated property damage."¹⁰⁸ Rejecting claims of nuisance and trespass in a case involving a leaching [28 ELR 10414] landfill, the court noted, "Read in the context of these other enumerated torts, [the personal injury coverage] could not have been intended to cover the kind of indirect and incremental harm that results to property interests from pollution."¹⁰⁹

Conclusion

As is evident from the foregoing discussion of case law, insureds are having some success in circumventing the application of the absolute pollution exclusion in their general liability insurance policies. Obviously, the applicability of each potential argument discussed herein will turn on the specific facts of each case.

Insureds who do find themselves responsible for pollution may attempt to penetrate the armor of the absolute pollution exclusion by arguing that the insured was not an active, industrial, or knowing polluter. Or, the insured may argue that certain policy or exclusion terms are ambiguous and should be construed in favor of the insured. For instance, the insured may argue that the substance is not a "pollutant," that no invasion of the "environment" has occurred, that no "discharge or release" has occurred, or that the alleged contaminant is not "waste."

In particular, insureds' arguments that no discharge or release has occurred or that the alleged contaminant is not a waste are meeting with success. Moreover, where factually appropriate, insureds have been having some success arguing that the underlying claim is a product liability claim and, therefore, a covered occurrence. Even with respect to the arguments on which insurers frequently prevail, as with the personal injury and active or industrial polluter arguments, some insureds are able to obtain coverage based on the facts of the case. Such decisions may be evidence of an increasing judicial willingness to find coverage for insureds despite the absolute pollution exclusion.

Insureds' arguments may be further bolstered by government actions or policies such as those of the Louisiana Insurance Commissioner, who recently issued guidelines limiting the applicability of absolute pollution exclusions to claims involving significant discharges of industrial pollutants that resulted in environmental damage and that proscribe the application of the absolute pollution exclusion to the proper use of products. Consequently, as regulatory and judicial trends begin to emerge, and as insureds continue to cultivate new arguments in favor of coverage, it is evident that the absolute pollution exclusion is not always absolute.

1. INSURANCE COVERAGE FOR ENVIRONMENTAL CLAIMS § 3.07(2) (Matthew Bender 1992).

2. Id. § 3.07(2)(b).

3. Id. § 3.07(3).

4. Id.

5. 1986 ISO Form CG-00-01-11-85.

6. See, e.g., West Am. Ins. Co. v. Band & Desenberg, 925 F. Supp. 758, 760 (M.D. Fla. 1996) ("If the language of the policy is ambiguous, the policy must be interpreted so as to provide coverage.").

7. See National Union Fire Ins. Co. of Pittsburgh v. CBI Indus., Inc., 907 S.W.2d 517, 522 n.8 (Tex. 1995) (listing numerous court decisions examining absolute pollution exclusion clauses).

8. 851 S.W.2d 403, 406 (Ark. 1993).

9. Id. at 404; see Molton, Allen & Williams, Inc. v. St. Paul Fire & Marine Ins. Co., 347 So. 2d 95 (Ala. 1977) (holding that pollution exclusion clauses were intended to cover only industrial pollution and contamination as opposed to the sand and dirt passing from a subdivision onto adjacent land and lakes); Continental Cas. Co. v. Rapid-American Corp., 581 N.Y.S.2d 669, 673 (N.Y. App. Div. 1992) (evaluating coverage for asbestos dust and fiber exposure and holding that "the intent of the 'pollution exclusion' clause was to eliminate coverage for damages arising out of pollution or contamination by industry-related activities").

10. Thompson v. Temple, 580 So. 2d 1133, 1134 (La. Ct. App. 1991) (discussing coverage for carbon monoxide (CO) leak from a bathroom heater).

11. See Regional Bank of Colo. v. St. Paul Fire & Marine Ins. Co., 35 F.3d 494 (10th Cir. 1994) (CO from malfunctioning heater); General Accident Ins. Co. v. Idbar Realty Corp., 622 N.Y.S.2d 417 (N.Y. Sup. Ct. 1994) (lead paint).

12. Regional Bank; 35 F.3d at 498.

13. See State of Louisiana, Advisory Letter No. 97-01 (June 4, 1997).

14. See id.

15. 648 A.2d 1047, 1051 (Md. Ct. Spec. App. 1994).

16. Id.

17. Id. at 1052.

18. Deni Assocs. of Fla. v. State Farm Fire & Cas. Ins. Co., Nos. 89115, 89300, 28 ELR 21069 (Fla. Jan. 29, 1998).

19. Id.; see also Larsen Oil Co. v. Federated Serv. Ins. Co., 859 F. Supp. 434, 438 (D. Or. 1994) (holding, in regard to a heating oil claim case, that "[i]t is the type of damage, not the cause of damage, that controls whether the exclusion applies"); Incorporated Village of Cedarhurst v. Hanover Ins. Co., 636 N.Y.S.2d 390 (N.Y. App. Div. 1996) (holding that pollution exclusions are not limited only to actual or intentional polluters or industrial or to commercial enterprises that create pollution or waste and, thus, applying pollution exclusion to an overflow of a city sewer system); Crescent Oil Co. v. Federated Mut. Ins. Co., 888 P.2d 869, 872-73 (Kan. Ct. App. 1995) (applying exclusion to claims involving leaks from underground gasoline storage tanks despite arguments that original purpose of the insurance industry in developing the exception was to deny coverage for industrial activities, because "[l]imiting the definition of pollution to intentional industrial pollution has no basis in the language of the policy").

20. Northern Ins. Co. of N.Y. v. Aardvark Assocs., 942 F.2d 189, 194, 21 ELR 21350, 21352 (3d Cir. 1991) (rejecting "active" versus "passive" argument in case involving industrial waste hauler).

21. 656 N.E.2d 787, 790 (Ill. App. 1995).

22. U.S. Fidelity & Guar. Co. v. Murray Ohio Mfg. Co., 693 F. Supp. 617, 621 (M.D. Tenn. 1988); see also Park-Ohio Indus., Inc. v. Home Indem. Co., 975 F.2d 1215, 1219-22 (6th Cir. 1992) (holding that clear and plain language of clause "follows the product" not the polluter under Ohio law and rejecting arguments that claims concerning induction furnaces did not involve active pollution); Federal Ins. Co. v. Susquehanna Broad. Co., 727 F. Supp. 169, 177, 20 ELR 20622, 20625 (M.D. Pa. 1989), modified on other grounds, 738 F. Supp. 896, 20 ELR 21295 (M.D. Pa. 1990) (noting in regard to waste hauling claim that the terms "active" and "passive" polluters are "foreign to the policies in question" under Pennsylvania rules of interpretation).

23. See Park-Ohio, 975 F.2d at 1220-22 (rejecting original New York argument regarding active pollution distinction); Susquehanna, 727 F. Supp. at 177, 20 ELR at 20625 ("'[C]ases have ignored the statutory basis of [the leading New York precedent's] holding, and extended the concept beyond its more limited holding.'") (quoting Fireman's Fund Ins. Cos. v. Ex-Cell-O Corp., 702 F. Supp. 1317, 1325 n.12 (E.D. Mich. 1988); Oates v. New York, 597 N.Y.S.2d 550, 552-54 (N.Y. Ct. Cl. 1993) (explaining dated case law resulting from passage and repeal of requirement).

24. See Powers Chemco, Inc. v Federal Ins. Co., 533 N.Y.S.2d 1010, 1011-12 (N.Y. App. Div. 1988) (refusing to ignore "clear and unambiguous" insurance contract based on "notions of abstract justice or moral obligation" in case involving hazardous waste cleanup).

25. Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037, 1043 (7th Cir. 1992) (involving the spill of oil containing polychlorinated biphenyls (PCBs) from electrical transformer).

26. Id. (quoting Westchester Fire Ins. Co. v. City of Pittsburg, Kan., 768 F. Supp. 1463, 1470 (D. Kan. 1991)); see Island Assocs. v. Eric Group, Inc., 894 F. Supp. 200, 203 (W.D. Pa. 1995) (applying a "common sense approach" and holding that a reasonable person could justifiably conclude that the confined fumes from a cleaning compound, which had not been identified as hazardous or toxic, were not pollutants as defined in the policy, and, if the court read the definition of pollutants more broadly, it would be "virtually boundless").

27. A-1 Sandblasting & Steamcleaning Co. v. Baiden, 632 P.2d 1377, 1379-80 (Or. Ct. App. 1981), aff'd, 643 P.2d 1260 (Or. 1982).

28. 768 F. Supp. 1463, 1468-70 (D. Kan. 1991).

29. 898 F.2d 265, 267-68 (1st Cir. 1990).

30. 106 B.R. 372, 375 (D.N.J. 1989).

31. See Sargent Constr. Co. v. State Auto Ins. Co., 23 F.3d 1324, 1327 (8th Cir. 1994) ("[T]he true issue becomes whether that substance can be classified as an 'irritant or contaminant.'"); In re Hubb Recycling, 106 B.R. at 375 (insurer had to prove that construction debris and recyclables were irritants or contaminants); Guilford Indus. v. Liberty Mut. Ins. Co., 688 F. Supp. 792, 794 (D. Me. 1988) ("Plaintiff is correct that almost any substance might fall within the exclusion, but it can only do so in certain very precisely drawn circumstances: if it is an irritant or contaminant.").

32. U.S. Fire Ins. Co. v. Ace Baking Co., 476 N.W.2d 280, 283 (Wis. App. 1991); see Deni Assocs. of Fla. v. State Farm Fire & Cas. Ins. Co., Nos. 89115, 89300, 28 ELR 21069 (Fla. Jan. 29, 1998) (refusing to apply doctrine of "reasonable expectations" to pollution exclusion); Allen v. St. Paul Fire & Marine Ins. Co., No. 06-97-00033, 1998 WL 2593 (Tex. App. Jan. 6, 1998) (commenting that "[a]rtful pleading of facts cannot bring excluded claims back within coverage" and holding that plaintiffs' nonpotability and poor water quality claims are merely restatements of pollution contamination that fall within the exclusion).

33. See American States Ins. Co. v. Nethery, 79 F.3d 473, 476 (5th Cir. 1996)(finding paint and glue fumes to be pollutants because they were gaseous irritants to claimant, even if they would not bother most persons); East Quincy Servs. Dist. v. Continental Ins. Co., 864 F. Supp. 976, 979-80 (E.D. Cal. 1994) (finding fecal coliform and other sewage-borne bacteria to be pollutants); Guilford, 688 F. Supp. at 795 (calling oil spilled into river "an obvious polluting event"); Cannon Constr. Co. v. Liberty Mut. Ins. Co., 642 N.Y.S.2d 88 (N.Y. App.Div. 1996) (finding asphalt sealant that discharged into creek is a pollutant); National Union Fire Ins. Co. of Pittsburgh v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995) (finding cloud of hydrofluoric acid "clearly a 'pollutant'"); Board of Regents v. Royal Ins. Co., 517 N.W.2d 888, 892 (Minn. 1994) (stating that "[w]e would be doing a disservice to the English language if we were to say that asbestos fibers, which are a health hazard because of their irritant effects on the human body, were not an irritant").

34. 656 N.E.2d 787, 791 (Ill. App. Ct. 1995).

35. Id.

36. See Employers Cas. Co. v. St. Paul Fire & Marine Ins. Co., 44 Cal. App. 4th 545, 556 n.6 (Cal. Ct. App. 1996) (concluding that sulfur dioxide (SO₂) fumes were clearly pollutants on facts of case and then noting that "[i]t is unnecessary to determine whether 'irritant or contaminant' are ambiguous in the abstract"); Board of Regents of Univ. of Minn. v. Royal Ins. Co., 503 N.W.2d 486, 492 (Minn. App. 1993), modified and aff'd, 517 N.W.2d 888 (Minn. 1994) (stating that "[w]hether something is a pollutant may depend on whether it is where it is not supposed to be"); Weber v. IMT Ins. Co., 462 N.W.2d 283, 286 (Iowa 1990) (finding that hog manure is a pollutant when spilled on road).

37. See U.S. Liab. Ins. Co. v. Bourbeau, 49 F.3d 786, 788 (1st Cir. 1995) (deeming lead paint chips to be a pollutant after noting broad "potpourri of pollutants to consider, from smoke to toxic chemicals" described in policy); Salina v. Maryland Cas. Co., 856 F. Supp. 1467, 1479 (D. Kan. 1994) (noting word "alkali" in policy and noting cleaning solution's substantial increase in water's pH level); Employers Cas. Co. v. St. Paul Fire & Marine Ins. Co., 44 Cal. App. 4th 545, 556 (Cal. Ct. App. 1996) (finding SO₂ fumes released from plaster burnt by subcontractor's employee to be pollutant because they were a "gaseous irritant" and "toxic"); Bernhardt v. Hartford Fire Ins. Co., 648 A.2d 1047, 1051 (Md. Ct. Spec. App. 1994) (holding that CO gas was clearly included within the words "fumes" or "chemicals"); Perkins Hardwood Lumber Co. v. Bituminous Cas. Corp., 378 S.E.2d 407, 409 (Ga. Ct. App. 1989) (holding that smoke from wood fire is a pollutant, which was defined in the policy to include "smoke," because the "exclusion does not require that the 'smoke' result from the burning of any specified material in order to beconsidered an 'irritant' or 'contaminant'").

38. Townsends of Ark., Inc. v. Millers Mut. Ins. Co., 823 F. Supp. 233, 240 (D. Del. 1993).

39. Demakos v. Travelers Ins. Co., 613 N.Y.S.2d 709, 710 (N.Y. App. Div. 1994).

40. 409 S.E.2d 692 (N.C. Ct. App. 1991).

41. Id. at 698.

42. Id.; see American States Ins. Co. v. Kiger, 662 N.E.2d 945 (Ind. 1996) (gasoline might not be "pollutant" when considered from standpoint of a service station operator).

43. 638 N.E.2d 847, 851 (Ind. Ct. App. 1994).

44. Id.

45. See American States Ins. Co. v. Nethery, 79 F.3d 473, 477 (5th Cir. 1996) (calling usefulness argument "semantics" because paint and glue fumes were unwanted); Aetna Cas. & Sur. Co. v. Dow Chem. Co., 933 F. Supp. 675, 683-84 (E.D. Mich. 1996) (regarding contamination involving petroleum products); Madison Constr. Co. v. Harleysville Mut. Ins. Co., 678 A.2d 802, 806 (Pa. Super. Ct. 1996) (rejecting rationale in Tufco and noting that while floor sealant was commonly used construction product, its harmful vapors "however unavoidable, were not"; the vapors were "an unwanted irritating waste product"), appeal allowed, 690 A.2d 711 (Pa. 1997).

46. See Sargent Constr. Co. v. State Auto Ins. Co., 23 F.3d 1324 (8th Cir. 1994).

47. Id. at 1327.

48. Id.

49. See, e.g., Nethery, 79 F.3d at 476-77 (noting EPA's treatment of chemical in paint and glue fumes but not relying on it); Aetna, 933 F. Supp. at 685 (noting that constructions that involve court in complex scientific or technical areas are not favored); Salina v. Maryland Cas. Co., 856 F. Supp. 1467, 1478 (D. Kan. 1994) (noting EPA's classification of cleaning solution as hazardous); American States Ins. Co. v. FHS, Inc., 843 F. Supp. 187, 189-90 (S.D. Miss. 1994) (refusing to adopt definition of pollutant in ammonia leak case offered by environmental engineers); St. Leger v. American Fire & Cas. Ins. Co., 870 F. Supp. 641, 643 (E.D. Pa. 1994) (citing statutory support for lead paint being a "hazard"); Guilford Indus., Inc. v. Liberty Mut. Ins. Co., 688 F. Supp. 792, 794 (D. Me. 1988) (noting that state environmental protection statutes provided "an excellent source of information" regarding oil's qualification); Legarra v. Federated Mut. Ins. Co., 35 Cal. App. 4th 1472, 1481 (Cal. Ct. App. 1995) (rejecting arguments that petroleum is not a pollutant as "belied both by science and common sense"); Crescent Oil Co. v. Federated Mut. Ins. Co., 888 P.2d 869, 872 (Kan. Ct. App. 1995) (finding gasoline qualifies as pollutant regardless of its regulation).

50. See Brown v. American Motorists Ins. Co., 930 F. Supp. 207, 208-09 (E.D. Pa. 1996) (refusing to substitute new, more limiting definition of pollutant incase involving over-the-counter waterproofing sealant); FHS, 843 F. Supp. at 190 (holding that "court is not free to rewrite" the unambiguous definition of pollutant); Perkins Hardwood Lumber Co. v. Bituminous Cas. Corp., 378 S.E.2d 407, 409 (Ga. App. 1996) (exclusion "clearly and unambiguously defines a pollutant … [to include] smoke").

51. Cook v. Evanson, 920 P.2d 1223, 1227 (Wash. Ct. App. 1996).

52. Oates v. New York, 597 N.Y.S.2d 550, 553-54 (N.Y. Ct. Cl. 1993) (concluding that lead paint was a pollutant based on state law and the "general tenor" of the clause); see also Deni Assocs. of Fla. v. State Farm Fire & Cas. Ins. Co., Nos. 89115, 89300, 28 ELR 21069 (Fla. Jan. 29, 1998) (exclusion not ambiguous just because "irritant" and "contaminant" are not defined); American States Ins. Co. v. Zippro Constr., 455 S.E.2d 113 (Ga. Ct. App. 1995) ("There is little question that asbestos constitutes a pollutant as unambiguously defined in the exclusion…. It is a known respiratory 'irritant' and a solid 'contaminant.'").

53. See, e.g., Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., No. 96-35713, 1997 WL 784492 (9th Cir. Dec. 23, 1997) (applying Montana law and holding that pollution exclusion did not bar coverage for claim against insured for wrongfully or negligently adding foreign substance to crude oil because exclusion language referring to "seepage, pollution or contamination" indicated that the exclusion only applied to environmental harms); American States Ins. Co. v. Koloms, 687 N.E.2d 72 (Ill. 1997) (absolute pollution exclusion does not bar coverage for CO poisoning caused by an allegedly defective furnace because exclusion only applies to injuries caused by traditional environmental pollution); Kenyon v. Security Ins. Co., 626 N.Y.S.2d 347 (N.Y. Sup. Ct. 1993) (pollution exclusion may not bar claims that have few indicia of traditional environmental pollution); West Am. Ins. Co. v. Tufco Flooring E., Inc., 409 S.E.2d 692, 699 (N.C. Ct. App. 1991) ("the pollution exclusion applies only to discharges into the environment").

54. 409 S.E.2d at 699 (citations omitted).

55. Id.

56. Id. at 699-700.

57. Id.; see also Kenyon, 626 N.Y.S.2d 347 (involving CO poisoning from a furnace installed in a condominium utility closet).

58. See Kenyon, 626 N.Y.S.2d at 351.

59. Westchester Fire Ins. Co. v. City of Pittsburg, Kan., 768 F. Supp. 1463, 1471 (D. Kan. 1991); see Kenyon, 626 N.Y.S.2d at 351; see also A-1 Sandblasting & Steamcleaning Co. v. Baiden, 632 P.2d 1377, 1380 (Or. Ct. App. 1981) ("[a] fair reading of the endorsement leads to the conclusion it was intended to exclude insurance coverage resulting from pollution and contamination of the environment, be it land, water or the atmosphere") (citing Pepper Indus., Inc. v. Home Ins. Co., 134 Cal. Rptr. 904, 908 (Cal. Ct. App. 1977)), aff'd, 643 P.2d 1260 (Or. 1982).

60. 612 N.Y.S.2d 296, 298 (N.Y. Sup. Ct. 1994).

61. Id. at 298-99.

62. 47 F.3d 34 (2d Cir. 1995).

63. Id. (citing Karroll v. Atomergic Chems. Corp., 600 N.Y.S.2d 101 (N.Y. App. Div. 1993) (holding that the exclusion did not bar coverage for action by plaintiff who was accidentally sprayed with sulfuric acid while working as a bulldozer operator because "the exclusion clause may be reasonably interpreted to apply only to instances of environmental pollution")); see also Owens-Corning Fiberglas v. Allstate Ins., 660 N.E.2d 746 (Ohio Com. Pl. 1993) (holding that, as a matter of law, the release of asbestos fibers indoors could not be classified as a release "into the atmosphere" within the context of the pollution exclusion).

64. 894 F. Supp. 200 (W.D. Pa. 1995).

65. Id. at 204; see also Regional Bank v. St. Paul Fire & Marine Ins. Co., 35 F.3d 494, 498 (10th Cir. 1994) ("While a reasonable person of ordinary intelligence might well understand [CO] is a pollutant when it is emitted in an industrial or environmental setting, an ordinary policyholder would not reasonably characterize [CO] emitted from a residential heater which malfunctioned as 'pollution.'").

66. State of Louisiana, Advisory Letter No. 97-01 (June 4, 1997).

67. Id.

68. 626 N.Y.S.2d 347 (N.Y. Sup. Ct. 1993).

69. Madison Constr. Co. v. Harleysville Mut. Ins. Co., 678 A.2d 802, 803-06 (Pa. Super. Ct. 1996); see also American States Ins. Co. v. Nethery, 79 F.3d 473, 477 (5th Cir. 1996) ("The pollution exclusion at issue encompasses more than traditional conceptions of pollution."); West Am. Ins. Co. v. Band & Desenberg, 925 F. Supp. 758, 762 (M.D. Fla. 1996) (rejecting environmental pollution arguments in case involving "sick building syndrome" because "this pollution exclusion does not have the language" of the earlier policy); Employers Cas. v. St. Paul Fire & Marine Ins. Co., 44 Cal. App. 4th 545, 555 (Cal. Ct. App. 1996) (concluding that the release of SO₂ fumes into a workplace was within the exclusion because the clause "does not contain the limiting language of an earlier version of the exclusion").

70. See Essex Ins. Co. v. Tri-Town Corp., 863 F. Supp. 38, 40-41 (D. Mass. 1991) (CO released from ice resurfacing machine into skating rink fell within exclusion); Brown v. American Motorists Ins. Co., 930 F. Supp. 207, 209 (E.D. Pa. 1996) (finding fumes from water-proofing sealant that migrated into house "within the plain language of the pollution exclusion"); Cook v. Evanson, 920 P.2d 1223, 1226 (Wash. Ct. App. 1996) (holding for insurer in case involving concrete sealant fumes released in building because absolute pollution exclusion clause does not "limit its application to classic environmental pollution" or exempt "business operations").

71. 1986 ISO Form CG-00-01-11-85.

72. Bituminous Cas. Corp. v. Advanced Adhesive Tech., Inc., 73 F.3d 335 (11th Cir. 1996); see also Red Panther Chem. Co. v. Insurance Co. of Pa., 43 F.3d 514 (10th Cir. 1994) (total pollution exclusion did not bar coverage when a car mechanic inhaled ethyl parathion after a drum of that chemical had been dragged by a vehicle that the mechanic was examining because it was ambiguous whether "escape" meant to include the expulsion of a container of pollutants in a moving vehicle); Center for Creative Studies v. Aetna Life & Cas. Co., 871 F. Supp. 941 (E.D. Mich. 1994) (absolute pollution exclusion did not exclude coverage of injuries caused when a photo developer was overcome by fumes from chemical because such exposure did not result from "the discharge, dispersal, release or escape of pollutants").

73. See, e.g., Lumbermens Mut.Cas. Co. v. S-W Indus., Inc., 39 F.3d 1324, 1336 (6th Cir. 1994); Island Assocs. v. Eric Group, Inc., 894 F. Supp. 200 (W.D. Pa. 1995) (fumes from contractor's cleaning compound not discharged or dispersed beyond area of building where contractor was performing work).

74. 39 F.3d at 1336 (stating that "[i]t strains the plain meaning, and obvious intent of the language to suggest that these fumes, as they went from the container to [the injured worker's] lungs, had somehow had been 'discharged, dispersed, released or escaped'") (citation omitted).

75. 44 Cal. App. 4th 545, 550 (Cal. Ct. App. 1996).

76. Id.; see also Townsends of Ark., Inc. v. Millers Mut. Ins. Co., 823 F. Supp. 233, 240-41 (D. Del. 1993) (rejecting argument regarding limitations to discharge clause and finding chemical pesticide mixed with chicken feed to have been "'dispersed' through the chicken feed manufacturing process").

77. East Quincy Servs. Dist. v. Continental Ins. Co., 864 F. Supp. 976, 980 (E.D. Cal. 1994).

78. Id.

79. 1986 ISO Form CG-00-01-11-85.

80. 910 F. Supp. 1172, 1179 (S.D. Miss. 1995).

81. Id.

82. Id. at 1180.

83. 851 S.W.2d 403, 406 (Ark. 1993).

84. Weber v. IMT Ins. Co., 462 N.W.2d 283 (Iowa 1990).

85. Id. at 286.

86. Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037, 1043 (7th Cir. 1992).

87. Id.

88. See Dryden Oil Co. of New England v. Travelers Indem. Co., 91 F.3d 278, 284, 26 ELR 21623, 21626 (1st Cir. 1996) ("At the very least, an objectively reasonable policyholder would regard spills or releases of oil, industrial lubricants or hazardous materials as 'materials to be disposed of or waste.'"); U.S. Liab. Ins. Co. v. Bourbeau, 49 F.3d 786, 788 (1st Cir. 1995) (noting that "[a]n objectively reasonable person would also consider lead paint chips 'materials to be disposed of' or 'waste'"); see also Constitution State Ins. Co., v. Iso-Tex, Inc., 61 F.3d 405, 409-10 (5th Cir. 1995) (finding nuclear waste to be unambiguously included in term "waste"); Remington Arms Co. v. Liberty Mut. Ins. Co., 810 F. Supp. 1406, 1419-20 (D. Del. 1992) (finding lead shot and target debris at shooting club to be solid waste based on federal environmental laws); Weber, 462 N.W.2d at 286 (emphasizing that, although there may need to be some limits to definition of waste, unambiguous and ordinary meaning of term applied to hog manure spilled on road).

89. 638 N.E.2d 847 (Ind. Ct. App. 1994).

90. Id. at 851.

91. Id.; see also West Am. Ins. Co. v. Tufco Flooring E., Inc., 409 S.E.2d 692 (N.C. Ct. App. 1991) (holding that vapors from raw material used in the normal business of resurfacing floors were not pollutants where policy contained "products-computed operations hazard" clause).

92. Continental Cas. Co. v. Rapid-American Corp., 581 N.Y.S.2d 669, 673 (N.Y. App. Div. 1992).

93. Id.

94. State of Louisiana, Advisory Letter No. 97-01 (June 4, 1997).

95. Id.

96. Park-Ohio Indus., Inc. v. Home Indem. Co., 975 F.2d 1215, 1223 (6th Cir. 1992) (involving furnaces later used to burn rubber).

97. Id.

98. Board of Regents of Univ. of Minn. v. Royal Ins. Co., 517 N.W.2d 888, 891 (Minn. 1994).

99. Id.; see also Manufacturers Gasket Co. v. Transcontinental Ins. Co., No. 93-3108, 1993 U.S. App. LEXIS 29678, at *2-3 (6th Cir. Nov. 12, 1993) (unpublished opinion) (noting that pollution exclusion clause applies to products liability claims under Ohio law); Independent Sch. Dist. No. 197 v. Accident & Cas. Ins. of Winterthur, 525 N.W.2d 600, 609 (Minn. Ct. App. 1995) (noting in asbestos case that pollution exclusion applies to products liability claims); Monsanto Co. v. Aetna Cas. & Sur. Co., No. 88C-JA-118, 1993 Del. Super. LEXIS 441, at *30 (Del. Super. Ct. Dec. 9, 1993) (noting that it was "unnecessary to characterize the liability claims [involving hazardous waste dumping as either product or pollution claims] to determine that the damage and injury was caused by pollutants contaminating the environment").

100. See supra note 45 and accompanying text; Aetna Cas. & Sur. Co. v. Dow Chem. Co., 933 F. Supp. 675, 683 (E.D. Mich. 1996) (noting in pesticide case that "[j]ust because a chemical is the policyholder's 'finished product' does not mean that it is not a pollutant"); see also American States Ins. Co. v. Nethery, 79 F.3d 473, 477 (5th Cir. 1996) (involving paint and glue); Madison Constr. Co. v. Harleysville Mut. Ins. Co., 678 A.2d 802, 806 (Pa. Super. Ct. 1996) (involving sealant product used in helicopter plant), appeal allowed, 690 A.2d 711 (Pa. 1997).

101. 1973 ISO Standard General Liability Policy.

102. See Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037 (7th Cir. 1992) (involving spill of oil containing PCBs from electrical transformer); Titan Holdings Syndicate, Inc. v. Keene, N.H., 898 F.2d 265 (1st Cir. 1990) (discussing light, noise and odors from city's sewage treatment plant); Hirschberg v. Lumbermens Mut. Cas., 798 F. Supp. 600, 604 (N.D. Cal. 1992) (involving worker's exposure to toxic cements and solvents used in rubber plant's fabricating process).

103. Summit Corp. of Am. v. Travelers Cos., No. 49D02-9509-CP-1378 (Ind. Super. Ct. Aug. 19, 1997) (stating that "[e]nvironmental contamination constitutes a 'wrongful entry,' which is similar to trespass, and it constitutes an 'other invasion' of the right to private occupancy"); see also Pipefitters, 976 F.2d 1037; Titan Holdings, 898 F.2d 265; State Farm Fire & Cas. Co. v. Westchester Inv. Co., 721 F. Supp. 1165 (C.D. Cal. 1989) (discussing race discrimination in renting of apartments); City of Edgerton v. General Cas. Co., 493 N.W.2d 768 (Wis. Ct. App. 1992) (involving groundwater contamination from city's landfill).

104. See Harrow Prods., Inc. v. Liberty Mut. Ins. Co., 64 F.3d 1015, 1025 (6th Cir. 1995) (requiring an insurer to defend or indemnify a manufacturer accused of polluting a city's water wells with contaminants based on a personal injury theory would "render the pollution exclusion clause a nullity"); see also U.S. Bronze Powders, Inc. v. Commerce & Indus. Ins. Co., 679 A.2d 674, 677 (N.J. Super. Ct. App. Div. 1996) (noting majority consensus and holding that applying personal injury coverage to soil pollution case would "render meaningless the unambiguously stated specific pollution exclusion language"); O'Brien Energy Sys., Inc. v. American Employers' Ins. Co., 629 A.2d 957, 963 (Pa. Super. Ct. 1993) (concluding in methane gas pollution and explosion case that pollution exclusion "is equally applicable to claims for personal injury caused by a wrongful entry or eviction" because an opposite holding "would emasculate" the exclusion contrary to the parties' intent); Production Stamping Corp. v. Maryland Cas. Co., 544 N.W.2d 584, 588 (Wis. Ct. App. 1996) ("To permit the personal injury coverage to trump an absolute pollution exclusion … would nullify that exclusion …."); Union Oil Co. of Cal. v. International Ins. Co., 37 Cal. App. 4th 930, 937-40 (Cal. Ct. App. 1995) (agreeing in underground gasoline tank case that personal injury provisions do not apply); W.H. Breshears, Inc. v. Federated Mut. Ins. Co., 832 F. Supp. 288, 291 (E.D. Cal. 1993), aff'd on other grounds, 38 F.3d 1219, 1994 WL 577258 (9th Cir. 1994) (unpublished opinion) (noting as alternative holding that covering above-ground gasoline leak under personal injury clause would have an "anomalous result").

105. Staefa Control-Sys. Inc. v. St. Paul Fire & Marine Ins. Co., 847 F. Supp. 1460, 1474 (N.D. Cal. 1994) (involving soil and groundwater contamination); see City of Delray Beach v. Agricultural Ins. Co., 85 F.3d 1527, 1534 (11th Cir. 1996) (affirming district court ruling in groundwater solvent contamination case that drew similar distinction); see also Decorative Ctr. of Houston v. Employers Cas. Co., 833 S.W.2d 257, 261-63 (Tex. Ct. App. 1992) (interpreting personal injury clause in nonenvironmental pollution context to be limited to landlord-tenant or occupancy-related disputes).

106. City of Delray Beach, 85 F.3d 1527, 1534 (11th Cir. 1996); see also Kent County v. Home Ins. Co., 551 N.W.2d 424 (Mich. Ct. App. 1996) (involving county-run solid waste landfill).

107. Gregory v. Tennessee Gas Pipeline Co., 948 F.2d 203, 209 (5th Cir. 1991).

108. County of Columbia v. Continental Ins. Co., 634 N.E.2d 946, 950 (N.Y. 1994).

109. Id.; see also City of Delray Beach, 85 F.3d at 1535; East Quincy Servs. Dist. v. Continental Ins. Co., 864 F. Supp. 976, 982 (E.D. Cal. 1994) (holding that ground contamination injuries were "identical to claims for property damage" and thus not covered by the pollution exclusion); Monsanto Co. v. Aetna Cas. & Sur. Co., No. 88C-JA-118, 1993 Del. Super. LEXIS 441, at *29 (Del. Super. Ct. Dec. 9, 1993) (rejecting claim that waste disposal case involved personal injury); Cotter Corp. v. Great Am. Ins. Co., No. 96 CV 0462 (Colo. Dist. Ct. Jan. 5, 1998) (focusing on the underlying facts at issue and holding that trespass and nuisance claims are claims for damage to real property, not damage to intangible personal rights); Titan Corp. v. Aetna Cas. & Sur. Co., 27 Cal. Rptr. 2d 496 (Cal. Ct. App. 1994).