Hinkhouse Williams Walsh

HWW Attorneys Secure Summary Judgment Upholding Absolute Pollution Exclusion.

Illinois Trial Court Upholds the Absolute Pollution Exclusion and Enters Summary Judgment in Favor of Insurer.

Erie Insurance Exchange issued a CGL insurance policy to Imperial Marble Corporation, a manufacturer of cultured marble located in Somonauk, Illinois.  During the years of coverage, residents of Somonauk filed a class action lawsuit against Imperial alleging that Imperial’s manufacturing facility released chemicals into the atmosphere which caused noxious odors and contaminants to invade the plaintiffs’ persons and property.  The class action complaint alleged that Imperial intentionally operated its manufacturing facility in a manner that caused the plaintiffs’ harm.  The complaint alleged that, in violation of Illinois Environmental Protection Agency regulations, Imperial caused styrene, methyl methacrylate, methyl ethyl ketone, dimethyl phthalate and other volatile organic materials and hazardous air pollutants to invade the persons and adjacent property of the plaintiffs.  The complaint alleged that, in the aggregate, Imperial’s plant released over 150 tons of chemicals in 2003 alone.

Erie filed a Complaint for Declaratory Judgment seeking a declaration from the court that it did not owe a duty to defend or indemnify Imperial against the allegations in the class action complaint based on the absolute pollution exclusion in the policy.  Imperial argued in favor of coverage on the grounds that its emissions are not “pollution.”  Imperial contended that it was not engaged in pollution of any kind because its Somonauk facility operated pursuant to certain regulatory permits that allowed the facility to emit the chemicals within limits specified by the regulatory agencies.  Imperial further contended that because it released the chemicals pursuant to a permit, the emissions lost the essence of their character as “pollution.” 

HWW argued that the facts alleged in the complaint clearly alleged pollution that took place during the policy period and that fell squarely within the absolute pollution exclusion as defined in the policy.  The court agreed with our position and rejected Imperial’s argument that it was not engaged in pollution by virtue of its compliance with regulatory permits.  The court noted that it should not substitute the policy’s clear and unambiguous language with the definition of pollution from the regulatory framework. 

The trial court entered summary judgment in favor of the insurer.  Imperial intends to appeal the trial court’s ruling to Illinois’ Third District Appellate Court where HWW hopes to make some additional Illinois law that upholds the absolute pollution exclusion.