mr shortz you may proceed when you're ready morning your honour's may please the court counsel my name is brandon shorts and along with my father michael schwartz i have the honor of representing restaurant recycling in this case the district court impermissibly added allegations to the underlying complaint at issue and construed inferences in favor of the moving party employer mutual casualty company which the parties have referred to as e m c and this declaratory judgment action which is now before you it was only because the district court added allegations to the underlying complaint and only because the district court considered inferences against my client and in favor of e m c that e m c is motion for judgment on the pleadings was granted this was improper and requires reversal this case should have been resolved by federal rule of civil procedure twelve see the e m c pollution exclusion provision in what was and more importantly what was not set forth and new fashioned porks complaint against restaurant recycling what is glaringly barren from new fashion parks complaint is most important a resolution of this appeal or restaurant recycling is in the fat recycling business it buys fat for instance from restaurants and resells the fat to feed mills feed mills in turn use this recycled fat as a binding ingredient for their feed to livestock the underlying complaint here at the liability lawsuit involved the two parties at the end of a chain of purchasing new fashion park and restaurant recycling this product started that with zoologists who was the manufacturer of the antibiotic last alice said transferred the heritage  related to different underlying plaintiffs there was litigation before the minnesota district court with regards to superior feed and its insurance carrier ok which was subtle but you might want to focus in on the did not dispute at the district court level that last get oil which is a by product in the manufacture of the medication salah said excuse me would be considered a pollutant under the pollution exclusion well that's true why don't you lose because your hon r and if you look at the williams case williams versus employers mutual casualty company you have to examine each issue and that case examined radium alpha particle activity and bacteria it didn't just and analyze whether there was multiple substances in one was polluted it actually analyze whether each of those different substances would meet the definition of a pollutant but if i have it didn't but if you have one that meets the definition and cause the harm why wouldn't that be enough to trigger the exclusion because if you look at the if you look at the underlying complaint here it does not they lump them together and when you look at what and so when you're when you're having to distinguish between what is and what is not a pollutant and you're looking and i would say to the court to the circuit opinion of twenty seventeen williams versus employers it actually did examine whether radium or would not be a pollutant it actually goes all of what you're arguing goes to the merits when you're talking about a duty to defend the duty defend is and vote by the terms of the policy and so here if as judge how to mention if there is a pollutant and the policy says you know the this case each of those cases there was an e p a decision or a minnesota polluting decision or some governmental classification that the issue that the actual substance was a pollutant for instance carbon monoxide we're talking about the one that you've conceded is a pollutant right not the other one i don't i don't think there's any case that cited before this course and i have found no precedent that if there are multiple substances and one is a pollutant that dispositive of the issue so the underlying case that where you say there's a good a defendant says our pigs were harmed the swine were harmed because there were two substances in there and you're saying well one of the substances wasn't present but you're conceding that the other substance was and so i guess my question is why can't then out of the terms of the policy say well you know what the pigs were harmed by a contaminant it's now completely you know undisputed allegations are that there was some of that and that's that's what we're getting at i think you're confusing the merits with the duty to fact which are different under minnesota law i agree judge again but when you look at what's actually contained in the complaint it doesn't say that it was because of it just says that there was and they use the reason i think that this that the case was dismissed was because they use the word contaminate they don't use it in the sense of the pollution exclusion when you look at the what the pollution exclusion says and what it's intended to provide for now i agree that that minnesota is in the minority of jurisdictions here with regards to what a pollution exclusion is supposed to prevent when you look at the majority opinions it's supposed to prevent coverage for what we typically think of as pollution here which would this would not fall under this is a case in which there is a product the salish said which is not classified by any governmental agency is a pollutant it can actually safely be fed to swine it can and when you look at what is in compass by the pleadings there is actual literature saying that but you know in your brief it it's suggestive that you want us to somehow undermine the minnesota supreme court's decision i sat on that case i think i even wrote separately in that case and it's pretty clear that the absolute pollution exclusion under minnesota law does not require all of the things that you're talking about e p a i mean actually the f d a has apparently said that that this is a should be fed this chemical should be fed to swine so you sort of have you don't have an environmental contaminant you least have a government agency you're not suggesting that we up and minnesota law in any way or change minnesota law are you know i don't think you can know what i'm saying is that when you look at minnesota law and you look  at the plain language of the complaint under rule federal rule twelve see here the motion should have been denied this is not a case in which we can go and look at one of the prior cases that dealt with carbon monoxide or with some sort of pollutant this is an a new issue and what should have been done here was the complete the motion to dismiss should have been denied and there could have been open your expert opinions in this context does this constitute a pollutant in this context when it can be safely and the that's part of it there's two questions here there's the first part as to whether it constitutes a pollutant and there's a second question as to whether it was actually dispersed or not now when you look at the citation and the definition because that's not a specifically defined term by the policy we look to the plain meaning of the contre of the word and when you look at the definition that e m c itself cites it references what i believe to be an intentional act it says to cause to break up a new fashion percs complaint here did not allege that intentional act happened by restaurant recycling the definition is to cause to break up and then the example was police dispersed the crowd the police don't go someplace and accidently disperse a crowd they go there to intentionally disperse a crowd baron from new fashion parks complaint is intentionality requirement that was missing here so if i if i have a bowl of soup and i drop some household chemical in the bowl of soup  i haven't dispersed the household chemical into the soup under the plain meaning of disbursal i think you're intentionally doing that though in your example i've said i've stripped i trip and it goes into the soup and it gets into the soup or know that the chemicals are and somebody in the in the line doesn't know the chemicals in the fat but it gets dispersed into the fat these chemicals and i biopics in the by products that can't be a dispersal i think that's exactly why you buy insurance is for an intentional act that caused harm i mean that's why you buy insurance there's an intentional act provision that excludes it and if you look at the definition of occurrence versus the pollution exclusion i think that's clear i think that's why people bought businesses buy insurance just to provide protection for what you just described was an accidental act i do agree with you that's the response spectating argument that was made and walter his own definition is i believe requires an intentional act whether the court resolves either of those issues in our favor we would respectfully request that that the matter be remanded to the district court and i will unless the court has any other questions for me i would reserve my remaining time for a bottle thank you in twenty of our team the minnesota supreme court decided the case of midwest family versus walters and in that case the court said that it was adopting a non technical plain meaning approach to applying the absolute plain meaning exclusion to claims that arise out of the ordinary course of business like we have here and under a plain meaning approach to the absolute pollution exclusion you don't look to experts to define terms you look to the the plain meaning of the term contaminated and the plain meaning of dispersal and much of restaurant recycling is proving an argument to this court has been spent disputing the merits of the underlying liability case they dispute that there was any love was allo sit in the in the feed they dispute that that said is always a contaminant but this is a coverage action and coverage is determined by looking at the underlying liability complaint and the terms of the insurance policy coverage doesn't depend on whether what's being alleged in the underlying complaint is true or not and a motion for judgment on the pleadings would that work so say  allege that both of these contaminants were in there and you say one of them is at least one of them is a pollutant so the exclusion applies you don't have a duty to defend but then it turns out when the evidence is developed that one of the substances was not present and suppose that eliminated the exclusion then there would be coverage about point for the liability even though there was no duty to defend even if their  and on a motion for judgment on the pleadings that doesn't change the nature of a coverage action you still look two thousand are lined complain and the policy and restaurant recycling is argued that the court must accept at true that allegations in it action complaint that are denying liability that are saying well that isn't always harmful there was no one's fellow said in the feed even though if you accept those allegations as true that doesn't create a material issue  fact about coverage and this is a coverage action a material issue a fact about coverage is looking at the liability complaint and the terms of the insurance policy and in this case looking at the substantive issue of what is it up pollutant the policy of the absolute pollution exclusion applies to property damage which would not have occurred in whole or part but for pollutants and the whole or in part language means exclusion applies when a pollutant is at least a part cause of the damage and here it's alleged that last few new oil is a part cause of the damage every together so based on the allegations of the complaint it's alleging an undisputed pollutant caused damage in part we're suppose we have the same the same litigation strategy that we have before us but the underlying complaint in the in the other action than the newport whatever that the plaintiff here the underlying plaintiff says i'm not quite sure what caused my my pics to die but i think it was that is a little different factual scenario but that still would have been alleging that lask enjoy in part caused the damage and in williams late there with the allegation was that radium an alpha particles and and another chemical cause damage in the courts between radium and alpha particles we don't need to decide if alpha particles is a pollutant because radium is a pollutant and where you have radium you have alpha particles click case to the pollution exclusion didn't apply to exclude all the causes of damage because some of the damage was caused by pollution that wasn't released into the atmosphere but the court said the pollution exclusion precludes  indemnify because the damage was caused in part by a pollutant released into the atmosphere and if the court wants to move on i mean if the court could decide the pollutant issue based on the whole or and part contaminant in the underlying complaint the plain meaning of contaminated is one that contaminates it makes impure by contact or a mixture and the underlying complaint alleges twenty two in twenty two not generally recognized as safe so you can infer that in some instances it can be safe but in this case the underlying complaint is alleging that it is not if there's no allegation alleging that it was safe and restaurant recycling also kind of glom on to some buzzwords and says underlying complaint needs to use the word illegal or unsafe level in order to be a contaminant and there's no requirement  to use any specific word in the underlying complaint to fall within the definition of a contaminated you consider if the complaint is alleging that the los alamos did made the fat product impure by contact or mixture and it is and one thing to note in the williams case the underlying complaint is not use the word go which restaurant recycling says that it did it did not use the word illegal that is something that a circuit concluded that radium was an illegal substance based on the allegations that it exceeded the maximum contaminant level and that radium was a contaminant and the court reached the logical conclusion that it illegal substance in that case and it's based on the fact that the underlying complaint is alleging damage caused by a pollutant the next issue is whether it's alleging  spread widely there are some key points about the absolute pollution exclusion language to keep in mind when considering if there's been a dispersal here one is that the absolute pollution exclusion says nothing about by the insured the dispersal can be done by anyone you have any idea council how how the these the antibiotics and the end of addict by products got into the fat was it because it was fed to the animals t recycling which then mixed it into its fat product is it didn't know that it was in the fat product and there's there's been a recall all up and down the supply chain so it really is analogous to my to my analogy which is that you've got a bowl of soup and you introduce something else into that bolus to perhaps unintentionally and it finds its way in there and the question is whether that's dispersal yes i would agree and i i don't think that the absolute pollution exclusion requires any intent there is no case law that has required intent to establish a dispersal but even if it would require intent it doesn't require intend to disperse a pollutant and even restaurant recycling admits that in its reply brief it says that in the hanssen case there was intent to disperse because you intend to open and close a window you don't do that by accident while here or there was intent to mix the fat product in the soil together that wasn't an accident  but again the definition the plain meaning of dispersants and the dictionary definition says nothing about intent and restaurant recycling tries to create this intent argument by looking at the word t pollution exclusion have contain a sudden accidental exception in them which negates the fact that the inclusion of the word dispersal itself is meant to require intent and looking at the fat product and that new fashion pork blended the contaminated fat product with other ingredients to make swine feed and the allegation a blending and mixing the  court from nineteen ninety eight it says the words of the complaint not precisely match the words of the policy you look to what's being alleged and you consider if there's any way that you know does it fall within the plain meaning of these definition s and i just want to reemphasize and close that the minnesota supreme court has decided this case in the walters decision and that is the binding precedent before this court today and it's decided that minnesota meaning approach it doesn't look to expert testimony there's no need for a dispute about the merits senate coverage action and i would ask on behalf of you see that judge dodi's decision be affirmed as a matter of law so to the extent that there was any dispersal it was not by restaurant recycling it was by an entity further up the chain of command is it spilled into it was i mean is there any evidence on how it happened there is not a for this court if you look at a nine of the of the appendix in our original complaint page eighty nine of the appendix we give the line of the chain and we state that it was we believe that was dispersed it was by somebody further up the chain of command from us that we didn't know about we didn't and you think it needs to be rough for recycling that does the dispersal not somebody else higher up in the supply chain i do because it's a contract between russia and recycling in  that because some other person's wrongful action is somehow going to bind restaurant recycling i think that flips on its head the privity between the parties that read out though they at any time in other words it says dispersal etc at any time that that's excluded is that there's your argument read out the at any time point and i think i think that when you read that contract between the the party in the insurance company it's seeking to exclude coverage for a dispersal that the party that they're insuring actually did not something that was unintentional through this chain of command that somehow got introduced into it improperly i don't think it does i think that that  exactly the privity between the parties here and i think when you the council could contract they could contract there was no coverage for injuries caused by pollution emanating from a third party if they want to contract for that they could they could but it did not a matter of privity it's a matter of what is the scope of the exclusion i think your honor though on in your question you're adding a provision to the contract that doesn't exist it doesn't say polluting i don't respect for i don't think that that would be good live if any at any time any party that does anything could somehow bar your insurance coverage i don't think that that that that's good law i think when  why i'm just asking why that well you're buying insurance coverage for a specific purpose and if you're the party that's actually doing the pollutant i agree then at that point you should not get coverage but if you're a party who did not disperse this pollutant you should have the coverage under the contract that you you were provided by e m c and i know that my time is up now if listeners any other questions thank you your honor sir right thank you very argument both counsel the case is submitted and the court file an opinion and due course that concludes the argument calendar for this morning the court be in recess until nine o'clock tomorrow