In the

United States Court of Appeals

For the Seventh Circuit

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No. 03-4164

HOUSING AUTHORITY RISK

RETENTION GROUP, INC.

Plaintiff-Appellee,

v.

CHICAGO HOUSING AUTHORITY,

Defendant-Appellant.

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Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 4474—Rebecca R. Pallmeyer, Judge.

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ARGUED MAY 28, 2004—DECIDED JULY 28, 2004

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Before BAUER, RIPPLE, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge. Defending oneself from a largescale class action lawsuit is a costly task. And so it comes as

no surprise that these two parties are before us to determine who should foot the bill for the defense of a 1999

lawsuit filed by approximately 10,000 current or former

Chicago Housing Authority (CHA) residents who claimed

they have been exposed to and harmed by environmental

contaminants while living on CHA’s public housing property. The Housing Authority Risk Retention Group, Inc.

(HARRG), a risk retention group made up of various hous-
2 No. 03-4164

ing authority members, asserts that it has neither the duty

to defend nor indemnify CHA in the underlying environmental litigation.

HARRG provided commercial general liability coverage to

the CHA from June 1, 1987, through July 31, 1998, under

separate annual policies. Each of the policies provided,

among other coverage, coverage and defense for “bodily injury” claims subject to a limit of $5 million per occurrence

per policy year. Bodily injury, included, among other things,

sickness, disease, death, mental anguish, and mental injury,

and HARRG does not dispute that the class action plaintiffs’

allegations of bodily injury and mental anguish fell within

this definition. HARRG filed the underlying action against

CHA seeking a declaratory judgment that it has no duty to

defend or to indemnify CHA with respect to the underlying

litigation, because, as HARRG argues, the claims asserted

by the plaintiffs in the underlying class action are not

covered by the policy.

The district court concluded that the policy language included what amounted to an “absolute pollution exclusion,”

that is, an exclusion that bars coverage for all claims for

pollution, whether or not the contaminants originated on

the insured’s property, and consequently granted HARRG’s

motion for judgment on the pleadings. Housing Authority

Risk Retention Group, Inc. v. Chicago Housing Authority,

No. 02 C 4474, slip op. at 7, 16 (N. D. Ill. Sept. 30, 2003).

CHA objects to the district court’s finding and further

argues that the district court failed to address potential

injury claims arising out of off-site exposure, did not

address claims that the CHA improperly sited Altgeld

Gardens, and did not address claims arising from “environmental discrimination,” and other nontraditional environmental claims. To the contrary, these claims were adequately addressed when the district court concluded that

the insurance policies contained an absolute pollution
No. 03-4164 3

exclusion which applies regardless of the origin of the pollution

or the identity of the polluter. Id. slip op. at 7. Furthermore,

after considering all of the claims, the district court concluded that the “the type of pollution alleged in the underlying litigation does constitute ‘traditional environmental

contamination,’ ” to which the absolute pollution exclusion

would apply. Id. slip-op. at 11-12.

Because the district court issued a thorough and wellreasoned memorandum opinion and order, we adopt the

reasoning of the district court’s September 30, 2003 Memorandum Opinion and Order addressing those claims

challenged on appeal and AFFIRM the judgment of the

district court. A copy of the district court’s order is attached.
21 No. 03-4164

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—7-28-04