Opinion ID: 1989584
Heading Depth: 2
Heading Rank: 5

Heading: The purpose of the exclusion.

Text: The principal purpose of the absolute pollution exclusion, as we have seen, is not in substantial doubt. The predominant reason for drafting this exclusion for pollution-related injuries was to avoid the enormous expense and exposure resulting from the explosion of environmental litigation. Koloms, 227 Ill.Dec. 149, 687 N.E.2d at 81; Doerr, 774 So.2d at 127. [T]he purpose of the current [absolute] exclusion, like [that of] its predecessor, is to exclude governmental clean up costs from the scope of coverage. Koloms, 227 Ill.Dec. 149, 687 N.E.2d at 81 (quoting West American, 409 S.E.2d at 699) (internal quotation marks and brackets omitted); accord, Kerr-McGee Corp. v. Georgia Cas. & Sur. Co., 256 Ga.App. 458, 568 S.E.2d 484, 488 (2002) (purpose was to bar coverage responsibility for government-mandated cleanup under the Superfund for gradual environmental damages of any type) (numerous citations omitted). In Kent Farms, a man was severely injured while delivering fuel to the insured when a faulty valve in the fuel tank's intake valve caused a major leak. In holding that the absolute pollution exclusion did not apply to this accident, the Supreme Court of Washington succinctly synopsized the relevant history as follows: The qualified pollution exclusion clause, a precursor to the clause at issue here, came into existence so insurers could avoid the yawning extent of potential liability arising from the gradual or repeated discharge of hazardous substances into the environment. Waste Management of Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 698, 340 S.E.2d 374 (1986). Later, various forms of absolute pollution exclusion clauses, including the clause here, were incorporated into insurance policies in the wake of expanded environmental liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. [§§] 9601-9675 (1995) (CERCLA). See Queen City Farms, Inc. v. Central Nat'l Ins. Co., 64 Wash.App. 838, 827 P.2d 1024 (1992) (surveying the history of the clause). These clauses were clearly intended to exculpate insurance companies from liability for massive environmental cleanups required by CERCLA and similar legislation. See generally Jeffrey W. Stempel, Reason and Pollution: Correctly Construing the Absolute Exclusion in Context and in Accord with its Purpose and Party Expectations, 34 Tort & Ins. L.J 1, 5 (1998). The insurance companies' objective in creating both clauses was to avoid liability for environmental pollution. To read the absolute exclusion clause more broadly ignores the general coverage provisions. This exclusion clause does not deal with the discharge of substances that may also be pollutants directly onto (and into) an individual; rather, this clause specifically addresses those situations in which injury was caused by environmental damage. [32] We, therefore, hold the absolute pollution exclusion clause relates to environmental damage, and not to the facts of this case. 998 P.2d at 295 (emphasis added). The court went on to add: The exclusion, when viewed in the context of its purpose, does not apply merely because a potential pollutant was involved in the causal chain. Instead, the exclusion applies to occurrences involving the pollutant as a pollutant. Our approach is consonant with the understanding of the average purchaser of insurance and consistent with the provisions of the insurance policy as a whole; that is, the pollution exclusion clause was designed to exclude coverage for traditional environmental harms. We will not expand the scope of the exclusion clause beyond its intended purpose. Id. at 296 (emphasis in original). We agree with the foregoing analysis. In light of the timing of the introduction of the absolute pollution exclusion and the problem which it was designed to address, the reasoning of the courts in Koloms, Andersen, Western Alliance, Doerr, West American, and Kent Farms is persuasive. Moreover, as the court noted in Doerr, 774 So.2d at 127, there is no historical evidence suggesting that the exclusion was designed to achieve any other purpose; indeed, rather than disputing the history that we have summarized in this opinion, Nationwide and its supporting amicus, relying on rigorous plain language analysis, ask us not to consider history or context at all. We therefore follow Andersen, 757 N.E.2d at 333, and the other authorities we have cited, in holding that the purpose of the absolute pollution exclusion was to bar coverage for environmental degradation and for cleanups mandated by CERCLA and similar legislation.