The Eastern District recently ruled, in a case of first impression, that odors emitted from a large livestock facility constituted a “pollutant” triggering the pollution exclusion in a general liability policy.
In the declaratory judgment action captioned as Travelers Prop. Cas. Co. of America v. Chubb Custom Ins. Co., 864 F.Supp.2d (E.D. Pa. 2012), the court granted general liability insurer’s motion for summary judgment declaring that the carrier had no coverage obligations to the livestock facility for bodily injury and property damage caused by noxious odors as alleged in the underlying action. The complaint alleged that pig excrement was collected in a cement pit beneath the structure where pigs were housed until the excrement was used as fertilizer. The underlying plaintiffs alleged that the operation produced “harmful and ill-smelling odors, hazardous substances and contaminated wastewater” that escaped onto the plaintiffs’ property causing bodily injury and property damage. The plaintiffs allegedly suffered nausea, vomiting, headaches, breathing difficulties, burning and irritated eyes, nose and throats. The fumes also interfered with the plaintiffs’ quiet enjoyment of their property.
The insurer sought the enforcement of the pollution exclusion and argued that the odor allegations qualified as a pollutant. The federal court agreed that the noxious odors produced by the pig excrement qualified as a “waste” within the meaning of the term “pollutant.” The policy defined “pollutant” to include “waste,” which included “materials to be recycled, reconditioned or reclaimed.”
The court also referred to the dictionary’s definition and held that the plain meaning of the term “waste” encompassed pig excrement. The dictionary defined “waste” as “superfluous material produced during or left over from a manufacturing process or industrial operation: material not usable for the ordinary or main purpose of manufacture;” another definition was “refuse from places of human or animal habitation” such as “garbage . . . excrement . . . [or] sewage.” The pig excrement constituted a material left over from a production operation that was to be reused; thus, the facts fell squarely within the definition of “pollutant.”
The livestock facility, in asserting coverage, argued that foul odor allegations were too ambiguous to qualify as a “pollutant.” However, when applied to the facts in the underlying action, the court recognized that the odors were not merely unpleasant smells perhaps common in a rural area. The odors were so noxious that they caused plaintiffs to experience physical ailments and rendered their homes unsuitable.
The court acknowledged that a substance need not be regulated by an environmental law to constitute a pollutant. But, here, the court recognized that large livestock operations, because of the large amount of animal excrement produced, are regulated through the Clean Water Act. Furthermore, underlying action alleged that the “sewage in the deep pit contain[ed] levels of nitrate hydrogen sulfide, ammonia, sulfate, afterbirth remnants and other hazardous substances” which constituted pollutants.
If you would like additional information concerning this insurance coverage case, please contact Taryn Kindred at Tkindred@kentmcbride.com or at (267) 702-1770.