All posts tagged 'Comer v. Murphy Oil'

Whatever Happened to State Law Carbon Dioxide Liability Claims? Still No Music After Bell

October 27, 2013 07:30
by J. Wylie Donald
“Therefore, the Court declines to assert supplemental jurisdiction over the remaining state law claims which are dismissed without prejudice to their presentation in a state court action.”  So ends the last analytical paragraph in Native Village of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863 (N.D. Cal. 2009).  Thus, while plaintiffs’ federal common law carbon-dioxide-liability claims were extinguished on standing and political question grounds, state law claims could go forward should the plaintiffs choose to re-file.  Then, the Supreme Court decided American Electric Power Co., Inc. v. Connecticut, 564 U.S. __ (2011), and held a set of different plaintiffs’ federal common law claims were displaced by the Clean Air Act.  The Court specifically declined to rule on state law claims of the type at issue in Kivalina:  “None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.” Last fall we relied on Bell v. Cheswick Generating Station, 903 F. Supp. 2d 314 (W.D. Pa. 2012), out of the Western District of Pennsylvania as support for the proposition that state law nuisance claims were futile – preemption by the Clean Air Act doomed such claims.  The Third Circuit's recent review, while reversing the trial court, has not upended our conclusion. In Bell, 1500 neighbors of the 570 megawatt coal-fired Cheswick Generating Station operated by GenOn Power Midwest, L.P. became annoyed by ash and other contaminants allegedly settling on their property.  And so they brought a class action under Pennsylvania state tort law.  GenOn defended based on the comprehensive regulation of the Clean Air Act, which, it was asserted, preempted state law tort claims; the trial court agreed. On appeal, however, broad preemption by the Clean Air Act was not accepted.  The Court of Appeals acknowledged the comprehensive program established by the Act.  But it also recognized that Congress had specifically provided for a citizens suit provision, 42 U.S.C. § 7604, and that the Act contained two "savings" clauses.  The first, the "citizen suit savings clause," provided:   "Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any emission standard or limitation or to seek any other relief (including relief against the Administrator or a State agency)."  42 U.S.C. § 7604(e).  The second, the "states' rights savings clause," stated:  "Except as otherwise provided ... nothing in this chapter shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution ...."  42 U.S.C. § 7416.  Read together, a more restrictive state law could be enforced in a citizen suit. This idea was consistent with the Cheswick Generating Station's permit:   "Nothing in this permit shall be construed as impairing any right or remedy now existing or hereafter created in equity, common law or statutory law with respect to air pollution, nor shall any court be deprived of such jurisdiction for the reason that such air pollution constitutes a violation of this permit."   Could a citizen suit successfully address the ill-placed ash and contaminants?  The trial court said "no":  “Based on the extensive and comprehensive regulations promulgated by the administrative bodies which govern air emissions from electrical generation facilities, the Court finds and rules that to permit the common law claims would be inconsistent with the dictates of the Clean Air Act.”  But the Third Circuit said "yes."  Its primary authority was the Supreme Court's 1987 decision in International Paper Co. v. Ouellette, 479 U.S. 481 (1987), a Clean Water Act case where Vermont plaintiffs asserted a (Vermont) common law nuisance suit in Vermont state court, where the pollution originated from a  New York facility.  To quote:  The Ouellette Court found that the Clean Water Act's savings clauses clearly preserved some state law tort actions, but that the text of the clauses did not provide a definitive answer to the question of whether suits based on the law of the affected state were preempted. 479 U.S. at 492, 497. However, it found definitively that "nothing in the [Clean Water Act] bars aggrieved individuals from bringing a nuisance claim pursuant to the laws of the source State." Id. at 497 (emphasis in original). The Court reasoned that, "[b]y its terms the Clean Water Act allows States . . . to impose higher standards on their own point sources," and "this authority may include the right to impose higher common-law as well as higher statutory restrictions." Id. (internal citation omitted). The Court acknowledged that a source state's "nuisance law may impose separate standards and thus create some tension with the permit system," but explained that this "would not frustrate the goals of the Clean Water Act," because "a source only is required to look to a single additional authority, whose rules should be relatively predictable." Id. at 498-99. Thus, a suit by Vermont citizens would not be preempted if brought under the law of New York, the source state. But, GenOn argued, the Clean Water Act and its savings clauses are distinguishable from the Clean Air Act and its savings clauses.  Not so said the court; "a textual comparison of the two savings clauses at issue demonstrates there is no meaningful difference between them."  Accordingly, the Bell plaintiffs, who brought suit as “Pennsylvania residents under Pennsylvania law against a source of pollution located in Pennsylvania,” were not preempted. Now let’s return again to Kivalina.  The concurring opinion laid out the rule:   “Kivalina may pursue whatever remedies it may have under state law to the extent their claims are not preempted.”  Bell limits those claims.  Where Alaska natives sue in California a collection of greenhouse gas emitters from around the country, they would appear not to satisfy the requirement of emission-source-state-law-applies unless they are arguing that the nuisance rules of a score of jurisdictions must be considered.  In which case, their case falls apart for improper joinder.  And if they attempt to sue in multiple jurisdictions, they only amplify a fundamental flaw in their approach.  Whomever they sue has only contributed a tiny fraction of global greenhouse gases in either volume or over time and thus could not be the proximate cause of the Kivalina plaintiffs’ loss.  See Comer v Murphy Oil USA, Inc., 839 F. Supp. 2d 84 (S.D. Miss. 2012) ("[t]he assertion that the defendants’ emissions combined over a period of decades or centuries with other natural and man-made gases to cause or strengthen a hurricane and damage personal property is precisely the type of remote, improbable, and extraordinary occurrence that is excluded from liability.")  Carbon dioxide liability plaintiffs may attempt to rely on the Third Circuit's decision in Bell to attempt to revive their litigation fortunes.  From our perspective, such attempts still won't ring the bell. 

Carbon Dioxide | Climate Change Litigation | Supreme Court

Fifth Circuit Knocks Out Climate Change Liability Lawsuit Again

May 15, 2013 21:10
by J. Wylie Donald
Res judicata is one of those phrases learned in law school that seemed of limited utility. How often is someone going to bring the same claim twice?  Callow law students know little of the world.  The doctrine is frequently needed and, as was learned in law school, it can be used to dispose of a claim, even if the prior decision "may have been wrong or rested on a legal principle subsequently overruled in another case."  Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). On Tuesday, the Fifth Circuit applied the hoary doctrine to snuff out (again) the seven-year old climate change liability saga of Comer v. Murphy Oil USA.  Comer was filed immediately following Hurricane Katrina and asserted that a long list of energy companies were responsible for the increased destructiveness of the hurricane because of their emissions of greenhouse gases.  The trial court disagreed and dismissed the case on standing and political question grounds.  On appeal, however, the plaintiffs convinced an appellate panel of the Fifth Circuit  to reverse the trial court.  Defendants asked for rehearing en banc, which was granted, resulting in the vacating of the panel decision pursuant to court rule.  Then things got weird.  After the grant of en banc review, the en banc quorum then dissolved with an eighth recusal among the active judges.  With no quorum, the case could not be reviewed.  Because the panel decision was vacated, the trial court dismissal was valid. Plaintiffs chose not to appeal to the Supreme Court.  Instead they sought mandamus, which was denied.  Plaintiffs then decided to file their claim again, not only by the same plaintiffs on the same theories, but against the same defendants.  The trial court had no difficulty dismissing their claims a second time, relying on res judicata, but also on the statute of limitations, the political question doctrine, preemption, proximate cause and standing.  Another appeal was filed; this time the panel did not side with the plaintiffs.  Instead, it ignored all of the bases for dismissal articulated by the trial court and settled on only one:  res judicata. To apply, four elements must exist: (1) the parties are identical or in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions. Opinion at 7.  Only the third element was disputed.  The court held that the trial court's first judgment was a final judgment because, although the panel reversed, that decision was vacated and thus had no effect on the trial court's decision.  Nor did the decision to grant rehearing en banc, nor the Supreme Court's denial of the mandamus motion.  And the trial court's decision was on the merits, notwithstanding that it was a jurisdictional (standing and political question) determination.  Opinion at 10.  Accordingly, res judicata applied; the dismissal was affirmed. We expect that the precedential value of the court's decision will be limited.  However, its non-precedential value is huge.  A broad and expansive theory of climate change liability was asserted by well-funded and capable plaintiffs' counsel.  After a long journey it joined on the ash heap claims asserted by the State of California (California ex rel. Lockyer v. General Motors), claims by various attorneys general and public interest groups (Connecticut v. American Electric Power), and claims asserted by a Native American community (Kivalina v. ExxonMobil) (albeit nursing a petition for certiorari to the Supreme Court).  Petrochemical companies, automobile companies, coal companies and electric utilities are 4-0 on the climate change liability front, with no other cases out there.  The unanswered questions from Comer are the following:  Why didn't plaintiffs add new defendants?Why didn't plaintiffs assert state law nuisance claims in state court rather than pursue them in federal court?  Why didn't they appeal to the Supreme Court on the merits, rather than seek mandamus?  These questions are decisions on strategy, and we likely will never know. Last, however, and most importantly, where are the new theories of liability?  Bueller?  Bueller?  

Climate Change Litigation | Supreme Court | Utilities

The Third Climate Change Liability Suit Fights to Stay Alive: Plaintiffs in Kivalina v. ExxonMobil Seek Rehearing

October 7, 2012 14:21
by J. Wylie Donald
The plaintiffs in the climate change liability suit, Native Village of Kivalina v. ExxonMobil, won’t go quietly.  Last Thursday, Plaintiffs filed with the Ninth Circuit Court of Appeals a petition for rehearing en banc (Petition attached), seeking to reverse the appellate panel’s decision (“Panel Decision”) that the doctrine of displacement barred the plaintiffs’ claims for nuisance damages under federal common law.  In their petition the plaintiffs focus on the panel's conclusion, based on Connecticut v. American Electric Power, that the Clean Air Act displaced all federal common law claims relating to greenhouse gas emissions, regardless of the remedy sought.  But they also weakly address the concurrence's separate reasoning finding that the plaintiffs did not have standing, and the district court's original conclusion that the political question doctrine bars the claim. For those unfamiliar with the Kivalina case, it is one of the triumvirate of cases (with Connecticut v. American Electric Power and Comer v. Murphy Oil USA) that are shaping the climate change liability legal landscape.  The plaintiffs in Kivalina assert that the defendants (electric utilities, oil companies and a coal company) are responsible for the emission of greenhouse gases that have caused the late freezing and early melting of arctic sea ice, which in turn permits arctic storms to erode the plaintiffs’ village that now lacks the sea ice’s protection.  The plaintiffs seek damages in the hundreds of millions of dollars.  The case was filed in the Northern District of California in 2007 and was dismissed in 2009; the dismissal was affirmed two weeks ago. And for those unfamiliar with en banc substance and procedure in the Ninth Circuit, it is unique.  Notwithstanding its name, an en banc hearing in the Ninth Circuit is not heard by the full court.  Instead, if 15 jurists (out of 29) vote to hear the case, ten judges are selected by lot to join the Chief Judge for the hearing.  See Fed. R. App. P. 35; Gen. Orders 9th Cir. §§ 5.1 et seq.).  If one does the math, it becomes apparent that even if a majority of the court concludes a case should come out a certain way, if six judges of an opposite mind are on the en banc panel, the law in the Ninth Circuit can vary from what the majority of the Ninth Circuit thinks the law should be. We now turn to the plaintiffs’ arguments: DISPLACEMENTPlaintiffs succinctly summarized their motion: "This case squarely presents the issue of whether a statute [e.g., the Clean Air Act] that displaces a federal common law cause of action for injunctive relief also displaces a federal common law damages action. Exxon Shipping [v. Baker, 554 U.S. 471 (2008)] answers this question in the negative and directly conflicts with the panel decision." Petition at 6.  The majority and the concurrence had ruled that, notwithstanding Exxon Shipping, Middlesex County Sewerage Authority v. National Sea Clammers Ass’n, 453 U.S. 1 (1981), provided that the remedy sought had no bearing on whether a claim was displaced.  To quote:  “where a federal common law nuisance claim for injunctive relief is displaced, a federal common law nuisance claim for damages claim likewise is displaced.” Panel Decision at 11663 (citing Middlesex County). Judge Pro noted in his concurrence a tension between Exxon Shipping and Middlesex County .  He wrote that Exxon Shipping suggests  “severing rights and remedies is appropriate as between damages and injunctive relief in some circumstances.” Panel Decision at 11665.  Plaintiffs contend that here are the right circumstances:  "in Exxon Shipping, the Supreme Court unambiguously held that a federal common law damages claim is not displaced by the Clean Water Act (“CWA”) – a federal environmental statute that, like the CAA, provides only injunctive relief and civil penalties – even though the CWA does displace a federal common law claim for injunctive relief." Petition at 1.  Their reasoning basically is that injunctive relief seeks the same result as a regulatory regime, and is therefore displaced.  “[T]he common thread running throughout the displacement cases is that the federal common law cannot create a parallel track with a regulatory regime established by Congress. Thus, in AEP the displacement holding, …, was expressly limited to injunctive relief claims seeking abatement of the nuisance. ‘We hold that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.’ Petition at 13 (citing AEP, 131 S. Ct. at 2537).  A claim for damages, on the other hand according to plaintiffs, has nothing to do with enforcement of standards.  “Kivalina does not seek to set emissions caps. It seeks damages.”  Id. at 13.  Judge Pro would disagree:  “By supplying a federal remedy Congress chose not to provide, this Court would not be “filling a gap,” it would be “providing a different regulatory scheme” than the one chosen by Congress. Panel Decision at 11671 (citation omitted). STANDINGPlaintiffs wrote:  “Judge Pro would have affirmed the dismissal for lack of standing.”  Petition at 17.  That is true, but he said it a little more forcefully:  ““[i]t is quite another [thing] to hold that a private party has standing to pick and choose amongst all the greenhouse gas emitters throughout history to hold liable for millions of dollars in damages.”  Panel Decision at 11676. Plaintiffs hardly address this point:  “Kivalina seeks damages, so redressability is easily satisfied.”  Id. at 18.  Don’t look for more analysis; there isn’t any.  Instead, there is a little sleight-of-hand.  Standing was granted to the plaintiffs in Massachusetts v. EPA to sue the federal government to enforce the Clean Air Act concerning carbon dioxide emissions.  Such standing is more difficult to achieve than standing in a simple suit for damages.  Hence, plaintiffs’ argument goes, if the plaintiffs had standing in Massachusetts, then it must be the case that plaintiffs in Kivalina have standing too.  Further, the “special assistance” provided by being a sovereign (as the Commonwealth of Massachusetts and other plaintiffs were) is not needed.  Plaintiffs are comparing apples and oranges.  A sovereign may have standing to sue another sovereign to enforce a law.  That simply has nothing to do with standing by a private party to sue another private party for damages.  POLITICAL QUESTIONThe trial court dismissed the Kivalina case on standing and also as a political question.  Plaintiffs contend that the “Supreme Court rejected the political question argument in AEP.”  We suppose that is technically correct.  A divided court affirmed 4-4 the Second Circuit’s decision rejecting application of the political question doctrine.  See AEP, 131 S. Ct. at 2535 & n.6.  But that hardly seems sufficient to convince the en banc court to permit rehearing. Likewise plaintiffs’ second argument, that a claim for damages lowers the bar for application of the political question doctrine, is barely made (five lines). Plaintiffs must be hoping that the en banc court will take up the Exxon Shipping – Middlesex County tension.  Their other arguments are insubstantial.  Regardless, it seems plain that the case is headed to a petition for certiorari to the Supreme Court.  Plaintiffs have identified a potential conflict in Supreme Court precedent.  If they lose, either because rehearing is not granted, or because rehearing is granted and the panel’s decision upheld, they have come too far to let the case go.  And if they win, defendants undoubtedly will seek a reversal by the Supreme Court, content ultimately to take their chances in state court, as we have previously suggested.     20121004 Petition for Rehearing, Kivalina v. ExxonMobil.pdf (76.64 kb)

Comer Resurgens: Life After American Electric Power v. Connecticut

July 7, 2011 10:23
by J. Wylie Donald
We thought last January, when the Supreme Court denied a writ of mandamus, that the long saga of Ned Comer through the courts had finally come to an end.  We were wrong.  At the end of May, the case, Comer, et al. v. Murphy's Oil USA, et al. (attached), was refiled in the Southern District of Mississippi.  Although predating the Supreme Court's June decision in American Electric Power v. Connecticut, one could be excused for concluding that it was filed afterward as it relegates federal common law to a sentence and instead is all about state law causes of action. But before we get into the resurgent Comer, we thought we would point out a June paper published by the Geneva Association, an insurance industry think tank.  One of the industries most affected by climate change is insurance. In Why Insurers Should Focus on Climate Risk Issues, Chief Climate Product Officer, Lindene Patton, outlines some of the risks and opportunities she perceives.   Her perspective is particularly worth considering as her employer, Zurich Financial Services, faces climate change issues across a broad spectrum of activities. (Ms. Patton notes, however, that the positions in the paper are hers alone.) Ms. Patton's views are insightful:  "society at large appears increasingly underinsured for the impacts of climate change at the time of its greatest need."  And they are ominous:  "Unless global societal risk management of climate change improves, the mismatch between the loss exposure and monies needed to cover economic loss associated with climate change-related severe weather events and other impacts will only become more extreme."  The solution she calls for is for insurance companies to take the lead to overcome the current "governance gap with respect to climate change policy."  Even without leadership, important social decisions can be made if the right price signals (i.e., premiums) are sent. Such signals can lead to "cogent risk management decision-taking" and assist in the spreading and management of climate change risks. An example of such price signals from an earlier period are the fire proofing of much of America as the result of the insurance industry's support of fire codes and the underwriting to go with them. The alternative to leadership in the marketplace is what Ms. Patton refers to as the frictional costs of litigation. In some cases those costs can be trivial, such as occurred with Y2K. In other cases, the outcomes can be devastating -- think asbestos and tobacco, on which insurers have paid, by some estimates, $150 billion and $750 billion respectively. Driving litigation in the climate change sphere is the relatively unknown fact of "a trend of decreasing percentage of insured loss when calculated as a percentage of damages from extreme weather events on an annualized basis."  Stated more simply, those harmed by hurricanes are not insured or are underinsured and the path to being made whole lies with a judge, not with an adjuster. The litigation path is not set out in black and white. Yet. But there are areas that may be fruitful for plaintiffs. Ms. Patton identifies SEC disclosure rules, fractional allocation (market share) schemes, and de minimus liability regimes as potential routes for "activist judges to find liability associated with" greenhouse gas emissions.  Regardless of the theory du jour, the ongoing injuries and displacement caused by climate change "may ultimately end up over a number of years in dedicated, repeated efforts by plaintiffs to find a legal theory that 'sticks' as happened in tobacco or asbestos." Which brings us back to Ned Comer and his protean and unvanquishable litigation.  All remember Hurricane Katrina; most will recall the lawsuit filed 20 days after Katrina made landfall.  In various iterations it sued insurance companies, mortgage lenders, oil companies, electric utilities, coal companies, and chemical companies; it alleged against all of the greenhouse-gas-emitting defendants responsibility for Katrina's "unprecedented" ferocity.  Its appellate travails are legend.  Following dismissal in the district court, and reinstatement by a Fifth Circuit panel, that decision was vacated when the Fifth Circuit accepted the case for en banc argument, and then dismissed the case when its quorum dissolved.  The petition for mandamus did not avail and everyone thought the case was gone. Everyone, that is, except Ned Comer's lawyers.  On May 27, 2011 Comer v. Murphy Oil USA, Inc. was re-filed.  It is a monstrous class action lawsuit with over 90 named corporate defendants - a crowd even larger than the earlier iterations of the case.  Like a Who's Who of particular industries, it alleges against classes of oil companies, utilities and coal companies, and chemical companies claims in three counts of public and private nuisance, trespass and negligence. But it also includes, almost as afterthoughts, a strict liability claim (¶ 36) and a conspiracy claim (¶ 41).  It concludes with a count for a declaratory judgment that federal law does not preempt state law claims. Ms. Patton's frictional costs are here in vast numbers.  As is her recognition that it is injury rather than an interest in climate change policy that provides the litigation incentive:  "Plaintiffs do not ask this Court to regulate greenhouse gas emissions or change national policy regarding climate change. Instead, Plaintiffs seek legal redress for the damages caused by these Defendants."  (¶ 11). Those damages are broad.  "[Plaintiffs'] homes and property were destroyed by Katrina's destructive winds and storm surge, which effects were increased in frequency and intensity by Defendants' emissions of greenhouse gases." (¶ 18)  "Plaintiffs' property also is damage[d] by sea level rise as a result of submersion and/or increased exposure to hurricanes. (¶ 19) "Plaintiffs' insurance premiums for their coastal Mississippi property have risen dramatically, and the resale values of their homes and property values have plummeted."  (¶ 20) The insurance premium allegation is thought-provoking.  Plaintiffs recognize that proving a particular defendant caused Hurricane Katrina will be difficult. Pleading in the alternative, they assert that the Defendants' greenhouse gas emissions "put Plaintiffs' property at greater risk of flood and storm damage, and dramatically increase Plaintiffs' insurance costs." (¶ 37) They link insurance company efforts to price climate change risk to increased premiums (Ms. Patton's risk-based price signals), and, because those "insurance costs attributable to global warming are distinct and quantifiable", they assert they are entitled to recovery. (¶¶ 38-40)  This theory of damages based on increased risk, rather than actual harm, bears watching. Ms. Patton concludes, "the AEP case only addresses nuisance cases and does not address broader theories under tort liability law.  A verdict for the defendants on the nuisance issue may not arrest the flow of cases and associated defence costs.  The plaintiffs bar may still continue to file demands and claims for other types of tort damages."  We would go further. With apologies to Atlanta, Comer Resurgens demonstrates that the conditional "may" is being replaced by the declarative "will." 20110527 Comer v. Murphy's Oil (re-filed) Complaint.PDF (796.31 kb)

Climate Change | Climate Change Litigation | Greenhouse Gases | Insurance | Supreme Court

AbCDE - Thoughts on an "Absolute" Carbon Dioxide Exclusion

October 27, 2009 17:28
by J. Wylie Donald
We trust that those of you following climate change litigation have heard the veritable tap dance of decisions emanating out of the federal courts in the last month.  First, Connecticut v. American Electric Power was reversed by the Second Circuit.  That was followed by the District Court for the Northern District of California dismissing Native Village of Kivalina v. ExxonMobil and rejecting the Second Circuit’s analysis.  The Fifth Circuit, not to be outdone, reversed the Comer v. Murphy Oil decision, but also provided a special concurring opinion where the judge advised that he would have affirmed on alternative grounds.  All of these cases are thoroughly discussed in the blogosphere. What has been less thoroughly ventilated, however, are the implications for insurance coverage for climate change liability claims.  We have discussed before the Steadfast v. AES coverage case filed in Virginia where the insurer seeks to avoid coverage for the Kivalina suit.  We thought originally that Kivalina’s dismissal might have made that suit go away.  However, with two climate change suits now headed back to the trial court (barring further appeal), we will be surprised if Kivalina is not appealed, and further surprised if Steadfast does not provide some law on climate change coverage. One subject that will not be addressed in Steadfast, however, is the efficacy of an "absolute"1 carbon dioxide exclusion.  Yes, you heard that correctly:  the AbCDE.  I regularly ask my insurer colleagues about their thinking on this and just as regularly am told that it is not in the works or even discussed.  The spoken reason is fairly straightforward:  if carbon dioxide is a pollutant under the terms of the policy, and damage from pollution is excluded, then claims arising from carbon dioxide emissions are already excluded by the so-called absolute pollution exclusion and the AbCDE is not needed.  The unspoken reason reflects the converse:  if a carbon dioxide exclusion is necessary, it must be the case that a policy without such an exclusion provides coverage for carbon dioxide liability - even if it has a pollution exclusion.  From an insurer’s perspective, that could be an expensive outcome and suggests a reason to avoid implementing the AbCDE.  History and policyholder experience suggest, however, a different outcome.  Many will recall the time when coverage for asbestos-related loss was hotly debated.  Where insurers lacked express asbestos exclusions, they sought refuge in pollution exclusions.  Success was mixed.  The New York Court of Appeals’ decision in Continental Casualty Co. v. Rapid-American Corp., 593 N.Y.S.2d 966 (N.Y. 1993), is typical.  Although the court concluded that asbestos could be a pollutant, irritant or contaminant within the meaning of the liability policy, it determined the policy’s pollution exclusion to be ambiguous in context and coverage for asbestos loss was found.  Ultimately, the insurance industry recognized the solution to its asbestos problems and decisions like Rapid-American was to adopt universally what is referred to by some as an absolute asbestos exclusion.  Just as with asbestos, there are infirmities in the pollution exclusion as applied to carbon dioxide (such as the doctrine of reasonable expectations, whether carbon dioxide is reasonably understood to be an irritant or contaminant, whether an agency’s classification of carbon dioxide as a “pollutant” has any relevance to a contract between two private parties, among others).  Indeed, one state supreme court has found that exhaled carbon dioxide was not a pollutant, and thus was not excluded by a comprehensive general liability policy’s absolute pollution exclusion.  Donaldson v. Urban Land Interests, Inc., 564 N.W.2d 728, 732 (Wis. 1997).  Unless carbon dioxide liability suits disappear (and the last month is not auspicious in that regard), it is inevitable that more coverage disputes will unfold and that policyholders will secure coverage victories in some cases.  Against the backdrop of those victories, can it be doubted that a carbon dioxide exclusion will take shape? 1We note that the term “absolute “ is somewhat of a misnomer for any exclusion.  A valuable discussion of this can be found at Ira Gottlieb, The Decline of the So-Called ‘Absolute’ Pollution Exclusion, Mealey’s Litig. Rep. (Feb. 12, 2002).

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