In Travelers Property Casualty Co. v. Chubb Custom Ins. Co., No. 11-565 (E.D. Pa. March 30, 2012), the Court awarded summary judgment to two insurers on the grounds that coverage for the underlying lawsuit concerning odors from a "pig-raising operation" were barred by the pollution exclusions in the policies.
The pig-raising operation in question was the Sky View Sow Unit, a 2,800-sow production facility at which female pigs give birth to and raise baby pigs. At the facility, the pigs' excrement is collected in a large, cement pit directly beneath the structure where the pigs are housed. The pig wastes are periodically removed and deposited on nearby fields as fertilizer.
The neighbors of Sky View brought suit in federal court in Indiana, alleging that the sow facility produces "harmful and ill-smelling odors, hazardous substances and contaminated wastewater" that escape onto their properties causing personal injury and property damage. The plaintiffs alleged that the sow facility, together with the land application fields where the defendants dispose of millions of gallons of hog waste every hear, the contaminated runoff, and the facility's method of disposal of dead hogs, produces offensive and noxious odors which impair plaintiffs' use and quiet enjoyment of their properties and causes plaintiffs to experience sudden onset physical manifestations including nausea, vomiting, headaches, breathing difficulties, burning and irritated eyes, noses, and throats, and aggravation of other medical conditions.
The insurance policies both included pollution exclusions, which excluded coverage for harm arising from the insured's release or discharge of a pollutant. Both included the standard definition of "pollutant" as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed." Both policies included an Indiana-specific endorsement that amended the definition of pollutant to include "any such irritant or contaminant whether or not it has or had any function in your business, operations, premises, site or location . . . ."
Applying Pennsylvania law, the Court found it was undisputed that the complaint alleges bodily injury and property damage. The insureds, however, argued that the noxious odors were not a pollutant as that term is defined in the policies. The issue thus became whether the policies' definition of "pollutant" applies unambiguously to the noxious odors identified in the complaint.
Based on the policies' definitions and the common meaning of key terms as defined in dictionaries, the Court found that noxious odors produced by pig excrement (or waste) that cause bodily injury and property damage appear to fit squarely within the definition of pollutant under the policies. The Court found that the fact that the pig waste is spread over fields as fertilizer is of no moment, as "waste" includes materials left over from a production operation, and the policies' definition of pollutant expressly includes waste that is to be reused. The Court noted that several Pennsylvania cases have held allegedly noxious fumes constitute a pollutant triggering the pollution exclusion, e.g., fumes from a cement curing agent, carbon monoxide fumes emitted from a gas-powered saw, fumes from house-cleaning compounds, and fumes and runoff from a landfill.
The plaintiffs argued that simple odors cannot be pollutants, and that the allegation of foul odors is too ambiguous to be construed as a pollutant barring coverage. Further, they argued that in a rural setting, simple farm odors cannot be pollutants because such odors are commonplace. The Court rejected these arguments, on the grounds that the odors described in the complaint were not merely unpleasant, but were alleged to cause bodily injury and property damage. In addition, the Court fond that that "a pollutant does not cease being a pollutant simply because it is common to an area." Further, the Court identified numerous precedents from other jurisdictions which applied nearly identical definitions of "pollutant" to noxious odors. The Court also recognized that large livestock feeding operations are regulated through the Clean Water Act, because of the amount of animal excrement they produce.
Accordingly, the Court found that the pollution exclusions in the two policies unambiguously applied to the claims in the complaint, and that the insurers had no duty to defend or indemnify.