{"id":903554,"date":"2024-11-12T14:14:50","date_gmt":"2024-11-12T21:14:50","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903554"},"modified":"2024-11-12T14:15:04","modified_gmt":"2024-11-12T21:15:04","slug":"pollution-exclusion-climate-change-law-barre","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/pollution-exclusion-climate-change-law-barre\/","title":{"rendered":"Hawaii Supreme Court Finds Climate Change Lawsuit Barred by \u201cPollution Exclusion\u201d"},"content":{"rendered":"\n

Jason Taylor | Traub Lieberman<\/a><\/p>\n\n\n\n

On October 7, 2024, the Hawaii Supreme Court answered the question of whether an \u201caccident\u201d includes an insured\u2019s reckless conduct in emitting harmful greenhouse gases (\u201cGHGs\u201d) and whether such emissions are \u201cpollutants\u201d as defined in a general liability policy\u2019s pollution exclusion<\/a>. In\u00a0Aloha Petro., Ltd. v. National Union Fire Insurance Co. of Pitt., PA, No.<\/em>, 2024 Haw. LEXIS 179 (Oct. 7, 2024), the Hawaii Supreme Court answered in the affirmative as to both certified questions from the United States District Court for the District of Hawaii, holding that an insured\u2019s reckless conduct can be an \u201caccident\u201d and that GHGs are \u201cpollutants\u201d under the policies\u2019 pollution exclusions.<\/p>\n\n\n\n

In the underlying case, the County of Honolulu and the County of Maui (the \u201cCounties\u201d) sued Aloha Petroleum, Ltd. (\u201cAloha\u201d) and several other fossil fuel companies for climate change-related harms. Namely, the Counties alleged that the fossil fuel industry knew that its products would cause catastrophic climate change, and rather than mitigating their emissions, defendants concealed such knowledge, promoted climate science denial, and increased their production of fossil fuels. Aloha was allegedly on notice that its products caused harmful climate change through its former parent company, Phillips 66, and its current parent company, Sunoco. Given this knowledge, the District Court determined that the Counties allegations constituted reckless conduct by Aloha.<\/p>\n\n\n\n

Aloha demanded a defense in these suits from National Union Fire Insurance Company of Pittsburgh, PA and American Home Assurance Company, both subsidiaries of American Insurance Group (AIG). The policies were standard commercial general liability (CGL) policies issued between 1984-1989 and 2004-2010, which generally defined an \u201coccurrence\u201d as \u201can accident, including continuous or repeated exposure to substantially the same general harmful conditions.\u201d The policies also included \u201cpollution\u201d exclusions, which while varied, generally precluded coverage for \u201cproperty damage\u201d which would not have occurred in whole or part but for the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of \u201cpollutants\u201d at any time.<\/p>\n\n\n\n

As to the first question, the Hawaii Supreme Court found that Aloha\u2019s reckless conduct in allowing damaging emissions and concealing knowledge of the resulting harm can be an \u201caccident.\u201d According to the Court, recklessness does not involve intent or expectation of injury, and therefore, is a covered occurrence under the policy. Thus, an insured\u2019s awareness of a possible or probable risk can be an \u201caccident,\u201d unless or until the risk crosses the line into \u201cpractical certainty\u201d where it is no longer accidental. The Hawaii Supreme Court also found that recklessness fits within the plain meaning of \u201caccident\u201d, namely, that it is an unfortunate event resulting especially from carelessness or ignorance, and does not necessarily involve a certainty or lack of fortuity.<\/p>\n\n\n\n

More notably, the Hawaii Supreme Court also found that the pollution exclusions barred coverage for emitting (or misleading the public about emitting) GHGs. The exclusions precluded coverage, in relevant part, when \u201cthe actual, alleged, or threatened\u2026 release\u201d of \u201cpollutants\u201d causes \u201cproperty damage.\u201d The policies defined \u201cpollutant\u201d as \u201cany solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.\u201d<\/p>\n\n\n\n

While the Hawaii Supreme Court\u2019s decision included a lengthy discussion of pollution-related issues, the Court ultimately identified five reasons to support its decision. First, the Court concluded that climate-heating gases are an example of \u201ctraditional environmental pollution\u201d that the pollution exclusion was designed to exclude. Second, following the plain-language reading adopted by some courts, GHGs fit the exclusion\u2019s definition of \u201cpollutant.\u201d The Court reasoned that Aloha\u2019s gasoline was found to have produced GHGs, which accumulated in the atmosphere and trapped heat, thus causing harm due to their presence in the atmosphere. Therefore, the Hawaii Supreme Court concluded that GHGs are \u201cpollutants\u201d encompassed within the pollution exclusion.<\/p>\n\n\n\n

Third, the Court found that the \u201clegal uncertainty\u201d rule did not trigger a duty to defend because uncertainty about the exclusion did not affect the outcome as GHGs were \u201cpollutants\u201d under any reasonable interpretation, according to the Court. Fourth, the Hawaii Supreme Court found that there was only one plausible interpretation of the exclusion, and therefore, no ambiguity in the policies\u2019 pollution exclusions. Finally, the Court rejected Aloha\u2019s claimed \u201creasonable expectation\u201d of coverage finding that the insured\u2019s expectation could not, and did not, stretch to encompass traditional pollution claims, which included those claims at issue before the Court.<\/p>\n\n\n\n

As climate-change related litigation continues to increase, carriers may increasingly look to similar \u201cpollution\u201d exclusions to bar or limit coverage. The Hawaii Supreme Court\u2019s decision is one of the first reported decisions by a State\u2019s highest court analyzing such issues and finding the pollution exclusion applicable to such claims. It will be interesting to see if other courts confronted with these issues follow suit.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Jason Taylor | Traub Lieberman On October 7, 2024, the Hawaii Supreme Court answered the question of whether an \u201caccident\u201d includes an insured\u2019s reckless conduct in emitting harmful greenhouse gases (\u201cGHGs\u201d) and whether such emissions are \u201cpollutants\u201d as defined in a general liability policy\u2019s pollution exclusion. In\u00a0Aloha Petro., Ltd. v. National Union Fire Insurance Co.… Continue reading Hawaii Supreme Court Finds Climate Change Lawsuit Barred by \u201cPollution Exclusion\u201d<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10721],"tags":[9895,22,530],"class_list":["post-903554","post","type-post","status-publish","format-standard","hentry","category-insurance","tag-advise-consult","tag-insurance","tag-pollution-exclusion","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nHawaii Supreme Court Finds Climate Change Lawsuit Barred by \u201cPollution Exclusion\u201d - 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