I know that policyholder counsel can get angry with some decisions that conclude that no coverage is owed for a claim where they strongly believe otherwise. But there are some decisions where I imagine their anger going to a next level.  They are reading the decision, seeing where the court is going, coverage is found not to be owed, their face gets red and then – boom.  Their head explodes. 

I suspect that the Wisconsin federal court’s decision in Great Am. Ins. Co. v. R.J. Schinner Co. Inc., no. 21-1018 (D. Wis. Dec. 1, 2023) is a head-exploder for some on the policyholder side.  

It’s Sunday morning. I have a lot to do today.  And I want to be finished by 4:00 for the Eagles-Niners game. [Monday update: UGH!]  So I’ll the court’s words do the work.  It’ll get the point across.

Facts: “Schinner is a Wisconsin corporation that sells paper, plastic, and Styrofoam products as well as cleaning supplies on the redistribution market.  In addition to its Wisconsin headquarters, Schinner maintains 18 warehouses nationwide. The warehouse at the center of this litigation was located in Nashville, Tennessee, about 25 yards from Mill Creek, a tributary of the Cumberland River.

“Between March 27 and 28, 2021, Nashville experienced historic flash flooding that damaged over 500 homes and businesses and left six people dead. Schinner’s warehouse was among the infrastructural casualties. Mill Creek overflowed and toppled one of the warehouse’s cinder block walls.  This begat an ‘almost incomprehensible’ debris field.  Plastic coated every inch of the 20-foot trees lining the riverbank.  Pizza boxes, straws, and bags festooned miles of dense vegetation.”

Coverage dispute arises: Schinner and its insurers argued whether Schinner’s policies provided coverage for the arduous and expensive clean-up.  When the dust settled, one issue before the Wisconsin federal court was the potential applicability of the pollution exclusion in a Great America excess liability policy.

Pollution exclusion decision: As liability policies go, there was nothing unusual about the GAIC excess policy’s pollution exclusion nor the policy’s definition of pollutant. 

The court held that the pollution exclusion served to preclude coverage.  There were several reasons provided, but I’ll set out the following:

“Putting financial consequences of the answer on the parties aside, it is hard to fathom how any reasonable insured would consider this scene [Note: the court included pictures] to depict anything other than a river marred by pollutants. The massive amounts of paper and plastic products blown from the warehouse and coating the river’s banks and the surrounding vegetation are pollutants within both the normal meaning of the term and as defined in the endorsement.

“This commonsense conclusion is consistent with the generally understood meaning of pollution. The deposit of solid waste and plastics into and along our nation's waterways, like that shown in the photos, is a form of water pollution. See, e.g., Water Pollution, Wikipedia, https://en.wikipedia.org/wiki/Water_pollution (Oct. 5, 2023). That the contents of the debris field are visible to the naked eye, or ‘macroscopic,’ does not render them any less pollutants than the unseen ‘microscopic’ chemicals contaminating a river as a result of an accidental oil spill. In determining whether a contaminant is a pollutant, size does not matter.”

***

“As explained in Wilson Mutual, the context of the insurance claim is key. Thus, the debris from Schinner’s warehouse would not be a pollutant if it remained in the warehouse. But once it was washed away by the flood and scattered in and around Mill Creek it became a pollutant. In other words, while pizza boxes, straws, and bags are not pollutants when awaiting shipping in a warehouse, those same substances are pollutants when left on the banks of a waterway and when spilled into a river, caking its banks and nearby vegetation. Like manure or linalool, the products that make up the debris field have beneficial uses, but in the context of being strewn across land and water where they do not belong, they are pollutants.

“Indeed, Schinner likens the debris removal to ‘picking up litter on a roadside.’  This comparison is apt and supports application of the exclusion.  Littering causes pollution. Indeed, national public service campaigns have long been dedicated to stopping pollution, with a clear emphasis on littering. See Harald Fuller-Bennett & Iris Velez, Woodsy Owl at 40, Forest History Today, Spring 2012, at 22, 23 (‘The film, an antipollution public service announcement, featured scenes of litter and pollution and ended with . . .’Give a hoot, don’t pollute.’). Plastic pollution, in particular, is a widely recognized issue, with the United Nations Environment Assembly recently adopting a resolution to ‘develop an international legally binding instrument on plastic pollution . . . by the end of 2024.’ World Environment Day Brings Solutions to Plastic Pollution Into Focus, UN Environment Programme (June 5, 2023), https://www.unep.org/news-and-stories/press-release/world-environment-day-brings-solutions-plastic-pollution-focus.”

I seems that Schinner did itself no favor by likening the debris removal to “picking up litter on a roadside.”

I have a sense that policyholder counsel are not convinced that the pollution exclusion applied here, based on that 1970s anti-littering ad campaign -- which I completely remember as a kid, including the song - where Woodsy Owl said “Give a hoot, don’t pollute.”

Woodsy can be viewed here: https://www.youtube.com/watch?v=gZB7gSQRIuM

[If you get the song stuck in your head, sorry.]