In State of California v. Allstate Ins. Co., 201 P.3d 1147 (Cal. 2009), the State of California attempted to obtain insurance coverage for property damage liability imposed in a federal lawsuit as a result of discharges from the "Stringfellow Acid Pits," a State-designed and–operated hazardous waste facility in Riverside County.

Starting in 1956 and over a 16-year period, more than 30 million gallons of liquid waste were deposited at the Stringfellow site. Although it was undisputed that underground leaks occurred at the site, the State identified two allegedly "sudden and accidental" discharges. First, in 1969, when heavy rains flooded the site and caused the ponds to overflow and send polluted water down Pyrite Creek, and second, in 1978, when another heavy rainfall nearly overflowed the ponds, the retention dam began to fail, and the State conducted controlled discharges from the ponds, releasing diluted waste down Pyrite Creek.

The trial court granted summary judgment for the insurers, and the State appealed. The Court of Appeal reversed with directions. The Supreme Court of California granted insurers' petition for review.