The U.S. Court of Appeals for the Eleventh Circuit, affirming a decision by the U.S. District Court for the Middle District of Georgia, has ruled that a pollution exclusion in a commercial general liability insurance policy precluded coverage of a claim by an employee who developed an occupational disease known as welder's lung.
The Case
For 22 years, John Flowers worked as a rail carman for Sandersville Railroad Company, which operated a short line railroad in Georgia. Mr. Flowers maintained a fleet of rail cars and spent much of his time welding.
In 2012, doctors diagnosed Mr. Flowers with a lung disease called siderosis, or welder's lung.
He made a claim to Sandersville in January 2013 and later brought suit under the Federal Employers' Liability Act. Mr. Flowers alleged that his disease had been caused by occupational exposure to welding fumes containing iron – an allegation disputed by neither Sandersville nor Evanston Insurance Company, which had issued a commercial general liability (“CGL”) insurance policy to Sandersville.
When notified of Mr. Flowers' claim, Evanston issued a reservation of the right to decline coverage based on the pollution exclusion in its CGL policy.
Sandersville settled the Flowers claim without contribution from Evanston, and Evanston asked a federal district court in Georgia for a declaratory judgment regarding its duty to defend.
The district court held that the pollution exclusion barred coverage. The district court interpreted Georgia case law as broadly applying similar pollution exclusion clauses beyond traditional environmental pollution claims. The district court found as a matter of law that siderosis resulting from the inhalation of welding fumes qualified as an injury arising out of the release, escape, or dispersal of a pollutant.
Sandersville appealed to the Eleventh Circuit.
The Evanston Policy
The Evanston policy excluded coverage for bodily injury:
arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants”
, defined as:
any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.The Eleventh Circuit's Decision
The circuit court, applying Georgia law, affirmed.
In its decision, the circuit court found that the pollution exclusion “unambiguously exclude[d] coverage” of Mr. Flowers welder's lung claim.
The Eleventh Circuit pointed out that Mr. Flowers alleged that his injury arose from inhaling welding fumes, which contained iron particles. The circuit court reasoned that under the policy's absolute pollution exclusion, welding fumes “unambiguously” qualified as an “irritant or contaminant, including . . . fumes.”
The circuit court was not persuaded by Sandersville's argument that, even if welding fumes, carbon monoxide, and lead-based paint were pollutants, the pollution exclusion was not satisfied because the pollutants did not lead to injury through their discharge, dispersal, seepage, migration, release, or escape.
The Eleventh Circuit noted that the Georgia Supreme Court had expressly rejected a limited view of pollution exclusion clauses and said that it had to “follow suit.”
Accordingly, the circuit court ruled, lung disease caused by the inhalation of fumes released by welding fell within the terms of the pollution exclusion.
The case is Evanston Ins. Co. v. Sandersville Railroad Co., No. 17-14487 (11th Cir. Feb. 8, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].