Environmental Law

Cooking Oil Dumped in Sewer May Not Be a Pollutant

By Damian Arguello

In a February 2008 post, we summarized the holding in Mountain States Mutual Casualty Co. v. Kirkpatrick, No. 06-cv-00221-WDM-OES. (See Commercial Waste is a Pollutant, Feb. 19, 2008). Essentially, the Hog's Breath Saloon & Restaurant dumped used cooking oil and other nontoxic waste into the sewer, clogging it. City workers clearing the clog succumbed to hydrogen sulfide gas trapped behind the clog and were severely injured. They sued the restaurant owner, Kirkpatrick, ultimately obtaining a $3.9 million judgment. 

Kirkpatrick's insurer, Mountain States Mutual, brought a declaratory judgment action against Kirkpatrick in Colorado federal court. The federal court held that the oil and waste were 'pollutants' as defined by the policy and therefore there was no coverage.

However, the Colorado Court of Appeals' unpublished October 2010 opinion in Roinestad v. Kirkpatrick essentially overruled the federal court's opinion. The injured city workers brought a separate garnishment action against Kirkpatrick and Mountain States Mutual in state court to recover their damages. Since the workers were not parties to the federal court action, that ruling did not bind them. The trial court in the garnishment action granted summary judgment in favor of Mountain States Mutual concluding, as the federal court had, that the pollution exclusion barred coverage. The Colorado Court of Appeals reversed.

Basically, the current 'absolute' or 'total' exclusion precludes coverage for claims caused by a release or discharge of a 'pollutant.'  'Pollutant' essentially means 'any solid, liquid, gaseous or thermal irritant or contaminant' and also includes waste, even if the waste can be reused. 

Citing various cases nationwide, the Court of Appeals noted that a literal interpretation of the exclusion could lead to 'absurd results,' becoming 'virtually limitless' to 'negate virtually all coverage,' for negligence and products liability claims. The court then held that cooking oil placed into a sanitary sewer was not unambiguously a discharge of a 'pollutant.'  The court also concluded that Kirkpatrick did not discharge the hydrogen sulfide that injured the workers. 

Whether the Court of Appeals' decision will stand remains to be seen – the Colorado Supreme Court granted certiorari on May 9, 2011. Whatever the outcome, the Supreme Court's decision will affect the application of the current pollution exclusion in a variety of toxic tort scenarios. Stay tuned . . .

Full post as published by Environmental Toxic Torts Blog on October 27, 2011 (boomark / email).