In another policy-interpretation case this week, Atain Specialy Insurance Company v. Triple PG Sand Development, 2023 WL 2307647, a magistrate judge recommended that the Southern District of Texas hold that releasing materials and substances into Houston-area waterways and lakes did not amount to releasing “contaminants” so as to exclude coverage for related claims. In this multi-district litigation case, over 700 plaintiffs sued Triple PG for flooding damages occurring during Hurricane Harvey, alleging that Triple PG released “materials and substances” into Houston’s lakes and waterways as far back as 1954, causing their capacity to decrease over time and leading to the plaintiffs’ flooding damages. Triple PG’s insurer, Atain, filed a declaratory judgment action asserting that it did not need to defend Triple PG in those lawsuits by operation of its Total Pollution Exclusion. The Total Pollution Exclusion said that the insurance did not apply to bodily injury or property damage caused by or arising out of the discharge, release, or escape of pollutants. 

Atain argued that TPG’s slow clogging of the lakes and waterways constituted “pollution” that fell under the exclusion. The magistrate disagreed and said that the policy clearly defined “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalies…” focusing on the language that the material must be an “irritant or contaminant.” The plaintiffs in these cases alleged only silt, albeit ultimately harmful silt, but only silt, not irritants or contaminants. So, the Total Pollution Exclusion did not apply, and it was recommended that the Court abate the declaratory judgment suit until the state court suits were resolved.

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