On Behalf of | Apr 18, 2024 | Firm News

In Central Crude, Inc. v. Liberty Mutual Insurance Co., 51 F.4th 648 (5th Cir. 2022), the Court found that an absolute pollution exclusion precluded coverage for a claim involving the cost of cleaning up an oil spill on the insured’s property when the evidence indicated that the insured might not have been responsible for the leak because a possible source of the leak was natural seepage of oil from the ground.

The Court, interpreting Louisiana law, found that the imposition of a fault requirement for application of a total pollution exclusion for environmental pollution cases would run contrary to the Louisiana Supreme Court’s instruction in Door v. Mobil Oil Corp., 774 S.2d 119 (La. 2000) where the Supreme Court found that pollution exclusions had to be read in accordance with their general purpose “to exclude coverage for environmental pollution.”

In Door, the Louisiana Supreme Court had limited the total pollution exclusion to traditional environmental pollution in holding that the exclusion did not preclude coverage, as a matter of law, for municipal water department’s failure to filter petrochemicals from the Mississippi River out of residents’ drinking water.