Restaurant Recycling, LLC v. Employer Mutual Casualty Co.

Summary

The Eighth Circuit held that a total pollution exclusion in a commercial general liability policy barred coverage for property damage caused by contaminated animal feed, even though the insured did not intentionally disperse the pollutant. Applying Minnesota’s plain-meaning approach, the court ruled that the unintentional blending of lascadoil (a conceded pollutant) into fat products and then into swine feed constituted a “dispersal” of pollutants under the policy. The insurer therefore had no duty to defend or indemnify the insured against the underlying lawsuit. The case addresses the scope of pollution exclusions, the definition of “dispersal,” and the duty to defend under Minnesota law.

Holdings

1. The total pollution exclusion applies because the allegations of damage from the dispersal of lascadoil, a pollutant, trigger the exclusion. The presence of another substance (lasalocid) does not defeat the exclusion if the pollutant caused some measure of damage.
2. The exclusion is not limited to intentional acts. The passive voice does not require the insured to cause the dispersal, and the ordinary meaning of dispersal does not require intent. Additionally, limiting the exclusion to intentional acts would render the 'dispersal' language superfluous, as intentional acts would not be covered occurrences under the policy's general grant of coverage.

Questions Presented

1. Whether the total pollution exclusion in the insurance policy applies to bar coverage for claims arising from contamination of fat products with lascadoil, a conceded pollutant.
2. Whether the term 'dispersal' in the pollution exclusion requires an intentional act by the insured.

Disposition

affirmed