State of California v. Allstate Ins. Co.

This case arises from efforts by the State of California (State) to obtain insurance coverage for property damage liability imposed in a federal lawsuit as a result of discharges from the “Stringfellow Acid Pits,” a State-designed and -operated hazardous waste disposal facility in Riverside County. The trial court granted summary judgment to four of the State’s excess insurers, and the Court of Appeal reversed. The case presents several issues regarding application of pollution exclusions in comprehensive general liability policies: (1) In determining whether the “sudden and accidental” discharge exception to the policies’ pollution exclusion applies, is the proper focus on the initial deposit of chemical wastes into storage on the site or, instead, on the escape of pollutants from the site into the larger environment? (2) Does whether an absolute exclusion for pollution of a “watercourse” applies to a 1969 overflow, in which polluted runoff ran down a creekbed, present a triable issue of fact? (3) Does whether an emergency release of polluted runoff in 1978 was “accidental” present a triable issue of fact? (4) If triable issues exist as to whether some, but not all,…