ACL Technologies, Inc. v. Northbrook Property & Casualty Insurance

I. Introduction

Insurance claims arising out of leaking underground storage tanks raise the question of who will pay for the cleanup of millions of tons of toxic waste produced in the United States since World War II. This problem has sparked a legal war that has raged in both federal and state courts from Maine to California. (See Northern Ins. Co. v. Aardvark Associates (3d Cir. 1991) 942 F.2d 189, 191 ; see also Avondale Industries, Inc. v. Travelers Indent. Co. (2d Cir. 1989) 887 F.2d 1200 , 1201 [“the vast carelessness that created the conundrum of hazardous waste . . . will not be quickly or easily remedied”].) Much of the strife has focused on the precise issue of whether the “sudden and accidental” exception to the pollution exclusion contained in the 1973 version of the standard comprehensive general liability insurance policy (CGL) allows for coverage for pollution which escaped gradually.

This case, like many throughout the country, involves a claim for expenses to clean up pollutants which leaked from rusted and corroded underground storage tanks. The trial judge found the release of the pollutants was gradual. He therefore held, among other things, that the…