The case before the Ninth Circuit asked whether the pollution exclusion applied to carbon monoxide poisoning. See Cent. Sur. Co. v. Casino West., Inc., 2012 U.S. App. LEXIS 56958 (9th Cir. April 6, 2012). The accident occurred in a Nevada casino and hotel owed by Casino West.
The fumes were created by a hotel's heater room which permeated into the deceaseds' rooms. Century issued a CGL policy to Casino West with a pollution exclusion, barring coverage for bodily injury arising out of the release or escape of "pollutants." The policy defined pollutants as "any solid, liquid, gaseous or thermal irritant contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste."
When Casino West was sued for wrongful death, Century refused to defend based upon the pollution exclusion. Century filed suit for a declaratory judgment. The district court denied Century's motion for summary judgment, determining the pollution exclusion was ambiguous. The district court reasoned that an ordinary policyholder may not reasonably characterize carbon monoxide from a motel pool heater as pollution.
The Ninth Circuit surveyed the different interpretations of the pollution exclusion. Some courts applied the exclusion literally because the terms were found to be clear and unambiguous when applied to carbon monoxide poisoning. Other courts limited the exclusion to situations involving traditional environmental pollution, either because they found the terms of the exclusion to be ambiguous or because they found that the exclusion contradicted policyholders' reasonable expectations.
Nevada had never decided the scope of the pollution exclusion. Therefore, the Ninth Circuit certified the following question to the Nevada Supreme Court: "Does the pollution exclusion in Century's insurance policy exclude coverage of claims arising from carbon monoxide exposure?"