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Ill. Emissions Ruling May Hamper Policyholders, Experts Say


An Illinois appeals court's ruling that a Chubb unit has no duty to defend Medline Industries in 19 underlying suits for injuries allegedly caused by exposure to ethylene oxide could hobble the coverage aspirations of companies facing similar actions over long-term emissions, some legal experts say.


An important nuance in the dispute between MedLine and Illinois Union, which reached a boiling point in 2019, is that it involved a pollution liability policy rather than a commercial general liability, or CGL, policy. Medline is currently locked in a coverage battle with its CGL insurer, Hartford Fire Insurance Co., which has invoked a pollution exclusion to deny coverage.

"This case could have relevance down the road in different ways, but by the same token, it's not going to be exactly like any other case," said Jeweler.

Seth Lamden, a partner at Blank Rome LLP's Chicago office, agreed with Jeweler that the Second District's decision will not likely have a widespread impact.

Lamden told Law360 that he was surprised by the panel's rationale and explained "the court made findings relating to liability facts that are more appropriately addressed in the underlying case, and not appropriate for purposes of determining whether the insurer has a duty to defend."

Hinshaw's Seaman concluded that the appeals court correctly rejected Medline's "attempts to dance around the retroactive date requirement by asserting there were multiple emissions or that the emissions were intermittent or fugitive," or discharged into the environment without first going through emissions control devices. 

Both Pillsbury's Jeweler and Blank Rome's Lamden countered that a determination on the duty to defend should be looked at broadly.

Final Destination

Legal experts agreed the appeals court's ruling is likely the end of the line for the coverage dispute and that the Illinois high court would not weigh in.

Schwartz and Lamden said the specific facts of the case and the terms of the policy would not make the case a good vehicle for review by the Illinois Supreme Court.

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“Ill. Emissions Ruling May Hamper Policyholders, Experts Say,” by Shane Dilworth was published in Law360 on March 11, 2022.