CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - WEDNESDAY, DECEMBER 4, 2024

Hawaii Supreme Court Finds Climate Change Lawsuit Barred by “Pollution Exclusion”

Earth globe sitting on grass

As climate-change related litigation continues to increase, carriers may increasingly look to similar “pollution” exclusions to bar or limit coverage.

November 5, 2024
Jason Taylor - Traub Lieberman Insurance Law Blog

On October 7, 2024, the Hawaii Supreme Court answered the question of whether an “accident” includes an insured’s reckless conduct in emitting harmful greenhouse gases (“GHGs”) and whether such emissions are “pollutants” as defined in a general liability policy’s pollution exclusion. In Aloha Petro., Ltd. v. National Union Fire Insurance Co. of Pitt., PA, No., 2024 Haw. LEXIS 179 (Oct. 7, 2024), the Hawaii Supreme Court answered in the affirmative as to both certified questions from the United States District Court for the District of Hawaii, holding that an insured’s reckless conduct can be an “accident” and that GHGs are “pollutants” under the policies’ pollution exclusions.

In the underlying case, the County of Honolulu and the County of Maui (the “Counties”) sued Aloha Petroleum, Ltd. (“Aloha”) and several other fossil fuel companies for climate change-related harms. Namely, the Counties alleged that the fossil fuel industry knew that its products would cause catastrophic climate change, and rather than mitigating their emissions, defendants concealed such knowledge, promoted climate science denial, and increased their production of fossil fuels. Aloha was allegedly on notice that its products caused harmful climate change through its former parent company, Phillips 66, and its current parent company, Sunoco. Given this knowledge, the District Court determined that the Counties allegations constituted reckless conduct by Aloha.

Mr. Taylor may be contacted at jtaylor@tlsslaw.com


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