In 2003, the California Supreme Court held that residential spraying of pesticide was not within the scope of the pollution exclusion, MacKinnon v. Truck Ins. Exchange, 31 Cal. 4th 635 (2003). The present case involved a defendant in two actions, filed in Mississippi, that alleged that the plaintiffs were exposed to silica through their employment, stemming from the sale of silica products, the use of defective respiratory equipment, and sandblasting. The nature of the claim against the insured sounded in product liability. The court did not hold that silica dust fell within the meaning of the specifically excluded “soot,” but instead found it to be within the more broadly descriptive “irritant or contaminant.” The court ex cathedra states that “the widespread dissemination of silica dust as an incidental by-product of industrial sandblasting operations most assuredly [?] is what is ‘commonly though of as pollution’ and ‘environmental pollution.’” (slip op. at 5, citing MacKinnon) (emphasis added).

Moreover, the court rejected the contention, often urged by policyholders, that applying the exclusion to this type of claim unreasonably and inappropriately cuts back coverage for the insured’s products liability, without the insured’s having been provided with fair notice of the need to buy back the exclusion when purchasing the policy. In other words, the policy as construed here negates the most substantial exposure to bodily injury claims that a maker of, e.g., sandblasting equipment might face. Compare West American Ins. Co. v. Tufco Flooring East, Inc., 409 S.E.2d 692, 699 (N.C. App. 1991) (“To allow West American to deny coverage for claims arising out of Tufco’s central business activity would render the policy virtually worthless to Tufco. If this Court accepted West American’s interpretation of the CGL policy, we would be allowing an insurance company to accept premiums for a commercial general liability policy and then to hide behind ambiguities in the policy and deny coverage for good faith claims that arise during the course of the insured’s normal business activity.”); American States Ins. v. Kiger, 662 N.E.2d 945 (Ind. 1996). Many courts – though assuredly not all – have reasoned that such an construction would need to be particularly plain and unmistakable before it can be enforced, given that it so goes against the reasonable expectations of a purchaser of product-liability coverage. Compare Haynes v. Farmers Insurance Exch., 32 Cal.4th 1198 (2004). The recent decision in Haynes is instructive in this regard inasmuch as the Court there held that even though policy language literally applied to limit coverage the limitation was not reasonably called to the insured’s attention due to its placement in the policy and other indications that coverage would be afforded.

The argument of policyholders regarding products and the pollution exclusion is not that there is a sub silentio limitation on the scope of the exclusion’s (overly) broad reach, but rather that a construction that would negate the core coverage for products liability must be one that is ineluctably compelled and particularly clear to a lay person, since it does such violence to the purpose of buying product-liability insurance. The new California appellate case grounds its reasoning in part on federal regulations that classify silica dust as a contaminant (slip op. at 5), yet it simultaneously concedes that in some circumstances silica dust should not be considered an irritant or contaminant. Given MacKinnon and Haynes, the court’s bottom-line no-coverage ruling (as distinct from its rationale) can best be harmonized by its employing abuse-of-discretion review (but even then the denial of coverage plausibly is beyond that even what that deferential review should uphold); at all events, this is the type of decision that would seem to be appropriate for the California practice of depublication, given that its most legitimate rationale does not have significant outside the insurer-liquidation context and that its loose language is irreconcilable with governing California Supreme Court precedent (MacKinnon and Haynes).