Is My Drywall Chinese? - HB Litigation Conferences

inadequate ventilation, the court would be less likely to apply the absolute pollution
exclusion than if the cause were the use in the drywall of the fly ash byproduct of burning
coal. In addition, if the chemical compound being emitted from the drywall is a hazardous
substance or a regulated pollutant, it is more likely that the court would apply the absolute
pollution exclusion to the emission of such a substance. See, e.g., American States Ins. Co. v.
Nethery, 79 F.3d 473, 476-77 (5th Cir. 1996) (applying Mississippi law) (trichloroethane in
paint and glue fumes held to be a pollutant within the meaning of the exclusion, in part,
because trichloroethane is regulated as a hazardous substance by EPA under CERCLA). To
the extent, however, that it is shown that the emissions from Chinese drywall are the same as
those given off by non-defective drywall, courts may be less inclined to apply the absolute
pollution exclusion to such emissions. As a general matter, courts are less inclined to apply
the absolute pollution exclusion to damage caused by ordinary building materials, installed
by contractors in the ordinary course of their business, than to other types of irritants or
contaminants alleged to be within the absolute pollution exclusion.
B. The Other Requirements for Application of the December 2004 Absolute
Pollution Exclusion Might Not Be Met by Particular Insured Contractors.
In order for the absolute pollution exclusion to apply, at least under the December
2004 version of the exclusion, one of five requirements in the exclusion must be met. The
requirements listed at subparts f.(1)(b) and f.(1)(c) of the exclusion are not met by Chinese
drywall because a house containing such drywall is not a premises, site, or location used for
the handling, storage, disposal, processing or treatment of waste; and the alleged pollutants
were not transported, etc. as waste by or for any insured or any person for whom an insured
is legally responsible. In addition, the requirements at subparts f.(1)(d) and f.(1)(e) of the
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