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Georgia Federal Court Facts Exist As To Whether Nitrogen Is An "Irritant" or "Contaminant" As Used in Pollution Exclusion



The Southern District of Georgia recently ruled that Evanston Insurance Company is not entitled to summary judgment on whether or not it imposes pollution exclusion bar coverage for the release of nitrogen into a warehouse. The case is from an incident at Xytex Tissue Services, LLC's warehouse, where Xytex stored biological material at low temperatures. Xytex used an on-site liquid nitrogen delivery system to keep the material properly cooled. This system releases liquid nitrogen, which would vaporize into nitrogen gas and cool the biological material. On February 5, 2017, a Xytex employee, Greg Meagher's deputy, entered the warehouse to investigate activated motion detectors and burglar alarms. Deputy Meagher was overcome by nitrogen gas and died as a result. Following Deputy Meagher's death, his heirs filed suit against Xytex and other defendants. Evanston denied coverage based on the pollution exclusion in its policy. Evanston's summary judgment motion, the Southern District of Georgia reasoned that the type of injury sustained is essential in analyzing whether the pollution exclusion applies. Specifically, Xytex argued, and the court agreed, that the underlying lawsuit was alleged to be the bodily injury caused by a lack of oxygen, not exposure to nitrogen. The court also distinguished prior decisions, explaining that injury caused by a lack of oxygen is not a contamination or irritation of the body in the same way as injury resulting from exposure to carbon monoxide or lead. The court also found that Xytex "reasonably expected that liability related to a nitrogen leak would be insured." The Xytex decision clarifies that, under Georgia law, when analyzing pollution exclusions, bodily injury. Here, although liquid nitrogen was arguably played a role in the events that led to the injury, it was alleged that the lack of oxygen was the actual cause of death. Therefore, insurers and policyholders should carefully analyze facts surrounding potential contamination events and evaluate how those facts fit within Georgia's decision interpreting pollution exclusion language.


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