I just came across an interesting recent decision from the Supreme Court of Alabama, Federated Mutual Ins. Co. v. Abston Petroleum, Inc., 2007 Ala. LEXIS 65. The case addresses a policyholder's effort to challenge a pollution exclusion where the released substance, though noxious, is useful. The Alabama Supreme Court rejected the policyholder argument: “We conclude that the better-reasoned approach is that applied by the majority of courts that have reviewed a pollution-exclusion clause identical to or markedly similar to the clause in the Federated Mutual policy before us.
We hold that gasoline, although not a pollutant when properly used for the purposes for which it is intended, is clearly a pollutant when it leaks into the soil from underground lines or tanks or when fumes from such a leak are so dangerous that a business must be closed, as was the case here. The simple fact that gasoline serves a vital purpose when released from a properly constructed tank into the confines of an internal combustion engine does not permit us to blink reality and overlook the deleterious consequences that occur when gasoline is introduced into the soil or when its fumes escape into the atmosphere. Because we conclude that gasoline is clearly a pollutant as that term [*23] is used in the policy, any argument that the pollution-exclusion clause is ambiguous cannot be supported. Because we hold that the clause is unambiguous, we need not consider the arguments made by Abston Petroleum and the Schills that we should consider the drafting and regulatory history of such clauses or that the policy must be construed against the insurer, who drafted it.” (Emphasis added.)
