Pollution Exclusion Survives Challenge In Equine Environmental Coverage Dispute

Applying California law, the U.S. District Court for the Eastern District of California held that pollution exclusions may apply to bar coverage for litigation and settlement of Clean Water Act and Resource Conservation and Recovery Act claims alleging contamination from byproducts of equine operations. Great Am. Ins. Co. v. Cosumnes Corp., 2026 WL 798024 (E.D. Cal. Mar. 23, 2026). Ruling on a motion to dismiss or stay, the court (i) permitted the insurer’s claims for reimbursement of defense costs to proceed at the pleading stage; (ii) allowed the claimant in the underlying litigation to be joined as a third-party defendant in the insurer’s declaratory judgment action; and (iii) denied as moot the policyholder’s motion to stay pending the outcome of the underlying litigation.