Louisiana Court Chooses Florida Law: Total Pollution Exclusion Bars ....

... FEMA Trailers' Formaldehyde Damages From Katrina Aftermath. 

   In the case of In re FEMA Trailer Formaldehyde Products Liability Litigation, 2011 WL 381616 (E.D. La. January 25, 2011)(authorized password required to access Westlaw), the Court was confronted with a Question of Coverage for North American Catastrophe Services, Inc. under a Commercial General Liability Insurance Policy issued by Northfield Insurance Company.  NACS obtained the CGL from Northfield after NACS, a Florida corporation, entered into brokerage contracts under which it obtained trailers for temporary "FEMA" housing after Hurricane Katrina.  The trailers reeked of formaldehyde, in basic and simple terms.  The CGL contained a Total Pollution Exclusion, also arguably in basic and simple terms.

   Following an exhaustive discussion of choice-of-laws principles, the Federal Court chose Florida law, applied the Total Pollution Exclusion, and granted the CGL Carrier's Motion for Summary Judgment of No Coverage:

Based on Louisiana's choice of law provisions and prior jurisprudence, Florida law should be applied to the insurance contract at issue. Under Florida law, it seems clear that the total pollution exclusion unambiguously excludes coverage for these claims. See Deni Associates, 711 So.2d 1135, 1138 (Fla.1998) (finding the total pollution exclusion to be clear and unambiguous). Thus, because Plaintiffs alleged injuries were caused by formaldehyde fumes, the Northfield policy does not apply, based on the Total Pollution exclusion located therein. The exclusion should be enforced as written and coverage is precluded.

 Id. at *9.  Katrina's aftermath lingers.  Insurance Coverage, at least in this case, does not.

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