The court accepted a certified question from the Seventh Circuit on April 17, 2025, in Griffith Foods International Inc. v. National Union Fire Insurance Co.—a case that springs from the Sterigenics ethylene-oxide suits. The court’s agreement to consider the question signals the potential for a landmark ruling on the scope of pollution exclusions, with far-reaching implications for companies dealing with environmental and related toxic tort claims.
The Seventh Circuit’s decision to certify the question to the Illinois Supreme Court underscores just how unsettled Illinois law is on pollution exclusions. The Illinois Supreme Court’s 1997 decision in American States Inc. Co. v. Koloms limits the exclusion to “traditional” pollution events, while the Seventh Circuit’s own 2012 decision in Scottsdale Indem. Co. v. Village of Crestwood sweeps much wider, barring coverage for any contaminant injury claim—permit or no permit.
For 35 years, Sterigenics’ Willowbrook sterilization plant released ethylene oxide (EtO), exactly as its Illinois permit allowed—subject to no numeric cap, with full regulatory knowledge. Now the Illinois Supreme Court must decide whether those very emissions still fall inside the “absolute” pollution exclusion contained in most modern CGL policies.
Why the Outcome Matters: Narrow vs. Broad Pollution Exclusion
The pending decision has potentially sweeping implications for Illinois policyholders. The pollution exclusion has split courts nationwide between a sweeping, all-inclusive reading and the narrower, “traditional pollution” approach of Koloms. How the Illinois Supreme Court draws the line will shape future policy language in Illinois and guide other states wrestling with similar questions.
A proper reading would confirm that routine, permit-compliant emissions do not automatically bar coverage. That means National Union must keep funding Sterigenics’ defense (a tab already estimated at $150 million) and, potentially, any future indemnity. More importantly, it lets manufacturers, energy companies and chemical processors rely upon their legacy CGL towers for environmental and resulting toxic tort suits—so long as their releases stayed within regulatory limits, thus honoring the spirit of the Koloms decision that the exclusion was never intended to serve as a universal “gotcha” whenever a lawful, regulated release of substance can be labeled a pollutant in the future.
The sweeping, all-inclusive reading of the exclusion favored by insurers violates normal rules of policy construction, which construe ambiguity in favor of coverage. That broad reading would flip the switch the other way: Every injurious discharge—permit or no permit—would trigger the exclusion. Coverage for Sterigenics and similarly situated companies would vanish, claim denials would spike, and carriers would likely cite the ruling to resist payments in other jurisdictions. Conversely, if the justices follow the precedent in Koloms and extend it to permitted emissions, Illinois would cement its reputation as a policyholder-friendly forum—though insurers might rewrite future policies to exclude authorized emissions explicitly, leaving today’s decision to govern only existing and legacy coverage. Even if the Court frames such a ruling around the unique, long-term EtO exposure at issue, retreating from Koloms could embolden insurers and could shift courts nationwide.
Timely Context: Ethylene Oxide and Emerging Environmental Claims
Heightened scrutiny of “emerging” toxics makes this ruling especially consequential. Ethylene oxide is simply one of today’s headlines—another is PFAS—and tomorrow it will be any number of once benign chemicals that come under regulatory fire. A clear line from the court will be useful in coverage playbooks going forward.
- If policyholders prevail: Companies can depend on legacy CGL towers for defense in the EtO suits—and use that safety net as settlement leverage.
- If insurers prevail: Defense costs shift to corporate balance sheets, nudging defendants toward quicker, cost-driven settlements.
Either way, the decision will reverberate beyond EtO, shaping how courts and carriers treat groundwater, air emissions, and the next wave of contaminant claims for years to come.
RELATED ARTICLES