United States District Court, D. Minnesota
Richard H. Kyle United States District Judge
Rembrandt Enterprises, Inc. (“Rembrandt”)
commenced this action against its insurer, Defendant Illinois
Union Insurance Company (“Illinois Union”), after
Illinois Union refused to cover losses stemming from an
outbreak of highly pathogenic avian influenza (commonly known
as the “bird flu”). Presently before the Court
are the parties' cross-Motions for Summary Judgment. For
the reasons set forth below, the Court will deny both
owns and operates commercial poultry farms in several states,
including Minnesota and Iowa. In 2011, it purchased a
Premises Pollution Liability III Insurance Policy (“the
Policy”) from Illinois Union. The Policy insured
Rembrandt's farms against losses caused by “New
Pollution Conditions, ” defined as “[t]he
discharge, dispersal, release, escape, migration or seepage
of any . . . irritant, contaminant, or pollutant . . . on,
in, into, or upon [covered] land and structures.”
(See Veenstra Decl. Ex. 1.) Excluded from coverage
were, inter alia, losses “arising out of or
related to the presence or removal of naturally occurring
materials, ” unless those materials were “present
. . . as a result of human activities or human
Policy was in effect in December 2014, when the strain of
bird flu at issue was discovered in the United States.
(Id. Ex. 2.) The United States Department of
Agriculture's Animal and Plant Health Inspection Service
(“APHIS”) could not definitively identify the
virus's source, but “thought [it] to have been
introduced from Eurasia by [the migration of] wild
birds.” (Id.) It then spread within the United
States and, eventually, to Rembrandt's farms. Despite
Rembrandt's efforts to contain the infection, it spread,
forcing Rembrandt to euthanize over nine million birds.
(Seigfreid Decl. ¶ 2.)
tendered claims under the Policy to Illinois Union for losses
at its infected farms, but Illinois Union denied coverage.
Rembrandt then commenced this action, alleging that Illinois
Union had breached the Policy. With liability discovery
complete, both parties have moved for summary
judgment. In the Court's view, however, genuine
issues of material fact preclude summary judgment
crux of this action is the mode by which the bird flu was
transmitted onto Rembrandt's farms. But there is no
consensus on how the bird flu spread in general-in June 2015,
shortly after Rembrandt's farms became infected, APHIS
announced that there was “not substantial or
significant enough evidence to point to a specific pathway or
pathways for the spread of the virus” within the
United States. (Veenstra Decl. Ex. 4.) And the record is no
more precise regarding the bird flu's arrival at
contends that bird flu spread to its farms by air and as a
result of human activity. Its expert, Dr. Osterholm,
identified other farms eight to twenty miles away that
contracted the bird flu prior to Rembrandt's farms.
(Osterholm Dep. 23-24; Osterholm Decl. ¶ 21.) He opined
that these farms depopulated their infected livestock in gas
chambers, creating a “virus cloud” that carried
the bird flu to Rembrandt's farms. (Veenstra Decl. Ex. 6,
11.) Research supports Dr. Osterholm's theory-bird flu
was “detected in air samples taken inside and outside
infected poultry houses, supporting the idea that the virus
can be transmitted through the air.” (Id. Ex.
4.) Further, “wind data shows a relationship between
sustained high winds (25 mph or greater for 2 days or longer)
and an increase in the number of infected farms 5 to 7 days
later.” (Id.) More specifically,
“depending on wind speed, wind direction, and other
meteorological parameters . . . farms located between [4.35
and 9.3] miles from an infected farm could be at a low to
moderate risk of [airborne] transmission.” (Veenstra
Decl. Ex. 30 at 35.)
Illinois Union contends airborne transmission is unlikely
given the distance (eight to twenty miles) between
Rembrandt's farms and the infected farms identified by
Dr. Osterholm. As mentioned above, the risk of infection at
these distances was low to moderate (id.), and Dr.
Osterholm acknowledged that certain “farm flocks with
high [airborne] potential exposure . . . did not become
infected.” (Id. Ex. 6 at 5.) Assuming airborne
spread is possible, Dr. Osterholm opined that it was
enhanced-not necessarily caused-by
depopulation activity at neighboring farms. (Id. Ex.
11 at 6.) Indeed, APHIS found an increased risk of airborne
spread “the entire length of time [the bird flu was]
present on a farm, ranging from 10 days before onset of
clinical signs to 17 days after depopulation began”
(Davison Decl. Ex. 3 at 35), supporting the possibility of
airborne transmission unaided by human activity.
extensive briefing, on this record, the Court is simply not
in a position to determine as a matter of law how
the bird flu spread to Rembrandt's farms and,
accordingly, neither party is entitled to summary judgment.
Fed.R.Civ.P. 56(a). Based on the foregoing, and all the
files, records, and proceedings herein, IT IS ORDERED that
Rembrandt's Motion for Partial Summary Judgment (Doc. No.
100) and Illinois Union's Motion for Summary Judgment
(Doc. No. 111) are DENIED.
 The parties have reserved the issue of
damages until after a liability determination. (Doc. No. 27.)
As such, the nature and extent of Rembrandt's claimed
losses are not before the Court, and Rembrandt has moved for
summary judgment only as to liability.
 Summary judgment is proper if, drawing
all reasonable inferences in favor of the nonmoving party,
there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986). The Court views the record in the
light most favorable to Illinois Union when considering
Rembrandt's Motion and in the light most favorable to
Rembrandt when considering Illinois Union's Motion.
Seaworth v. Messerli, Civ. No. 09-3437, 2010 WL
3613821, at *3 (D. Minn. Sept. 7, 2010) (Kyle, J.),
aff'd, 414 F.App'x 882 (8th Cir. 2011).
Either way, summary judgment is improper if the record
contains genuine issues of material fact.
 The answer to this question bears on
whether the virus “dispers[ed], release[d], migrat[ed],
or seep[ed] . . . on, in, into, or upon”
Rembrandt's farms under the Policy's insuring clause,
and whether the virus spread due to human activity, thereby
triggering an exception ...