Pollution Claims

August 11.2009

Global Warming Litigation: New Environmental Policies Lead To New Coverage Issues

Global warming litigation continues, but President Obama’s new environmental policies likely will change its path. Insureds should consider their risks in light of these new policies to determine whether their present insurance programs provide adequate coverage. We have previously discussed coverage issues arising out of global warming litigation. Click Here; Click Here One of the cases we addressed was California’s lawsuit against GM and Chrysler, which alleged that the cars and trucks the two companies manufactured damaged the state by contributing to global warming and its negative environmental consequences. See California v. General Motors Corp., No. 06-cv-05755 (N.D. Cal.). The...

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April 17.2009

Relevant Discharge re: State of Cal. v. Lloyds

As discussed in our March 13 post, the California Supreme Court issued its much awaited decision in State of California v. Underwriters at Lloyd’s of London, in which California sought insurance coverage for court ordered environmental remediation costs at the Stringfellow Acid Pits. In addition to reaffirming the concurrent proximate cause rule, the Court settled which “discharge” courts are to analyze when applying the “sudden and accidental” pollution exclusion present in many CGL policies. Pollution resulted at the acid pits, which essentially were dammed evaporation ponds, from at least three sources: gradual seepage through the fractured rocks beneath the unlined...

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March 13.2009

New California Supreme Court Decision Reaffirms Concurrent Proximate Cause Rule In Environmental Context

On Monday, March 9, 2009, the California Supreme Court issued its opinion in State of California v. Underwriters at Lloyd’s London et al., S149988. The Court ruled on numerous issues, all of which were decided favorably for insureds. This particular blog post focuses on the Court’s reaffirmation of the concurrent proximate cause rule in the environmental liability context. We will highlight other aspects of the Underwriters ruling in future blog posts, as well as our upcoming Client Alert. Underwriters is the latest decision involving insurance coverage disputes arising out of environmental contamination at the Stringfellow industrial waste disposal site in...

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January 09.2009

Continental Court Decision Approves “Stacking” of Consecutive Policy Limits

This week, the California Court of Appeal issued a new decision regarding the “stacking” of policy limits: State of California v. Continental Insurance Company, No. E041425 (Super. Ct. No. 239784). As the Continental court explained, “stacking” generally refers to “treating multiple policies that apply to a single loss as cumulative – as a ‘stack’ of coverage – rather than as mutually exclusive.” Such treatment allows an insured to recover under multiple liability insurance policies for the same occurrence. Reading the standard CGL insuring agreement in the context of previous California Supreme Court decisions, the Continental court concluded that this standard...

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January 08.2009

Supreme Court Argument in State v. Underwriters at Lloyd's Regarding Pollution Exclusion

The Supreme Court heard argument today in this case, involving the Stringfellow site. Two main issues were argued. First, what is the relevant "discharge" for purposes of the pollution exclusion's "sudden and accidental" exception: if contaminants were placed in pits intentionally, but escaped accidentally, does the sudden and accidental exception to the pollution exclusion apply? The second issue was the scope of coverage, or the allocation, for claims where there are both sudden and gradual pollution events at the site. On the first issue, the insurers were met with a great deal of skepticism. Justice Kennard was clearly not buying...

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December 17.2008

Supreme Court to Hear Argument January 8 in State of California v. Underwriters at Lloyd's

One issue currently before the California Supreme Court is the issue of allocation between covered and uncovered damages where pollution at a site is partly caused by gradual pollution and partly caused by a "sudden and accidental" event. The first case to address this, Golden Eagle Refinery Co. v Associated International Ins. 85 Cal. App. 4th 1300 (2001), held that the burden was on the insured to prove the sudden event caused an incremental increase in clean-up costs. The Court of Appeals in the State of California case took a different approach, applying the "concurrent cause" doctrine to hold that...

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