Insurers’ Duty to Defend May Be Triggered at Early Stages of CERCLA Enforcement Process
On May 11, 2016, the 9th Circuit held that EPA information requests under CERCLA § 104(e) may trigger general liability insurers’ defense obligations. This case marks the second time that the Ninth Circuit has held that § 104(e) letters — which often merely request information and do not designate an entity as a Potentially Liable Party (PRP) — can trigger insurers’ duty to defend. Other state and federal courts have held the same in recent years. These cases — which may mark the beginning of a trend — may allow companies to shift more of their CERCLA-related costs to insurers.
Ash Grove Cement Co. v. Liberty Mutual Insurance Co.
The Ash Grove case arose out of the cleanup of the Portland Harbor Superfund site. In 2008, EPA sent a letter requesting information from Ash Grove about contamination at the site. The company sought indemnification from its insurers for the costs it incurred in responding to EPA’s letter. Its request was denied. A year later, Ash Grove sued.
The 9th Circuit agreed with Ash Grove. The policies at issue required the insurers to defend any “suit” against the company. The 9th Circuit held that this provision was triggered when EPA sent a § 104(e) letter requesting information. The court relied largely on its 2013 decision in Anderson Bros, Inc. v. St. Paul Fire & Marine Ins. Co., which held that “a 104(e) letter is a coercive information demand that is an attempt to gain an end through legal process, and is therefore a ‘suit’ under Oregon law.”
A New Trend?
Other courts have also held in recent years that information requests under CERCLA § 104(e) are “suits” triggering insurers’ duty to defend. For example, the U.S. District Court for the District of Oregon determined that § 104(e) letters are “sufficient to trigger [insurers’] duty to defend.” The Supreme Court of Texas also recently ruled that §104(e) letters can trigger an insurer’s duty to defend. That court analogized EPA’s CERCLA enforcement process to a traditional lawsuit: “The PRP notice letters serve as pleadings. The EPA obtains discovery through requests for information, indistinguishable from interrogatories under the rules of civil procedure.”
These recent cases may require insurers to become involved earlier in the CERCLA enforcement process than they were before. Many courts have previously held that insurance policies are triggered when EPA notifies a company that it has been identified as a PRP. By triggering in insurer’s duty to defend when a company receives a § 104(e) letter — which can occur before EPA has identified PRPs — these cases may allow companies to shift more of the financial burden associated with legacy contamination to their insurers.
 Ash Grove Cement Co. v. Liberty Mutual Insurance Co., 2016 WL 2731656 (9th Cir. 2016).
 Ash Grove at 4 (citing Anderson Bros, Inc. v. St. Paul Fire & Marine Ins. Co.,729 F.3d 923, 932-33 (9th Cir. 2013)) (internal quotation marks omitted).
 Century Indem. Co. v. Marine Grp., LLC, 848 F. Supp. 2d 1238, 1255-56 (D. Or. 2012).
 McGinnes Indus. Maint. Corp. v. Phoenix Ins. Co., 477 S.W.3d 786, 791 (Tex. 2015), reh’g denied (Jan. 22, 2016).
 See, e.g., Travelers Cas. & Sur. Co. v. Alabama Gas Corp., 117 So. 3d 695, 708 (Ala. 2012); R.T. Vanderbilt Co. v. Cont’l Cas. Co., 870 A.2d 1048, 1058 (Conn. 2005); Johnson Controls, Inc. v. Employers Ins. of Wausau, 665 N.W.2d 257, 264 (Wis. 2003).