Articles

  • 4/27/2017

A Nevada federal district court remanded a bad faith case removed to federal court under diversity jurisdiction by an insurer, finding that the removing insurer had not established the $75,000 jurisdictional minimum, despite that the complaint alleged bad faith, punitive damages and attorney’s fees and the plaintiff had apparently incurred medical expenses of some $55,000.

  • 4/27/2017

A Nevada federal district court denied an insurer’s motion for judgment on the pleadings, holding that a refusal to accept a policy limits settlement demand on a claim that was likely to exceed the policy’s limits and included a full release of all claims was not objectively reasonable.

  • 4/27/2017

The Ninth Circuit Court of Appeals issued an unpublished decision holding that property damage to a water project was the result of the insured general contractor’s defective work on the property and therefore barred by the standard property damage exclusions.

  • 4/27/2017

In an unpublished decision, the Ninth Circuit held that an insurer’s negligent failure to timely accept a policy limits settlement demand did not constitute unreasonable conduct in violation of the implied duty to settle.

  • 4/27/2017

In an unpublished decision, the Ninth Circuit affirmed a district court finding that an insurer owed no duty to indemnify because its insured entered into a settlement agreement without first obtaining the insurer’s written consent.

  • 4/27/2017

In an unpublished decision, the Ninth Circuit concluded that claims brought by FDIC in its capacity as receiver for an insured bank against the bank’s former officers were not covered by the bank’s professional liability policy because of an exclusion barring claims brought by any receiver of the company.

  • 4/27/2017

The District Court for the Northern District of California refused to apply a Mold Exclusion that attempted to preclude the duty to defend where even a portion of the claims against the insured alleged mold damage.

  • 4/27/2017

The District Court for the Eastern District of California held that a Used Tire Exclusion set forth on a separate page of the policy, and which was titled in all caps and bold font, and plainly stated there was no coverage for used tires sold by the insured, was conspicuous and clear.

  • 4/27/2017

A California federal district court held that no personal and advertising injury coverage was available to the insured for an underlying action alleging a mortgage modification scam because the policy’s financial services exclusion unambiguously barred coverage for the management and administration of mortgage plans. Insurance Code section 533 also applied.

  • 4/27/2017

The District Court for the Eastern District of California held that the insured’s claim that it was too busy to respond to the complaint for declaratory relief due to the complex nature of the underlying litigation is not excusable neglect and will not serve as a basis to set aside a default.

  • 4/27/2017

California’s Second District Court of Appeal held that when a policy expressly provides coverage for litigation expenses on appeal, an exclusion requiring repayment to the insurer upon a “final determination” of the insured’s culpability applies only after the insured’s direct appeals have been exhausted.

  • 4/27/2017

The Ninth Circuit Court of Appeals affirmed a trial verdict finding that an insurer breached its duty to defend, and evidence that the insurer failed to conduct a proper investigation supported denial of its motion for summary judgment on the issue of bad faith.

  • 4/27/2017

A California Court of Appeal found that the insured’s regular use of her employer’s vehicle precluded coverage under her auto policy.

  • 4/27/2017

The California Supreme Court held that the Insurance Commissioner's regulation regarding replacement cost estimates for homeowners insurance was a proper exercise of the Commissioner’s authority.

  • 4/27/2017

The Ninth Circuit Court of Appeals held that an excess insurer that refused to consent to an insured’s settlement or take over the defense was liable for breach of contract and bad faith.

  • 4/27/2017

In a declaratory relief action in which a bad faith counterclaim had been asserted, a federal district court in Nevada granted the insured’s motion to compel the testimony of the insurer’s outside coverage counsel and an unredacated copy of her work product. The insurer had not raised advice of counsel as a defense, but its claim adjuster testified that she made the decision to deny coverage in reliance on coverage counsel’s recommendation.

  • 4/26/2017

We are going to talk about fluoride.  Fluoride is found naturally in soil, water, foods, and several minerals, such as fluorapatite and fluorite. Fluoride concentration in seawater averages 1.3 ppm (parts per million), which is probably good for maintaining a shark’s teeth free from cavities. In fresh water supplies the natural range is typically 0.01 to 0.3, which helps strengthen trout’s teeth so they can fight back when Yogi Bear is looking for dinner. (Do trout have teeth?) Groundwater can contain much higher levels, however. Fluoride is the 13th most abundant element on the earth's crust. (Good fact to drop at a bar…will certainly get a conversation going.)

  • 4/26/2017

Dramatic changes to Rule 34(b) which a) brought specificity to the requests for production of documents and b) attempted to do away with the tactic of objecting broadly to requests for production while, at the same time, producing some documents.  This particular tactic leaves the propounding party guessing as to whether relevant information was withheld on the basis of the boilerplate objections.  The new version of Rule 34 puts an end to that practice.

  • 4/26/2017

The U.S. Court of Appeals for the Fourth Circuit recently held that the Comprehensive Environmental Response, Compensation, and Liability Act’s (CERCLA) discovery rule, which allows for federal preemption of state statutes of limitations, only applies when the operative facts of the state action can give rise to a cause of action under CERCLA.  Blankenship v. Consolidation Coal Company 2017 WL 937467.  In 1994, Defendant’s mining operations were being hampered by an accumulation of water, so Defendant reached an agreement with Beatrice Mine, which had been exhausted in 1972, to transfer the water from their mine to Beatrice Mine.  Defendant applied for a revision of their mining permit with the Virginia Department of Mines, Minerals, and Energy.  Defendant also published its notices of application in the local newspaper and filed the application for public view at the local courthouse.  The application was approved and the “dewatering” activities ended in 2003. 

  • 4/26/2017

In In Re G-I Holdings, Inc., 564 B.R. 217 (Bankr. D.N.J. Dec. 21, 2016), the Bankruptcy Court was asked to consider whether the confirmed chapter 11 plan discharged liability under an assumed Indemnification Agreement.  Plaintiffs filed a complaint in state court, asserting that, pursuant to the Indemnification Agreement, two companies who had emerged from bankruptcy were required to indemnify Plaintiffs for any costs or liabilities incurred in connection with the investigation and remediation of a superfund site.  

  • 4/26/2017

In a March 20, 2017 decision the Ninth Circuit Court of Appeals upheld the United States Environmental Protection Agency (EPA)’s final rule regarding reduction of regional haze resulting from operation of the coal-fired Navajo Generating Station (the Station) near Page, Arizona.  Yazzie v U.S. Environmental Protection Agency (9th Cir. 2017) 2017 WL 1046117.  In August 2014, after approximately five years of evaluation including participation and recommendations from several stakeholders, EPA issued its final rule for the Station.  A number of environmental groups petitioned arguing that EPA had failed to comply with the Clean Air Act (CAA) and its regulations in reaching EPA’s final rule.

  • 4/26/2017

In a March 20, 2017 decision the Ninth Circuit Court of Appeals upheld the United States Environmental Protection Agency (EPA)’s Federal Implementation Plan (FIP) under the Clean Air Act (CAA) for the coal-fired Navajo Generating Station (the Station) near Page, Arizona.  Hopi Tribe v U.S. Environmental Protection Agency (9th Cir. 2017) 2017 WL 1046116.  In August 2014, after approximately five years of evaluation, the EPA issued its FIP.  The Hopi Tribe (the Tribe) petitioned for review of the FIP arguing that it was not adequately consulted about its interests before the FIP was promulgated.  The Tribe specifically objected to the proposed closure of the Station in 2044.

  • 4/26/2017

The California Environmental Quality Act (CEQA) and the regulations implementing it embody California’s strong public policy of protecting the environment.  The basic purposes of CEQA are to (1) Inform governmental decision makers and the public about potential, significant environmental effects of proposed activities; (2) Identify ways that that environmental damage can be avoided or significantly reduced; (3) Prevent significant, avoidable damage to the environment by requiring changes in projects through the use of alternatives or mitigation measures when the government agency finds the changes to be feasible; and (4) Disclose to the public the reasons why a governmental agency approved the  project in the manner the agency chose if significant environmental impacts are involved. 

  • 4/26/2017

For over a hundred years, the U.S. Supreme Court has made clear that when the United States withdraws its land from the public domain and reserves it for a federal purpose, the government, by implication, reserves appurtenant water then unappropriated to the extent needed to accomplish the purpose of the reservation.  Winters v. United States, 207 U.S. 564 (1908).  In what has become known as the Winters doctrine, federal reserved water rights are directly applicable to Indian reservations and other federal enclaves, encompassing water rights in navigable and non-navigable streams.

  • 2/28/2017

On January 20, 2017, the California Air Resources Board (CARB) issued “The 2017 Climate Change Scoping Plan Update” (the 2017 Plan). The 2017 Plan establishes a proposed framework of action for California to meet the most aggressive climate target in North America: a 40 percent reduction in greenhouse gases (GHG) by 2030 compared to 1990 levels.

  • 2/28/2017

The Clean Water Act (CWA) forbids all discharges of pollutants into waters of the United States, unless the discharger holds a National Pollution Discharge Elimination System (NPDES) permit. A typical NPDES permit lists numerical limitations on specific types of effluents and includes other conditions required for compliance with state and federal law. The Act requires that effluent limits reflect applicable water quality standards.

  • 2/28/2017

In Natural Resources Defense Council v. McCarthy, __ F.Supp.3d __, 2017 WL 491147 (N.D. Cal. Feb. 7, 2017), the district court considered what constitutes a “revision” to a state’s water quality standards. Under the Clean Water Act (CWA), the Environmental Protection Agency (EPA) is duty-bound to review the “revised” standard.

  • 2/28/2017

The U.S. Court of Appeals for the Second Circuit recently reversed the U.S. District Court for the Southern District of New York which had found the U.S. Environmental Protection Agency’s (EPA) 2008 “Water Transfers Rule” was invalid under the federal Clean Water Act (CWA). Catskill Mountains Chapter of Trout Unlimited, Inc. v U.S. Environmental Protection Agency, 846 F.3d 492 (2d Cir. 2017). 

  • 2/28/2017

Having just got off a flight a few hours ago, a short news story about water on airplanes caught my eye. I recall hearing about an issue with airline water some time ago and thought it was all dealt with and there was no further concern. I guess I was wrong.

  • 2/2/2017

California’s Sixth District Court of Appeal held that a subcontractor’s excess insurer was not liable for a worker’s injuries arising out of a fall because, based on undisputed circumstances, no reasonable inference could be made that the insured subcontractor was at fault.

  • 2/2/2017

California’s Fourth District Court of Appeal held that although an insurer had no duty to defend or indemnify, because the construction defect at issue was not an “occurrence,” supplementary payments were part of the duty to defend and the duty to defend determination was not retroactive; therefore, the insurer was not entitled to reimbursement from the insured for that portion of the settlement attributable to attorney’s fees and costs of suit.

  • 2/2/2017

A United States District Court in California held that held that an excess policy which “followed form” with a primary policy incorporated the primary policy’s conditions and exclusions, but not the primary policy’s lower limits of liability.

  • 2/2/2017

The United States District Court for the Central District of California held that an insurer did not owe a duty to pay a judgment against its insured because the insured’s intentional acts caused the plaintiff’s injuries and therefore did not constitute an “occurrence.”

  • 2/2/2017

A District Court in California found that the professional services exclusion precluded coverage for a lawsuit alleging violation of the False Claims Act.

  • 2/2/2017

The District Court in Nevada found that an insurer did not engage in bad faith conduct when it rejected a UM policy limits demand and made a reasonable offer to settle or mediate the claim.

  • 2/2/2017

California’s Third District Court of Appeal upheld, on remand, the trial court’s remittitur of $19 million punitive damages award to $475,000, which included Brandt fees that were not previously considered in fixing the 10:1 ratio.

  • 2/2/2017

A California Court of Appeal found that the potential of ongoing damage to wood inside a chimney was sufficient to trigger coverage for a resulting fire that occurred after the liability policy had expired.
  • 2/2/2017

The United States District Court for the Central District of California held that an insurer owed a duty to defend because the possibility existed that its release of a solvent fell within the “sudden and accidental” exception to the “chemical discharge” exclusion, which barred coverage for the release of irritants or contaminants into the environment.

  • 2/2/2017

In a matter involving disputes between multiple primary level insurers, a District Court in California found that an excess only provision negated the duty to defend or indemnify.

  • 1/31/2017

In a January 4, 2017, opinion the United States Court of Appeals for the Fourth Circuit upheld the United States District Court for the Southern District of West Virginia’s decision that narrative language in Fola Coal’s National Pollutant Discharge Elimination System (NPDES) permit applied to its mining discharges the same as did the permit’s numerical standards. See Ohio Valley Environmental Coalition v. Fola Coal Company LLC (4th Cir. 2017) 2017 WL 35726. Because those discharges, while not exceeding any numerical restriction, degraded the general quality of the water way, the district court found that Fola Coal had violated its NPDES permit. It was thus enjoined from further degradation and required to work on improving the general quality of the stream.
  • 1/31/2017

In a January 3, 2017, opinion the United States Court of Appeals for the Tenth Circuit reversed the United States District Court for the District of Utah’s grant of summary judgment in favor of Noranda Mining Inc., holding that Asarco LLC was not precluded from asserting its Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Section 113(f) contribution claim against Noranda Mining. See Asarco LLC v. Noranda Mining Inc. (10th Cir. 2017) 2017 WL 24609. The district court found that Asarco was estopped by certain statements it had made to a bankruptcy court from bringing its claim, and further that Asarco could not as a matter of law prove that it had paid more than its fair share of cleanup costs in settling with the government.
  • 1/31/2017

The Second Circuit Court of Appeals in Catskill Mountains Chapter of Trout Unlimited, Inc. et al. v. EPA, et al. No. 14-1823 ruled on January 18 that the Water Transfers Rule (Rule) is not subject to the National Pollutant Discharge Elimination System (NPDES) under section 402 of the Clean Water Act (CWA). The Rule, which has been in place for 40 years, allows water to be transferred between two water bodies without requiring a National Pollutant Discharge Elimination System permit. The EPA’s reasoning was that no permit was needed because the transfers do not constitute an “addition of pollutants” to navigable waters.
  • 1/31/2017

In In re W.R. Grace & Co., et al., Reorganized Debtors., No. 01-1139 (KG), 2016 WL 7471290, at *6 (Bankr. D. Del. Dec. 28, 2016), the Delaware Bankruptcy Court ruled in favor of the Debtors, holding that the injunction provision of the confirmed plan prohibited further proceedings by a claimant asserting discovery of asbestos in tree bark years after the claims bar date.
  • 1/31/2017

This case—from the Southern District of New York—is the latest in a long insurance coverage battle between Olin Corporation and its carriers (Olin Corporation v. Insurance Company of North America, ____ F. Supp.3d ____ (2016 WL 6882858)(Nov. 21, 2016, S.D.N.Y. 2016).) In this particular phase of the case, two sites—one in Connecticut and one in California—were at issue. With respect to the Connecticut site, Olin sought reimbursement of approximately $1.7 million in defense fees incurred to defend against litigation involving allegations of environmental contamination at a city disposal site from a carrier that provided insurance after the contaminating events occurred.
  • 1/31/2017

The False Claims Act, 31 U.S.C. § 3729, et seq., (FCA) was enacted in 1863 in response to Congressional concern that suppliers of goods to the Union Army during the Civil War were defrauding the government. The FCA imposes liability on anyone who knowingly submits a false claim to the government or causes another to submit a false claim to the government or knowingly makes a false record or statement to get a false claim paid by the government. The FCA also has a provision known as the “reverse false claims section” which imposes liability where someone acts improperly – not to get money from the government, but to avoid having to pay money to the government. The FCA allows a private person to file suit on behalf of the government. A suit filed by an individual is known as a “qui tam” action, and the person bringing the action is referred to as a “realtor.”
  • 1/31/2017

In the 1990s, the predecessor to the San Francisco Municipal Transportation Agency (Muni) proposed to connect the southwestern part of San Francisco to the rest of the City by means of the Third Street Light Rail Project (the Project) which would link certain southwestern neighborhoods with Chinatown, Downtown and South of Market. The Project was divided into two phases: the Initial Operating Segment and the New Central Subway. The Final Environmental Impact Report (FEIR) for the Project discussed both the Initial Operating Segment and the New Central Subway, but at different levels of detail. The FEIR stated that the two phases were related but distinct, and “subject to separate advancement decisions on separate schedules.”
  • 1/31/2017

On January 11, 2017, the Environmental Protection Agency (EPA) issued a notice of its intent to ban the use of trichloroethylene (TCE), (also known as trichloroethene, trichlor, trike, tricky and tri) in commercial vapor degreasing, consumer aerosol degreasing, and as a spot cleaner in dry cleaning. It would also prohibit the manufacture and import of TCE in vapor degreasing, require manufacturers, processors, and distributors, except for retailers of TCE for any use, to provide downstream notification of these prohibitions throughout the supply chain, and require limited recordkeeping. This action was taken pursuant to the newly upgraded Toxic Substance Control Act (TSCA) Section 6(a).
  • 1/31/2017

Vapor intrusion has become a hot ticket item with the Environmental Protection Agency (EPA) over the last few years. The EPA uses the Hazard Ranking System (HRS) to determine what contaminated sites have high risk issues. This governs how contaminated property is evaluated and ranked for possible listing on the federal National Priorities List (NPL). As part of a flurry of last minute rule adoptions, the EPA recently amended the HRS to include a vapor intrusion component for ranking contaminated sites. The EPA insists that using this new HRS will not increase the number of sites that are added to the NPL each year. While likely true it will change what types of sites and contaminants that are going to added to the NPL.
  • 1/31/2017

For decades Trichloroethylene (TCE) has been used as a degreaser in various trades and as a spot cleaner in dry cleaning operations. Since the inception of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, TCE has been a focal point of Superfund cleanup efforts as well, as its misuse and the failure to dispose of it properly has led to hundreds of claims of soil contamination, among other problems. This ban is more focused on the effect of TCE on workers and human health, as opposed to the environment, soil or groundwater.