Ash Grove Cement Co. v. Liberty Mutual Ins. Co. (D.Or., September 30, 2010)

District Court Granted Partial Summary Judgment To Insured On Duty To Defend Against CERCLA Section 104(e) Suit

The insurer asserted that a §104(e) letter does not constitute a “suit” because the statute required either an “action” by the EPA “against” the policyholder or an “agreement” between the EPA and the policyholder in which the EPA requests that the insured “take action.” The insurers argued that the §104(e) letter was not an “action” and “does not require [the policyholder] to take action” Rather, the §104(e) letter simply asked the policyholder to voluntarily provide information. The district court ruled in favor of the policyholder holding that, while the letter sought “voluntary cooperation,” compliance with the request was “required by law,” and failure to respond could result in immediate civil penalties, thereby containing the threat of legal action. Based on the forgoing, the court held that the EPA letter to the insured was equivalent to a “suit seeking damages” under the liability policy, and therefore, the insurer had a duty to defend Ash Grove.