April 30, 2012
New Development in Climate Change Litigation
Today, the article I wrote with my colleague John Lee, "Climate Change Claims: The Next Y2K Insurance Litigation Scare?" appears in the current issue of Business Insurance. Just before publication, I was able to modify the article to include mention of recent developments in one of the cases, AES Corp. v. Steadfast Ins. Co. On April 20, 2012, the Virginia Supreme Court affirmed its prior ruling that Steadfast Ins. Co. has no obligation to defend or indemnify AES Corp. in a climate change liability case arising out of an underlying suit brought by the Village of Kivalina, Alaska. The court found no coverage because the underlying complaint alleged damages that were the "natural and probably consequence" of AES's intentional actions. Consequently, the court noted that the complaint did not allege a fortuitous accident or event. As we explain in the article, Kivalina is an Inupiat island community in the Arctic waters just off the Alaskan coast. Residents sued ExxonMobil and others energy firms, claiming the companies' activities were contributing to global warming which damaged the sea ice that protects the island's coast from storms. Shoreline erosion, the suit claimed, would ultimately force the population to relocate.
As has happened in similar cases, the judge dismissed the case as centering on "non-justiciable" issues, or issues better addressed through political, rather than judicial, means. The underying case is on appeal.
To read the entire Business Insurance article, click here. (Free registration required to read the complete article.)