Segal McCambridge Attorneys Larry Mason and John Lee Obtain a Summary Judgment Dismissal of a Federal Court Environmental Insurance Coverage Action


March 22, 2012

Segal McCambridge obtained summary judgment on behalf of an insurance company client in a case involving the recovery of cleanup costs under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).

The plaintiff, which sought a declaratory judgment against multiple insurers for a contaminated oil refinery, had received a letter from the Environmental Protection Agency (EPA) in 2001, notifying them of their status as a potentially responsible party (PRP) in a CERCLA cleanup action. In its suit, the insured sought defense costs and indemnification for environmental cleanup costs yet to be determined.

On behalf of our client, we cross-moved for summary judgment, arguing that a duty to defend had never arisen and, if a duty to defend did arise, it arose in 2001 and was time-barred by the applicable statute of limitations.

The U.S. District Court ruled in favor of our client, noting that, "a PRP letter is not a polite invitation from the EPA to engage in conversation. It is an official agency action that has legal consequences, and a recipient ignores a PRP letter at its peril."

Senior shareholder Larry Mason and senior associate John Lee of Segal McCambridge handled the case, which involved extensive expert witness discovery.