Coverage for Environmental Compliance Costs

Policyholders and carriers have litigated extensively on many questions related to the availability of coverage for the costs that policyholders incur in responding to such regulatory demands, and carriers have successfully asserted that some of these forms of relief do not result from accidents of the type that general liability policies are intended to cover, but are prophylactic measures intended to prevent such accidents. See, e.g., Hazen Paper Co. v. U.S. Fidelity and Guar. Co., 555 N.E.2d 576, 582 (Mass. 1990) (“Damages on account of property damage do not include costs incurred in complying with an injunction or order directed to damage prevention or costs incurred in complying with the law, where there has been no property damage.”). Applying traditional principles of contract interpretation, most courts have looked to policy language that limits coverage to, e.g., “damages ' caused by an occurrence,” and concluded that the effect of this and other policy language is to exclude from coverage future occurrences or damages that have not yet happened. See, e.g., Cinergy Corp. v. Assoc. Elec. & Gas Ins. Serv., Ltd., 865 N.E.2d 571, 582 (Ind. 2007) [hereinafter "Cinergy I"] (“[T]he policy ' applies only if damages claimed by the [policyholders] ' constitute damages because of bodily injury or property damage caused by an accident, event, or exposure to conditions. The clear and unmistakable import of the phrase “caused by” is that the accident, event, or exposure to conditions must have preceded the damages claimed ' here, the costs of installing emission control equipment.”) (emphasis in original). Thus, while the majority of courts have held that remedial response costs are compensable “damages” within the meaning of standard general liability policies, courts have consistently recognized that purely preventative measures intended to prevent future releases of hazardous waste are not covered. See EnergyNorth Natural Gas, Inc. v. Century Indem. Co., 452 F.3d 44, 54-55 (1st Cir. 2006) (discussing New Hampshire law and reviewing the majority rule).

Although the logical force of the rule adopted in these cases is clear, the application of the remedial/preventative dichotomy can be problematic. As the First Circuit recognized in EnergyNorth, in cases involving environmental contamination, costs are frequently incurred for measures intended both to remove past contamination and to prevent future damage, with the result that “the distinction between 'remedial' and 'preventative' costs cannot always be neatly drawn.” Id. at 55. The facts in EnergyNorth vividly illustrate this difficulty: The case involved a dispute over the costs to erect a steel “barrier wall” between the site and a nearby river and to construct “soil caps” around contaminated areas, measures that were intended to contain the future effects of past discharges of tar into the soil. See Id. at 53-54. Cases involving contamination to soil and groundwater frequently require this type of difficult line drawing, and courts have taken different approaches to applying the seemingly straightforward principle articulated above. Compare EnergyNorth, 452 F.3d at 55-56 (holding costs for barrier wall and soil caps to be remedial because these measures reflected efforts to address past, not future, discharges of pollutants) with Schnitzer Inv. Corp. v. Certain Underwriters at Lloyd's of London, 137 P.3d 1282, 1286 (Or. 2006) (holding that costs associated with a soil cap and ongoing monitoring in response to past discharges of pollutants relate to possible future harm to groundwater and were not covered “property damage”).

While it is important to be aware that policyholders may make claims for uncovered preventative measures in all kinds of environmental pollution cases, a series of recent cases points to the possibility of a brighter line between remedial and preventative costs in the air pollution context and underscores the need for insurers to be especially vigilant in scrutinizing all elements of claimed “damages” that relate to alleged violations of federal or local air pollution laws. In part due to the difficulty of remediating past damage to the air, the relief sought in such cases is likely to involve measures aimed at preventing future discharges of pollution.

Recent Application in Air Pollution Cases

A series of recent cases in Indiana have held that the installation of emissions control equipment and other costs of compliance with air pollution regulations involved preventative measures not covered by standard general liability policies.

In Cinergy I, decided by the Indiana Supreme Court in 2007, several power companies were sued in federal court for alleged violations of the Clean Air Act and sought, in a state court declaratory judgment action, to compel their insurers to pay past and future defense costs. 865 N.E.2d at 573. The policyholders argued that the federal complaint, which sought among other relief, an order forcing the power companies to “remedy, mitigate and offset the harm to public health and the environment caused by the violations of the Clean Air Act,” involved “damages” within the meaning of the policy. Id. at 578-79. However, according to the Cinergy I court, the parties essentially agreed that the thrust of the federal lawsuit was to require the power companies to incur the costs of installing government-mandated equipment intended to prevent future environmental harm; they disagreed as to whether these costs were covered under the policies and could thus trigger the duty to defend. See Id. at 579.

The court held that the policies did not cover the costs of installing equipment intended to prevent future harm:

[W]hat the power companies here claim to be covered, the installation costs for equipment to prevent future emissions, is not caused by the happening of an accident, event, or exposure to conditions but rather result from the prevention of such an occurrence. We cannot read the policy requirement that covered damages result from the happening of an occurrence to mean that coverage extends to damages that result from the prevention of an occurrence. Id. at 582-83 (emphasis in original).

As a result, the carriers had no duty to defend suits seeking these costs, and the Cinergy I court therefore denied the policyholders' motion for partial summary judgment on the issue of defense costs, although the decision left open the possibility of apportionment of defense costs in the event that other relief sought in the underlying federal suit was found to constitute covered damages, i.e., was unrelated to equipment intended to prevent future environmental harm. See Id. at 583.

Following the Supreme Court's decision in Cinergy I, two opinions of the Court of Appeals of Indiana have reached similar results. In Newnam Mfg., Inc. v. Transcontinental Ins. Co., the policyholder foundry owner was ordered by a state agency to apply for permits and install equipment to reduce emissions in order to comply with Indiana air pollution laws. 871 N.E.2d 396, 399-400, 403 (Ind. Ct. App. 2007). After winning a declaratory judgment that the regulatory order could not be enforced against it, the policyholder sought reimbursement of its defense costs from its CGL carrier. Id. at 400. The policyholder argued that its suit against the regulator involved “property damage” because its unlawful emissions had caused significant deterioration to the environment and the quality of the air, and that the only way to remediate this damage was to limit further emissions. See Id. at 403-04. The appellate court found that the Supreme Court had refuted this argument in Cinergy I and followed the court's approach in looking to the allegations and relief sought in the underlying order, holding that there was no “property damage” or “personal injury” within the meaning of the policy, and no covered “damages” of any kind. See Id. at 404-05. The court further held that, as in Cinergy I, whatever costs were incurred by the policyholder could not be interpreted to have been “caused by an occurrence” within the meaning of the policy, concluding that because there was no potential for coverage under the policy, the carrier's duty to defend was not triggered. Id. at 403-05.

A subsequent decision arose out of the same multi-site dispute between power companies and their insurance carriers addressed in the Supreme Court's Cinergy I decision. See Cinergy Corp. v. St. Paul Surplus Lines Ins. Co., 873 N.E.2d 105, 107-09 (Ind. Ct. App. 2007) [hereinafter "Cinergy II"]. After claims regarding one power plant facility were dismissed from the underlying federal suit, the insurers moved for summary judgment with regard to the power companies' claim for the reimbursement of defense costs associated with that site. Id. at 109. The Court of Appeals indicated that it was bound by the Supreme Court's previous characterization of the same underlying complaint as “directed at preventing future public harm, not at obtaining control, mitigation, or compensation for past or existing environmentally hazardous emissions.” Id. at 114 (quoting Cinergy I, 865 N.E.2d at 582). The court followed the logic of the earlier decision, finding that the preventative measures sought in the underlying suit were not “caused by an occurrence” and took that logic one step further in holding: “[N]ot only was there no actual occurrence bringing the claims against Cinergy within the terms of the policies, but also there was never a potential occurrence under the terms of the policies.” Id. at 115. Because there was no “occurrence” within the meaning of the policies, the insurers had no duty to reimburse the power companies' defense costs. Id.

Recent Litigation in New Jersey

In a case recently litigated in New Jersey Superior Court, Thomas & Betts Corp. v. The Travelers Ins. Co. (Middlesex County Docket No. L-1997-00), a similar result was reached, although the facts varied in several ways from those of the Cinergy line of cases.

In that case, the policyholder brought a coverage action after it was sued by local and state agencies, as well as private neighbors, for alleged violations of the Texas Clean Air Act (“TCAA”) resulting from operations at the policyholder's transmission pole manufacturing facility. The manufacturing processes at the facility, which operated 24 hours a day, involved outdoor sandblasting and spray coating operations and the use of trucks and other heavy machinery along unpaved roads at the site. For many years, the policyholder operated its facility on the outskirts of Houston in what was, at the time, a sparsely populated area. However, as years passed, the surrounding area developed until the facility was immediately adjacent to a residential neighborhood. The facility's neighbors eventually complained about spray paint particles coating their automobile windshields, allergies to sandblasting particles and to dust kicked up by traffic along the unpaved roads, and about lights and noise from nighttime operations at the plant. After receiving a claim for property damage from its policyholder, the insurance carrier paid some small sums to, for example, replace windshields damaged by the overspray. However, when the same neighbors subsequently sued the policyholder alleging more serious property damage and raising concerns about health risks at the same time that Texas regulators made clear their intention to file suit over alleged violations of the TCAA, the carrier reserved its rights in response to the policyholder's demands for defense and indemnification.

The policyholder reached a settlement with its neighbors for $100,000. Under a settlement agreement with the Texas regulatory authorities, however, the policyholder undertook to spend several million dollars to address the problems at its facility. Among other measures, the policyholder agreed to: 1) pave the unpaved roads and certain other areas of the facility, 2) construct a new building in which to carry on its sandblasting and spray coating activities, and 3) construct an acoustical wall and make other improvements to reduce noise and light due to operations at night. Interestingly, the Texas regulators did not actually bring a lawsuit until the policyholder had already agreed to make the improvements. Thus, the lawsuit by the regulators and the settlement with the regulators were filed simultaneously.

The carrier defended the coverage action on three primary grounds. First, none of the costs was related to an “occurrence” or accident because there was no fortuity. It is to be expected that when heavy trucks are driven on unpaved roads, dust will be stirred up or that when lights are turned on at night the light will travel from the facility to the surrounding neighborhood. Second, except for the noise and light, there was no coverage by virtue of the absolute pollution exclusions in each relevant policy, dust, sandblasting particles and paint overspray, all coming within the exclusion. Third, and most relevant here, the paving and construction measures that the policyholder agreed to undertake were preventative measures not covered under the policies. Unlike the earlier efforts to replace damaged windshields and other property, these capital improvements to the policyholder's facility were not aimed at remedying the property damage that its operations had caused, but reflected efforts to prevent future harm to the environment and surrounding property and to avoid additional regulatory violations.

The dispute was governed by Texas law, but since Texas courts had not addressed this issue, the carrier cited the Indiana Supreme Court's decision in Cinergy I as persuasive authority. Ruling from the bench, the court granted the carrier's motion for summary judgment on two grounds: There was no “occurrence” within the meaning of the policy and that, in any event, the claim was excluded under the total pollution exclusion. The former ground for decision is in line with the result in Cinergy II that there was no “occurrence” within the meaning of the policy.

Conclusion

Although the distinction between remedial costs, which are generally considered recoverable, and costs for preventative measures, which are generally not recoverable, can be difficult to draw in the context of environmental pollution claims, recent case law suggests the possibility of a brighter line between the two in the air pollution context. The Cinergy line of cases in Indiana illustrates courts attempting to discern what mandated corrective measures are intended to accomplish and concluding that measures like the installation of emissions control equipment or physical barriers to contain air pollution can only be viewed as preventative in nature. This should be so regardless of whether the air pollution can be said to have caused “property damage” in the past. As a practical matter, the remediation of past damage to the air is difficult or impossible, so insurance carriers should carefully scrutinize each element of relief sought in claims related to air pollution, which are likely to involve measures aimed at preventing future discharges of pollution not covered under general liability policies.

Robert D. Goodman, a member of this newsletter's Board of Editors, is a Partner and Harry Zirlin and Adam M. Smith are Associates in the New York office of Debevoise & Plimpton LLP, where they represent and advise insurers in complex coverage and other policyholder and regulatory litigation.

With the financial crisis occupying the Obama administration, the anticipated barrage of new environmental laws, policies, and regulations has yet to materialize. When the switch is turned on, however, the costs to policyholders are likely to be substantial, and just as likely, policyholders will test whether some of those costs can be passed on to their carriers. Some of these projected costs will relate to requirements for new equipment or for upgrades to existing equipment to reduce greenhouse gas emissions, while others may flow from increased enforcement following eight years of relative laxity by federal regulators. Now, therefore, is an appropriate time to examine the current state of the law with respect to the distinction between remedial costs, which are generally considered recoverable in the absence of an effective pollution exclusion, and costs for preventative measures, which are generally not recoverable. This article explores recent case law that suggests the possibility of a brighter line between remedial and preventative costs in the air pollution context and reviews a recent successful coverage defense involving air pollution in which the distinction between remedial costs and preventative measures was litigated.

The Remedial/Preventative Dichotomy

In enforcing anti-pollution laws and addressing violations of these laws, federal and state agencies responsible for protecting the environment are often empowered to seek not only the reimbursement of costs associated with remediation of environmental contamination, but also a sweeping range of injunctive relief aimed at requiring investigation and cleanup of contaminated sites, compelling compliance with relevant regulations, mandating ongoing environmental monitoring, or requiring other steps to address past, ongoing, or future contamination. When faced with costly regulatory actions, policyholders have turned to their general liability insurance carriers for coverage, raising questions regarding which forms of forward-looking relief may be covered under the terms of general liability policies.

Policyholders and carriers have litigated extensively on many questions related to the availability of coverage for the costs that policyholders incur in responding to such regulatory demands, and carriers have successfully asserted that some of these forms of relief do not result from accidents of the type that general liability policies are intended to cover, but are prophylactic measures intended to prevent such accidents. See, e.g., Hazen Paper Co. v. U.S. Fidelity and Guar. Co. , 555 N.E.2d 576, 582 (Mass. 1990) (“Damages on account of property damage do not include costs incurred in complying with an injunction or order directed to damage prevention or costs incurred in complying with the law, where there has been no property damage.”). Applying traditional principles of contract interpretation, most courts have looked to policy language that limits coverage to, e.g., “damages ' caused by an occurrence,” and concluded that the effect of this and other policy language is to exclude from coverage future occurrences or damages that have not yet happened. See, e.g., Cinergy Corp. v. Assoc. Elec. & Gas Ins. Serv., Ltd. , 865 N.E.2d 571, 582 (Ind. 2007) [hereinafter " Cinergy I "] (“[T]he policy ' applies only if damages claimed by the [policyholders] ' constitute damages because of bodily injury or property damage caused by an accident, event, or exposure to conditions. The clear and unmistakable import of the phrase “caused by” is that the accident, event, or exposure to conditions must have preceded the damages claimed ' here, the costs of installing emission control equipment.”) (emphasis in original). Thus, while the majority of courts have held that remedial response costs are compensable “damages” within the meaning of standard general liability policies, courts have consistently recognized that purely preventative measures intended to prevent future releases of hazardous waste are not covered. See EnergyNorth Natural Gas, Inc. v. Century Indem. Co. , 452 F.3d 44, 54-55 (1st Cir. 2006) (discussing New Hampshire law and reviewing the majority rule).

Although the logical force of the rule adopted in these cases is clear, the application of the remedial/preventative dichotomy can be problematic. As the First Circuit recognized in EnergyNorth, in cases involving environmental contamination, costs are frequently incurred for measures intended both to remove past contamination and to prevent future damage, with the result that “the distinction between 'remedial' and 'preventative' costs cannot always be neatly drawn.” Id. at 55. The facts in EnergyNorth vividly illustrate this difficulty: The case involved a dispute over the costs to erect a steel “barrier wall” between the site and a nearby river and to construct “soil caps” around contaminated areas, measures that were intended to contain the future effects of past discharges of tar into the soil. See Id. at 53-54. Cases involving contamination to soil and groundwater frequently require this type of difficult line drawing, and courts have taken different approaches to applying the seemingly straightforward principle articulated above. Compare EnergyNorth , 452 F.3d at 55-56 (holding costs for barrier wall and soil caps to be remedial because these measures reflected efforts to address past, not future, discharges of pollutants) with Schnitzer Inv. Corp. v. Certain Underwriters at Lloyd's of London , 137 P.3d 1282, 1286 (Or. 2006) (holding that costs associated with a soil cap and ongoing monitoring in response to past discharges of pollutants relate to possible future harm to groundwater and were not covered “property damage”).

While it is important to be aware that policyholders may make claims for uncovered preventative measures in all kinds of environmental pollution cases, a series of recent cases points to the possibility of a brighter line between remedial and preventative costs in the air pollution context and underscores the need for insurers to be especially vigilant in scrutinizing all elements of claimed “damages” that relate to alleged violations of federal or local air pollution laws. In part due to the difficulty of remediating past damage to the air, the relief sought in such cases is likely to involve measures aimed at preventing future discharges of pollution.

Recent Application in Air Pollution Cases

A series of recent cases in Indiana have held that the installation of emissions control equipment and other costs of compliance with air pollution regulations involved preventative measures not covered by standard general liability policies.

In Cinergy I, decided by the Indiana Supreme Court in 2007, several power companies were sued in federal court for alleged violations of the Clean Air Act and sought, in a state court declaratory judgment action, to compel their insurers to pay past and future defense costs. 865 N.E.2d at 573. The policyholders argued that the federal complaint, which sought among other relief, an order forcing the power companies to “remedy, mitigate and offset the harm to public health and the environment caused by the violations of the Clean Air Act,” involved “damages” within the meaning of the policy. Id. at 578-79. However, according to the Cinergy I court, the parties essentially agreed that the thrust of the federal lawsuit was to require the power companies to incur the costs of installing government-mandated equipment intended to prevent future environmental harm; they disagreed as to whether these costs were covered under the policies and could thus trigger the duty to defend. See Id. at 579.

The court held that the policies did not cover the costs of installing equipment intended to prevent future harm:

[W]hat the power companies here claim to be covered, the installation costs for equipment to prevent future emissions, is not caused by the happening of an accident, event, or exposure to conditions but rather result from the prevention of such an occurrence. We cannot read the policy requirement that covered damages result from the happening of an occurrence to mean that coverage extends to damages that result from the prevention of an occurrence. Id. at 582-83 (emphasis in original).

As a result, the carriers had no duty to defend suits seeking these costs, and the Cinergy I court therefore denied the policyholders' motion for partial summary judgment on the issue of defense costs, although the decision left open the possibility of apportionment of defense costs in the event that other relief sought in the underlying federal suit was found to constitute covered damages, i.e., was unrelated to equipment intended to prevent future environmental harm. See Id. at 583.

Following the Supreme Court's decision in Cinergy I, two opinions of the Court of Appeals of Indiana have reached similar results. In Newnam Mfg., Inc. v. Transcontinental Ins. Co., the policyholder foundry owner was ordered by a state agency to apply for permits and install equipment to reduce emissions in order to comply with Indiana air pollution laws. 871 N.E.2d 396, 399-400, 403 (Ind. Ct. App. 2007). After winning a declaratory judgment that the regulatory order could not be enforced against it, the policyholder sought reimbursement of its defense costs from its CGL carrier. Id. at 400. The policyholder argued that its suit against the regulator involved “property damage” because its unlawful emissions had caused significant deterioration to the environment and the quality of the air, and that the only way to remediate this damage was to limit further emissions. See Id. at 403-04. The appellate court found that the Supreme Court had refuted this argument in Cinergy I and followed the court's approach in looking to the allegations and relief sought in the underlying order, holding that there was no “property damage” or “personal injury” within the meaning of the policy, and no covered “damages” of any kind. See Id. at 404-05. The court further held that, as in Cinergy I, whatever costs were incurred by the policyholder could not be interpreted to have been “caused by an occurrence” within the meaning of the policy, concluding that because there was no potential for coverage under the policy, the carrier's duty to defend was not triggered. Id. at 403-05.

A subsequent decision arose out of the same multi-site dispute between power companies and their insurance carriers addressed in the Supreme Court's Cinergy I decision. See Cinergy Corp. v. St. Paul Surplus Lines Ins. Co. , 873 N.E.2d 105, 107-09 (Ind. Ct. App. 2007) [hereinafter " Cinergy II "]. After claims regarding one power plant facility were dismissed from the underlying federal suit, the insurers moved for summary judgment with regard to the power companies' claim for the reimbursement of defense costs associated with that site. Id. at 109. The Court of Appeals indicated that it was bound by the Supreme Court's previous characterization of the same underlying complaint as “directed at preventing future public harm, not at obtaining control, mitigation, or compensation for past or existing environmentally hazardous emissions.” Id. at 114 (quoting Cinergy I, 865 N.E.2d at 582). The court followed the logic of the earlier decision, finding that the preventative measures sought in the underlying suit were not “caused by an occurrence” and took that logic one step further in holding: “[N]ot only was there no actual occurrence bringing the claims against Cinergy within the terms of the policies, but also there was never a potential occurrence under the terms of the policies.” Id. at 115. Because there was no “occurrence” within the meaning of the policies, the insurers had no duty to reimburse the power companies' defense costs. Id.

Recent Litigation in New Jersey

In a case recently litigated in New Jersey Superior Court, Thomas & Betts Corp. v. The Travelers Ins. Co. (Middlesex County Docket No. L-1997-00), a similar result was reached, although the facts varied in several ways from those of the Cinergy line of cases.

In that case, the policyholder brought a coverage action after it was sued by local and state agencies, as well as private neighbors, for alleged violations of the Texas Clean Air Act (“TCAA”) resulting from operations at the policyholder's transmission pole manufacturing facility. The manufacturing processes at the facility, which operated 24 hours a day, involved outdoor sandblasting and spray coating operations and the use of trucks and other heavy machinery along unpaved roads at the site. For many years, the policyholder operated its facility on the outskirts of Houston in what was, at the time, a sparsely populated area. However, as years passed, the surrounding area developed until the facility was immediately adjacent to a residential neighborhood. The facility's neighbors eventually complained about spray paint particles coating their automobile windshields, allergies to sandblasting particles and to dust kicked up by traffic along the unpaved roads, and about lights and noise from nighttime operations at the plant. After receiving a claim for property damage from its policyholder, the insurance carrier paid some small sums to, for example, replace windshields damaged by the overspray. However, when the same neighbors subsequently sued the policyholder alleging more serious property damage and raising concerns about health risks at the same time that Texas regulators made clear their intention to file suit over alleged violations of the TCAA, the carrier reserved its rights in response to the policyholder's demands for defense and indemnification.

The policyholder reached a settlement with its neighbors for $100,000. Under a settlement agreement with the Texas regulatory authorities, however, the policyholder undertook to spend several million dollars to address the problems at its facility. Among other measures, the policyholder agreed to: 1) pave the unpaved roads and certain other areas of the facility, 2) construct a new building in which to carry on its sandblasting and spray coating activities, and 3) construct an acoustical wall and make other improvements to reduce noise and light due to operations at night. Interestingly, the Texas regulators did not actually bring a lawsuit until the policyholder had already agreed to make the improvements. Thus, the lawsuit by the regulators and the settlement with the regulators were filed simultaneously.

The carrier defended the coverage action on three primary grounds. First, none of the costs was related to an “occurrence” or accident because there was no fortuity. It is to be expected that when heavy trucks are driven on unpaved roads, dust will be stirred up or that when lights are turned on at night the light will travel from the facility to the surrounding neighborhood. Second, except for the noise and light, there was no coverage by virtue of the absolute pollution exclusions in each relevant policy, dust, sandblasting particles and paint overspray, all coming within the exclusion. Third, and most relevant here, the paving and construction measures that the policyholder agreed to undertake were preventative measures not covered under the policies. Unlike the earlier efforts to replace damaged windshields and other property, these capital improvements to the policyholder's facility were not aimed at remedying the property damage that its operations had caused, but reflected efforts to prevent future harm to the environment and surrounding property and to avoid additional regulatory violations.

The dispute was governed by Texas law, but since Texas courts had not addressed this issue, the carrier cited the Indiana Supreme Court's decision in Cinergy I as persuasive authority. Ruling from the bench, the court granted the carrier's motion for summary judgment on two grounds: There was no “occurrence” within the meaning of the policy and that, in any event, the claim was excluded under the total pollution exclusion. The former ground for decision is in line with the result in Cinergy II that there was no “occurrence” within the meaning of the policy.

Conclusion

Although the distinction between remedial costs, which are generally considered recoverable, and costs for preventative measures, which are generally not recoverable, can be difficult to draw in the context of environmental pollution claims, recent case law suggests the possibility of a brighter line between the two in the air pollution context. The Cinergy line of cases in Indiana illustrates courts attempting to discern what mandated corrective measures are intended to accomplish and concluding that measures like the installation of emissions control equipment or physical barriers to contain air pollution can only be viewed as preventative in nature. This should be so regardless of whether the air pollution can be said to have caused “property damage” in the past. As a practical matter, the remediation of past damage to the air is difficult or impossible, so insurance carriers should carefully scrutinize each element of relief sought in claims related to air pollution, which are likely to involve measures aimed at preventing future discharges of pollution not covered under general liability policies.

Robert D. Goodman, a member of this newsletter's Board of Editors, is a Partner and Harry Zirlin and Adam M. Smith are Associates in the New York office of Debevoise & Plimpton LLP, where they represent and advise insurers in complex coverage and other policyholder and regulatory litigation.