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Case Briefs
Insurer Lacks Standing to Subrogate Under CERCLA
On March 15, the U.S. Court of Appeals for the Ninth Circuit held that an insurer lacked standing to bring a subrogation suit under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) because the insurer failed to meet statutory requirements. Chubb Custom Ins. Co. v. Space, 710 F.3d 946 (9th Cir. 2013). The insurer, Chubb, paid $2.4 million under an insurance policy to its insured, Taube-Koret Campus for Jewish Life, for environmental cleanup costs on its property.
The insurer then filed an action against several parties seeking subrogation under ” 107(a) and 112(c) of CERCLA and asserting state law claims for statutory indemnity,
negligence per se and strict liability. The district court dismissed the operative third amended complaint with prejudice, and the Ninth Circuit affirmed on appeal. Amicus curiae briefs were also submitted on behalf of an insurer and United Policyholders.
The majority agreed with the dismissal of Chubb's subrogation claim under '112(c), which provides for statutory subrogation for “any claimant for damages or costs resulting from a release of a hazardous substance ' .” (emphasis added). The term “claimant” is statutorily defined as a person who demands compensation for damages or costs from the Superfund or a potentially responsible party. The court interpreted this definition to require the insured to make a formal demand on the defendants or the Superfund in order for the insurer to properly assert standing for a ' 112 subrogation action. The court felt that requiring the insured to make such a demand was not unduly burdensome as “[i]nsurance companies write their policies in a way to require reasonable cooperation from their insureds.”
The court also agreed that the insurer lacked standing to assert a claim under ' 107(a) which permits private parties to recover certain “costs of response” incurred in connection with the remediation of a polluted site. ' Matthew C. Elstein, Laura G. Ryan and Jeannie P. Lee, Gordon & Rees LLP
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Insurer Lacks Standing to Subrogate Under CERCLA
On March 15, the U.S. Court of Appeals for the Ninth Circuit held that an insurer lacked standing to bring a subrogation suit under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) because the insurer failed to meet statutory requirements.
The insurer then filed an action against several parties seeking subrogation under ” 107(a) and 112(c) of CERCLA and asserting state law claims for statutory indemnity,
negligence per se and strict liability. The district court dismissed the operative third amended complaint with prejudice, and the Ninth Circuit affirmed on appeal. Amicus curiae briefs were also submitted on behalf of an insurer and United Policyholders.
The majority agreed with the dismissal of Chubb's subrogation claim under '112(c), which provides for statutory subrogation for “any claimant for damages or costs resulting from a release of a hazardous substance ' .” (emphasis added). The term “claimant” is statutorily defined as a person who demands compensation for damages or costs from the Superfund or a potentially responsible party. The court interpreted this definition to require the insured to make a formal demand on the defendants or the Superfund in order for the insurer to properly assert standing for a ' 112 subrogation action. The court felt that requiring the insured to make such a demand was not unduly burdensome as “[i]nsurance companies write their policies in a way to require reasonable cooperation from their insureds.”
The court also agreed that the insurer lacked standing to assert a claim under ' 107(a) which permits private parties to recover certain “costs of response” incurred in connection with the remediation of a polluted site. ' Matthew C. Elstein, Laura G. Ryan and Jeannie P. Lee,
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'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
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