Motions to Dismiss and Strike Environmental Waste Subrogation Case Defeated

This week in one of my cases in which we represent an insurer seeking subrogation recovery, after briefing and oral argument, the District Court, Eastern District of California, denied defendants’ omnibus motions to dismiss and strike our Complaint which we filed on behalf of our insurance carrier client in an environmental waste subrogation recovery action.

The Complaint alleges claims under CERCLA (sections 112 and 113), the California Hazardous Substance Account Act, and common law equitable indemnity, apportionment of fault, contribution and subrogation.   In summary, our insurance carrier client paid substantial money on behalf of its insured to cleanup an environmental waste spill – the subrogation action is to recover the costs incurred from the actual parties that are alleged to be at fault for causing the spill.

In their motions to dismiss and strike defendants argued every imaginable argument possible, including, for example, issues relating to standing as a claimant, defendants’ arranger and/or transporter status, satisfying CERCLA section 113 requirements that there be either current or prior litigation or administrative or judicially approved settlement that resolves liability to the United States or a State, allegations of agency between the various defendants, whether the waste oil was a “hazardous substance” or subject to the petroleum exclusion, consistency or not inconsistency with the national contingency plan, preemption, and on and on. 

After lengthy oral argument at hearing the Court issued its Memorandum and Order denying both the motion to dismiss and the motion to strike in their entirety. The Judge’s Memorandum and Order essentially follows all of our arguments and citations in opposition to the motions.

As you may be aware insurer environmental subrogation continues to be a developing and sometimes complicated area of law including for example the important Ninth Circuit 2013 decision in CHUBB Custom Ins. v. Space Systems/Loral, Inc.  Federal statutory, state statutory and state common law claims differ, and it remains important that standing be established, procedural requirements are followed, necessary demands are timely made, and costs are incurred for appropriate environmental waste cleanup expenses that are not inconsistent with the national contingency plan and with appropriate approval and settlement and release from liability.  There also remain unresolved legal issues in the area of environmental subrogation litigation.

The case now continues with disclosures and discovery.

Have a great day. Dave Tate

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