Pennsylvania Commonwealth Court Confirms “Continuous Trigger” for Latent Environmental Property Damage Claims

K&L Gates
John M. Sylvester and John M. Hagan

April 26, 2017

In a significant decision for Pennsylvania insurance law, the Pennsylvania Commonwealth Court has ruled that a “continuous trigger” of coverage applies to long-term, latent environmental property damage claims. Specifically, in Pennsylvania Manufacturers’ Association Insurance Co. v. Johnson Matthey Inc.,1 a unanimous panel of the court rejected an attempt by the insurer, Pennsylvania Manufacturers’ Association Insurance Company (“PMA”), to apply a “first manifestation” trigger of coverage for the environmental coverage claim of the policyholder, Johnson Matthey Inc. (“Johnson Matthey”), under “occurrence-based” policies that PMA issued to Johnson Matthey in the 1960’s and 1970’s. Rather, the Court observed that the record of the case presented a long latency of continuing, undetected property damage taking place during the PMA policy periods, which supported a continuous trigger throughout that latency period, such as that adopted by the Pennsylvania Supreme Court for asbestos bodily injury claims in its seminal decision, J.H. France Refractories Co. v. Allstate Insurance Co.2 The Commonwealth Court rejected PMA’s argument that a recent Pennsylvania Supreme Court decision, Pennsylvania National Mutual Casualty Insurance Co. v. St. John,3 which had applied a “first manifestation” trigger to a non-environmental property damage coverage claim, should be followed in this case.

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EPA Retracts CERCLA Remedy Selection Authority from Regional Offices for Remedies that Exceed $50 Million

Beveridge & Diamond PC
Pamela D. Marks, Steven M. Jawetz and Gayatri M. Patel

May 11, 2017

On May 9, 2017, EPA Administrator Scott Pruitt issued two new delegations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) that limit to the Administrator (and possibly the Deputy Administrator) the authority to select remedies estimated to cost over $50 million. One delegation concerns Superfund sites generally; the other relates to federal facilities. Previously, all remedy selection was delegated to the Assistant Administrator for Office of Land and Emergency Management and the Regional Administrators. The authority to sign Records of Decision estimated to cost less than $50 million remains with those officials. A copy of the revised delegations and accompanying memorandum are available here.

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Leaking Underground Storage Tank Trust Fund: Petroleum Marketers Association of America Notes Omnibus Funding Level

Mitchell Williams Selig Gates & Woodyard PLLC
Walter Wright

May 9, 2017

The Petroleum Marketers Association of America (“PMAA”) addressed the funding level in the recently enacted Congressional spending package for the federal Leaking Underground Storage Tank (“LUST”) trust fund.

PMAA notes in a May 5th publication that the Omnibus Bill that funds the federal government through the fiscal year (September 30th) maintains the same level of funding as was provided in fiscal 2016 (i.e., LUST trust fund level at $91.9 million).

Congress created the LUST trust fund in 1986 to address petroleum releases from federally regulated underground storage tanks (“USTs”). The LUST trust fund provides money to:

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Coming of Age for Spill Act Liability: The State Is Not Considered a “Person” with Liability until after 1977

Riker Danzig Scherer Hyland & Perretti LLP
Alexa Richman-La Londe

May 10, 2017

Reprinted with permission. © 2016 Riker Danzig Scherer Hyland & Perretti LLP

Last month the New Jersey Supreme Court held that the State of New Jersey does not have cleanup liability for its actions that pre-date the 1977 enactment of the New Jersey Spill Compensation and Control Act (the “Spill Act”). NL Industries, Inc. v. State of New Jersey, (A-44-15)(076550)(Sup. Ct., March 27, 2017). This decision creates a disparity in liability for private parties, which have retroactive Spill Act liability, and the State, which does not. This case will certainly impact sites involving pre-1977 discharges where the State may have responsibility and now, as a result of this decision, will not have to contribute to the cost of the remediation. But, perhaps most striking about this decision is the Court’s rigorous application of the rules of statutory construction in reviewing the enactment of and amendments to the Spill Act. As a result, after a detailed and somewhat convoluted review, the Court said it could find no evidence that the Legislature clearly and unambiguously intended to abrogate the State’s sovereign immunity for pre-1977 discharges.

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