Insurance Companies Subrogating Against CERCLA PRPs? Ninth Circuit Holds No Can Do

Environmental Claims Journal

PUBLISHED ON: May 1, 2015

The United States Court of Appeals for the Ninth Circuit recently held that an insurance company cannot offset the costs of environmental insurance payments duly paid to its policyholder by taking advantage of the provisions of the federal Superfund or Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The insurance companies sought to be characterized as potentially responsible parties under CERCLA (PRPs) and obtain all of the resulting cost-recovery benefits, but none of the potential additional environmental liability. Leaving aside the issue of whether an insurance company can qualify independently as a PRP under CERCLA after the fact, an insurance company already can simply cooperate with its policyholder in bringing a separate claim together to recover costs from other PRPs. See Chubb Custom Ins. Co. v. Space Sys., 710 F.3d 946 (9th Cir. 2013), cert. denied, 134 S.Ct. 906 (2014) (Chubb).