As part of EPA’s investigation of a Superfund site, EPA typically issues a 104(e) information request to any person or entity that EPA believes to have information regarding release of hazardous substances at the site, including those that may be considered to be PRPs charged with the ultimate cleanup of the site. Responding to a 104(e) request often requires the recipient to provide detailed responses regarding historical and current industrial operations, and can often set the stage for settlement negotiations with EPA and other PRPs regarding funding the investigation and remediation of the Superfund site. In an unpublished non-precedential opinion filed yesterday, the United States Court of Appeals for the Ninth Circuit ruled that receipt of a 104(e) information request for a Superfund site triggers an insurer’s duty to defend a policyholder for attorneys’ fees and related costs associated with responding to the request.

In January 2008, Ash Grove Cement Company received a 104(e) information request regarding contamination at the Portland Harbor Superfund Site, a 12-mile sediment cleanup project along the Willamette River in Portland Oregon. Ash Grove tendered a claim to its insurance providers, seeking coverage for defense costs incurred in responding to EPA’s information request. The insurers denied Ash Grove’s claim on the basis that the insurance policies at issue limited coverage to “suits” related to “property damage,” and that EPA’s information request was neither a “suit” nor contained any allegations of “property damage” for which Ash Grove could be potentially liable.

Ash Grove filed a declaratory judgment action against its insurers, arguing that the insurers had a duty to defend under Oregon law that was triggered by Ash Grove’s receipt of EPA’s information request. After a bench trial, United States District Court Judge Hernandez of the District of Oregon ruled in Ash Grove’s favor, and declared that the insurers were obligated to defend Ash Grove and reimburse its defense costs.

On appeal, the Ninth Circuit affirmed Judge Hernandez’s ruling, based primarily on a prior decision – Anderson Bros, Inc. v. St. Paul Fire & Marine Ins. Co., 729 F.3d 923 (9th Cir. 2013) – where Anderson Brothers, Inc., another recipient of an 104(e) request for the Portland Harbor Superfund Site, filed a nearly identical declaratory judgment action for defense costs associated with responding to EPA’s request. The Anderson Bros. case held that insurers had a duty to defend upon receipt of a 104(e) request, because such requests are the “functional equivalent” of a “suit” that requires legal defense. Furthermore, the general dictionary definition of a “suit” is not limited to a lawsuit in the strict sense, but rather includes “an attempt to gain and end by any legal process.” The Ninth Circuit ruled that this general definition would encompass a 104(e) request, since it compels the recipient to provide information about releases of hazardous substances that could expose the recipient to liability, and because a response to the request may result in the recipient being identified as a PRP at a Superfund site. Also, Oregon’s Environmental Cleanup Assistant Act declares that for the purposes of insurance coverage, a “suit” includes any instance where EPA in writing “directs, requests or agrees than an insured take action with respect to contamination.”

While federal and state courts remain divided on whether receipt of a CERCLA 104(e) request constitutes a “suit” triggering an insurer’s duty to defend, the Ninth Circuit’s ruling represents another case in support of a growing majority view that receipt of a 104(e) request can be the “functional equivalent” of a lawsuit requiring the insurer to provide defense coverage.