One of the issues that we cover closely is environmental coverage litigation, and particularly coverage issues similar to the coverage fights that are taking place about the massive Portland Harbor Superfund Site.  Our firm has been at the forefront of making good law on those coverage issues including the first decision establishing that carriers have a duty to defend against the EPA’s coercive “104(e)” information request demands, and also establishing that under Oregon law carriers have a duty to defend a “Potentially Responsible Party” (PRP) letter.  Both of those cases were decided under Oregon’s somewhat unique state law, but in arguing about the PRP letter issue we noted that almost all other states have decided that a PRP letter triggers the duty to defend, including just recently (December 2012), Alabama.  Unfortunately, for a variety of reasons, the policyholder who won that dispute about the existence of the duty to defend has now lost out on its bad faith claim, because the trial court determined that when the insurance company denied the claim the issue was fairly debatable, and therefore the decision was not made in bad faith.  This is an excellent illustration of how, even if Oregon caught up to most of the rest of the nation by enacting a bad faith cause of action (like HB 3160), insurance companies can often still avoid paying for taking aggressive coverage positions, rather than stepping up to the plate and giving the benefit of the doubt to their policyholders.

ALABAMA GAS CORPORATION v. TRAVELERS CASUALTY AND SURETY COMPANY, Dist. Court, ND Alabama 2013 – Google Scholar:

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