177 F.3d 210 (3rd Cir. 1999), 97-5735, Chemical Leaman Tank Lines, Inc. v. Aetna Cas. and Sur. Co.
|Docket Nº:||CHEMICAL LEAMAN TANK LINES, INC., Appellant in No. 97-5735,|
|Citation:||177 F.3d 210|
|Case Date:||May 25, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued Sept. 15, 1998.
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Kevin B. Clark, John P. Dean (Argued), Conrad J. Smucker, Lisa K. Coleman, Willkie Farr & Gallagher, Washington, D.C., for Chemical Leaman Tank Lines, Inc., Appellant in No. 97-5735.
Henry Lee (Argued), Olympia Bizekis, Allen R. McKay, Mendes & Mount, New York, N.Y., and William S. Wachenfeld, Adam M. Smith, Mendes & Mount, Newark, NJ, for Robin Anthony Gildart Jackson, et al., Appellants in No. 97-5735.
3 Laura A. Foggan Elizabeth A. Eastwood Peter J. Skalaban, Jr. Wiley, Rein & Fielding 1776 K Street, N.W. Washington, D.C. 20006 Attorneys for Insurance Environmental Litigation Association, Amicus Curiae
Before: STAPLETON and ROTH, Circuit Judges, and LONGOBARDI, [*] District Judge
OPINION OF THE COURT
STAPLETON, Circuit Judge:
This appeal marks the second appearance of this case before our Court and comes after more than nine years of litigation. 1 Seeking indemnification for costs connected to the environmental cleanup of its Bridgeport, New Jersey, facility, Chemical Leaman initially filed this declaratory judgment and damages action against its primary and excess insurers in April, 1989.
Chemical Leaman is a tank truck company specializing in the transportation of various chemicals and other liquids. Since 1960, it has provided tank truck cleaning services at its Bridgeport truck terminal facility. In 1969, the New Jersey Department of Health ordered Chemical Leaman to construct a waste water treatment and/or disposal plant to alleviate the strong odors emanating from the on-site ponds and lagoons where Chemical Leaman disposed of water from the cleaning process. Chemical Leaman continued to use the ponds and lagoons system until it installed a water treatment system in 1975. By 1977, Chemical Leaman had drained and filled the ponds and lagoons.
In 1981, the New Jersey Department of Environmental Protection ordered Chemical Leaman to investigate the extent and degree of groundwater contamination at and around the Bridgeport site. The investigation revealed that the ponds and lagoons were primary sources of groundwater contamination. In 1984, the federal Environmental Protection Agency ("EPA") placed the Bridgeport site on the National Priorities List of Superfund sites pursuant to Section 105 of the Comprehensive Environmental Response, Compensation and Liabilities Act ("CERCLA"), 42 U.S.C. § 9605. The EPA alleged that Chemical
Leaman was strictly liable for injury to, destruction of, or loss of natural resources, as well as the reasonable costs of assessing such damage to natural resources, and for all costs of removal or remedial action incurred by the United States or the State of New Jersey.
In July 1985, Chemical Leaman entered into a consent order with the EPA, admitted liability under CERCLA, and agreed to remediate the Bridgeport site or pay for its remediation. Additionally, this order directed Chemical Leaman to undertake a Remedial Investigation and Feasibility Study ("RI/FS") of the groundwater. Chemical Leaman has incurred substantial costs in conducting this study and expects to accrue considerable future removal costs and damages.
After entering this consent order, Chemical Leaman notified its various insurers. Chemical Leaman had purchased comprehensive general liability ("CGL") policies from Aetna, its primary insurer, for one-year periods covering April 1, 1959, through April 1, 1985. Under these policies, Aetna agreed to pay on behalf of Chemical Leaman all sums that Chemical Leaman became legally obligated to pay as damages because of property damage. Additionally, Aetna agreed to defend Chemical Leaman in suits seeking recovery for such property damage. From April 1, 1971, through April 1, 1985, Aetna's policies contained a pollution exclusion, indicating that the policies did not apply to the discharge of pollutants unless such discharge was "sudden and accidental." Chemical Leaman had also purchased multi-year excess liability insurance policies through Lloyd's insurance market spanning the period April 1, 1958, through April 1, 1986. These excess policies covered property damage but did not contain a similar defense obligation. The excess policies covering April 1, 1971, through April 1, 1985 contained pollution exclusions similar to those in Aetna's CGL policies.
When these insurers denied coverage, Chemical Leaman, a Delaware corporation with its principal place of business in Pennsylvania, filed suit against Aetna, a Connecticut corporation with its principal place of business in Connecticut, and "Certain Underwriters at Lloyd's, London subscribing to Insurance Policies [specifically enumerated]." (LMIa47) The complaint claimed that diversity jurisdiction was proper and alleged that "Certain Underwriters" were "various insurance companies organized and existing under the laws of the United Kingdom." (LMIa48)
On August 9, 1989, the parties stipulated to a change in the complaint "substitut[ing] 'Robin Anthony Gildart Jackson, an Underwriter at Lloyd's, London on behalf of himself and all other Underwriters at Lloyd's, London, subscribing to [specifically enumerated policies], [and forty specifically named insurance companies]' in place of and instead of defendants 'Certain Underwriters at Lloyd's, London subscribing to Insurance Policies [specifically enumerated].' " (LMIa57-59) The stipulation stated that any final judgment against Jackson would be binding on those underwriters subscribing to the enumerated policies and thus within the scope of Jackson's purported representation. In a similar vein, the stipulation indicated that a final judgment in favor of Jackson would inure to the benefit of those same underwriters. 2 Jackson, the underwriters he is alleged to represent, and the specifically named insurance companies are underwriters of Chemical Leaman's various excess policies purchased through Lloyd's insurance market. This stipulation was signed by the attorneys for Chemical Leaman, Jackson, and the named insurance parties. On August 29, 1989, the District Court entered an order amending the complaint and designating Jackson and the named insurance
companies (hereinafter collectively "the excess insurers") as defendants.
Following extensive discovery, the parties filed cross-motions for summary judgment on various grounds. The District Court held that New Jersey...
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