The Ninth Circuit Court of Appeals ruled that a letter from the EPA under section 104(e) of CERCLA, requesting information from a landowner at a Superfund site, constitutes a "suit" and therefore triggers an insurer's duty to defend. This decision, along with previous trial court rulings in Oregon, establishes that insurers must defend policyholders who receive such information request letters. The court's interpretation of Oregon's environmental insurance claims statute, the OECAA, broadened the definition of "suit" and rejected arguments that the statute impaired contracts. This ruling may impact many involved at the Portland Harbor Superfund Site and other contaminated sites in Oregon.

1. Environmental & Natural Res. Section
E – OUTLOOK
ENVIRONMENTAL HOT TOPICS AND LEGAL
UPDATES
Year 2013
Issue 4
Environmental & Natural Resources Law
Section
OREGON STATE BAR
Editor's Note: We reproduced the entire article below. Any opinions expressed in this article are
those of the author alone. For those who prefer to view this article in PDF format, a copy will be
posted on the Section’s website at: http://www.osbenviro.homestead.com/.
For further information about insurer liability under Oregon law, make sure to attend the
upcoming FREE CLE on October 16, 2013 from 12:00 - 1:00 pm at Miller Nash LLP, or by
telephone. For information and to RSVP, contact Anzie Nelson at
Anzie.Nelson@portofportland.com.
Anderson Brothers, Inc. v. St. Paul Fire and Marine Insurance Company
Seth H. Row
Parsons Farnell & Grein LLP
You learned in Insurance 101 that a liability insurer’s obligation to defend is only
triggered if there has been a “suit.” But what is a “suit,” particularly in an area now
dominated by regulatory enforcement, like environmental law? Modern insurance
policies explicitly define the term “suit,” but older policies – the kind that are
usually relied on in “long-tail” claims, like Superfund claims – do not. Does a letter
from the U.S. Environmental Protection Agency (“EPA”) under Section 104(e) of the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), requesting information from a landowner within a Superfund site,

2. constitute a “suit”? That issue is at the heart of several cases now pending in
Oregon’s federal courts. On August 30, 2013, the Ninth Circuit Court of Appeals
ruled in the first of those cases to reach the appellate level. The Ninth Circuit agreed
with U.S. District Judge Michael Mosman that a Section 104(e) letter – or a General
Notice Letter (“GNL”) – constitutes a “suit,” and under most general liability
policies will require that the insurance company defend. See Anderson Bros. v. St.
Paul Fire & Marine Ins. Co., No. 3:11-cv-00137-MO (9th Cir Aug. 30, 2013).
The Anderson Brothers decision did not happen in a vacuum. In three cases in
Oregon arising out of the Portland Harbor Superfund Site, three different judges
have required insurers to provide a defense to a Section 104(e) letter. Those
decisions were the first in the nation to substantively address the impact of a 104(e)
letter. Why is Oregon making new law? In part, this has become a hot-button issue
because of the way that the EPA has prosecuted the Site, sometimes using 104(e)
letters in lieu of a GNL. But more importantly, Oregon is leading on this issue
because of its unique environmental insurance claims statute, the Oregon
Environmental Cleanup Assistance Act (“OECAA”). The OECAA provides a “rule
of construction” for the term “suit” if that term is not defined in the policy. The rule
of construction in the statute requires that courts use a broad definition for the
term.
The Ninth Circuit affirmed Judge Mosman’s finding that a 104(e) letter is a “suit"
under the OECAA standard. It rejected arguments from the insurance industry that
pre-OECAA case law had limited “suit” to more formal, and more clearly
adversarial, communications from DEQ, EPA, or other similar agencies, and that the
OECAA’s definition of “suit” (which had never been applied in court before) could
not expand beyond that case law. The court recognized the coercive nature of EPA's
enforcement authority under CERCLA and that the EPA’s information request to
Anderson was an "intrusive questionnaire the answers to which exposed [the
policyholder] to extensive liability—plainly an end obtained through legal
process." The Court also rejected the insurance company’s argument that the
OECAA’s rule of construction is unconstitutional as an impairment of contract.
This decision, and other trial-court-level coverage decisions in other pending cases,
may have a significant impact on those involved at the Portland Harbor Superfund
Site, and other contaminated sites. Because of the way EPA has used 104(e) letters at

3. this Site, hundreds of thousands of dollars were spent by many entities prior to
receipt of a GNL. In addition, the court’s approach to how the OECAA intersects
with the case law bolstered the potential usefulness of that statute
generally. Finally, the court’s rejection of the constitutional challenge may have
prefigured coming fights over the constitutionality of other portions of the OECAA,
including portions that were amended by the Legislature in the last session.
E-Outlook October, 2013
If you would like to contribute to E-Outlook or have any comments, please contact the EOutlook Editor, Sarah Liljefelt, at s.liljefelt@water-law.com or (503) 281-4100.
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