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Insurers must pay for hazardous waste site cleanup, court rules

August 9, 2012 | 12:37 pm

Stringfellow Acid Pits

The state of California will be able to collect tens of millions of dollars from insurance companies for cleanup of the Stringfellow Acid Pits hazardous waste site, the California Supreme Court ruled Thursday.

In a unanimous decision, the state high court said consecutive insurance policies by various companies required them to pay up to their policy limits for damage caused by the waste site. The companies wanted to restrict liability to just a share of the damage that occurred during the time each insurer’s policy was in effect.

“In cases such as this it is impossible to prove precisely what property damage occurred during any specific policy period,” Justice Ming W. Chin wrote for the court. “The fact that all policies were covering the risk at some point during the property loss is enough to trigger the insurers’ indemnity obligation.”

California has been fighting with its insurance companies over Stringfellow for years, and Thursday’s decision was eagerly awaited by both sides.

The ruling, based on the language in the insurance policies, affects situations in which multiple insurance companies have provided coverage for a site with continual damage, like toxic pollution. Consumers who buy multiple policies and pay multiple premiums will be able to collect up to the policy limit from each company, the court ruled.

The state operated Stringfellow, an industrial waste disposal site in Riverside County, from 1956 to 1972. A federal court in 1996 held the state liable for cleaning up contaminants that had leaked into underground water. The state has estimated cleanup will cost several hundred million dollars.

Roger W. Simpson, who represented the state in the case, said the companies involved in the litigation now owe California as much as $60 million, including interest. The state already has collected $120 million in settlements from other insurance companies.

Simpson said the ruling will protect policy holders in other cases involving long-term contamination.  An attorney for the insurance companies was unavailable for comment.


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Photo: The contaminated site of Stringfellow Acid Pits, dotted with water pumps and wells to extricate contaminated ground water, in 2005. Credit: Irfan Khan / Los Angeles Times