Chubb Custom Insurance Company v. Space Systems/ Loral, Inc.
710 F.3d 946
| 9th Cir. | 2013Background
- Chubb paid Taube-Koret $2.4 million for its cleanup costs under an environmental insurance policy.
- Chubb seeks subrogation from multiple polluters for Taube-Koret’s site remediation under CERCLA §§107(a) and 112(c) and under state law.
- Taube-Koret’s properties include 901 and 851 San Antonio Road and 3825, 3963, 3977 Fabian Way in Palo Alto, CA, with VOCs, PCBs, and other contaminants.
- Water Board orders from 1989–2009 named various defendants as dischargers and required cleanup; Taube-Koret complied with remediation plans.
- District court dismissed TAC with prejudice for lack of standing under §107(a) (insurer not incurring costs) and for Taube-Koret not being a CERCLA “claimant” under §112(c); state-law claims were time-barred.
- Chubb appeals, arguing insurer subrogation under §107(a) is possible and Taube-Koret need not be a claimant for §112(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Chubb may sue under §112(c) by subrogation without Taube-Koret qualifying as a claimant | Chubb seeks subrogation despite Taube-Koret not making a CERCLA claim | Taube-Koret must be a CERCLA claimant for §112(c) subrogation to lie | Chubb lacks standing under §112(c) because Taube-Koret is not a claimant. |
| Whether Chubb may bring a §107(a) subrogation claim since it did not incur its own response costs | Subrogation should be allowed under §107(a) via insurer reimbursement | §107(a) only allows parties that incur costs; insurer reimbursement does not count | §107(a) does not authorize insurer subrogation where the insurer did not incur response costs. |
| How §107(a) and §112(c) interact within CERCLA’s remedial scheme and purpose | Subrogation under §107(a) would complement §112(c) | Allowing §107(a) subrogation would nullify §112(c) and undermine CERCLA’s framework | The provisions are complementary; however, §107(a) cannot be read to expand insurer subrogation when not incurred costs, preserving §112(c)’s structure. |
| Whether Chubb’s California state-law subrogation claims are time-barred | State claims relate to Taube-Koret’s recovery; accrual should align with subrogation | Limitations accrue when Taube-Koret knew of contamination or when damages occurred; untimely | State-law claims are time-barred under Cal. Code Civ. Proc. §338(b) given accrual timing. |
Key Cases Cited
- Carson Harbor Vill., Ltd. v. Cnty. of Los Angeles, 433 F.3d 1260 (9th Cir. 2006) (CERCLA remedial scheme and cost-recovery framework in CERCLA context)
- United States v. Atlantic Research Corp., 551 U.S. 128 (U.S. 2007) ( Supreme Court on 107(a) vs 113(f) relationship and costs incurred vs reimbursement)
- United States v. California, 507 U.S. 746 (U.S. 1993) (statutory interpretation and common-law background in CERCLA context)
- Atlantic Research Corp. (same as above), 551 U.S. 128 (U.S. 2007) (see above (duplicate entry kept to maintain format))