Millennium Inorganic Chemicals Ltd. v. National Union Fire Insurance, 2012 U.S. Dist. LEXIS 140257

Millennium Inorganic and Cristal Inorganic sued National Union and ACE for coverage of business interruption losses following the Varanus Island natural gas explosion.
Explosion on June 3, 2008 at Apache-operated Varanus Island halted ~30% of WA gas supplies, directly interrupting Millennium's Bunbury Operations.
Millennium purchased gas via Alinta Sales, Pty Ltd. and had no direct contract with Apache; Alinta bought gas from Apache and others for resale.
Endorsement 8 of the Master Policies provides contingent business interruption coverage for contributing properties not operated by the insured, with a Schedule of Locations and a direct supplier limitation.
Disputed issues include whether Apache's Varanus Island facility was a direct contributing property and whether Endorsement 8 covers Millennium's loss through the account-of provision.
Court held Millennium is entitled to CBI coverage under Endorsement 8 and addressed choice-of-law and good-faith-denial defenses; some sealing decisions were resolved.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Apache a direct contributing property to Millennium?	Millennium asserts Apache's facility supplied directly, via physics of gas flow, making it a direct contributing property.	Insurers contend only direct suppliers under contract with insured qualify; Alinta is the direct supplier and Apache is not.	Apache is a direct contributing property; ambiguity resolved in Millennium's favor.
Does Endorsement 8 cover the loss through the 'for the account of' clause?	Coverage extends to the account of the insured even if the contributing property is not a direct supplier.	The clause requires a direct contributing property delivering to others for the insured's account; interpretation favors insurers.	Ambiguity exists; contra proferentem applies in Millennium's favor.
What law governs the contract interpretation for these Master Policies?	New Jersey law should apply due to where policies were countersigned/delivered.	New York law could apply given countersignature locations; law differences are minor.	Either New York or New Jersey law yields the same result; Maryland choice-of-law rules do not alter the outcome.
Did the insurers deny coverage in bad faith under CJ § 3-1701?	Maryland bad-faith standards apply and support a finding of bad faith.	Under NY or NJ law, insurers did not act in bad faith; denial was reasonable.	Summary judgment for defendants on bad-faith claim; no evidence of bad-faith denial.

Archer-Daniels-Midland Co. v. Phoenix Assurance Co., 936 F. Supp. 534 (S.D. Ill. 1996) (CBI coverage applying to any supplier of goods or services)
Pentair, Inc. v. Am. Guar. & Liab. Ins. Co., 400 F.3d 613 (8th Cir. 2005) (CBI coverage interpretation; direct vs indirect suppliers)
CII Carbon, L.L.C. v. Nat’l Union Fire Ins. Co. of La., Inc., 918 So.2d 1060 (La.Ct.App. 2005) (ambiguity in CBI coverage and direct contributing property context)