Johnson Controls, Inc. v. Employers Insurance of Wausau

Plaintiff-Appellant- Controls, Inc., Johnson Petitioner, a mutual com- Employers Wausau, Insurance (f/n/a pany Employers Liability Mutual Insurance Wisconsin), Company FM Affiliated Insurance Company, Company, AIU Insurance Allstate In- (as Company surance successor to Northbrook Surplus Company), Excess Insurance Ameri- Employers' Company, can Insurance American Company, Home Assurance American Motorists Company, Insurance Central National Insurance Company Employers Casualty Omaha, Mutual

Company, Employers Corporation, Reinsurance Company, Federal Insurance First State Insur- Company, ance Granite State Insurance Com- pany, Highlands Company, Insurance Landmark (certain Company, Insurance London Market un- Lloyd's derwriters at London and London Market Companies), Insurance National Union Fire In- Company Pittsburgh, surance PA, Northbrook (as Surplus Company pre- Excess and Insurance Company), decessor to Allstate Insurance Puritan (f/n/a Company Insurance Manhattan Fire and Company), Marine Insurance Stonewall Insur- Company, ance Transamerica Premier Insurance Company, Indemnity Company, Travelers United Company, National Insurance Zurich Insurance Company, and Company, Insurance International Company, Fire Insurance Westchester Defendants-Respondents, Ameri- Company, Insurance Underwriters Allianz Company, American Insurance can Centennial In- Company, International Associated Insurance Company, Insurance Union California surance Company, Company, Insurance Continental Company, In- Harbor Insurance Fund Fireman's Company, Cor- Reinsurance North Star surance Company, Republic poration, Insurance Defendants. Court

Supreme 8, 2002. Decided argument October Oral No. 01-1193. 11, 2003. July 2003 WI 257.)

(Also in 665 N.W.2d reported plaintiff-appellant-petitioner For there were briefs Flynn, Jeffrey Matthew J. Davis, O. Rachel A. Schneider, Brady Bruett, Keith Quarles A. LLP, & Kennedy, Milwaukee, and John P. Counsel, General argument Controls, Inc., Johnson by Milwaukee, and oral Flynn. Matthew J. defendant-respondent, Indemnity

For Travelers Company, by Barry Ostrager, there was a.brief R. David Youngwood, Woll, Simpson W. Jonathan K. Th- Bartlett, acher & York, New New York and Janice A. Kravit, Rhodes and Gass, Leitner, S.C., Hovel & Mil- argument by waukee, and oral David W.Woll. defendant-respondent, Employers For Insurance of Wausau, there Dotseth, was brief Keith A. Scott J. Ryskoski, Boley, King, Patrick J. LLP, Larson St. Timothy Muldowney, Paul, Minnesota; and J. Todd G. Godfrey Smith, Kahn, and LaFollette & Madison, and Tierney Michael J. Cohen and Meissner Fisher & argument by Nichols, S.C., Milwaukee, and oral Scott J. Ryskoski. defendant-respondent, Premier Transamerica

For by George Company, N. there was a brief Insurance Gregory Law Kotsonis, A. Kotsonis and Offices of George III, Kotsonis, Milwaukee, and Edwin J. Hull Chicago, Hull, Illinois. P. Cutler and Cutler & David by Nystrom filed Eric J. An amicus curiae brief was Minneapolis, Lindquist Vennum, PLLP, Minne- & and Eugene Passannante, Anderson, G. sota; R. William Olick, PC., New and Anderson Kill & Gail Eckstein Amy Valley, Bach, California, Mill York, York; and New Policyholders. on behalf United by Englund, curiae was filed Eric An amicus brief Insurance Alliance. Madison, on of the Wisconsin behalf Vogt by Heidi L. curiae brief was filed An amicus Milwaukee, Franke, S.C., and Laura A. & and Cook Wiley Yang, Foggan, and John C. Thomas S. Garrett Washington, Fielding LLP, D.C., of the on behalf Rein & Litigation Complex Association. Insurance Claims filed William J. curiae brief was An amicus Amy Dodge, Mulligan, B. Tutwiler and Michael A. S.C., Milwaukee, D. Kuelthau, John Davis & Chicago, Shugrue, Horton, and Zevnik Daniel J. Struck Inc., America, Illinois, of Kraft Foods North on behalf Company. and Kohler filed Robert H. curiae brief was

An amicus Finerty Friebert, & St. Friebert, Shannon A. Allen Stephen Plumer, John, S.C., T. Milwaukee, and Mark J. LLP, Raptis Friedman, Berlin and Swidler Shereff Washington, of the Wisconsin Utilities D.C., on behalf Association. Congress PROSSER, In 1980 T. J. 1. DAVID Response,

adopted Comprehensive Environmental (CERCLA), popularly Compensation, Liability Act cleanup promote "Superfund," haz- known as empowered govern- ardous waste. The Act the federal through Agency ment, the Environmental Protection (EPA), identify pursue hazardous waste sites and part process, remedial activities. As of the remedial government up properties was authorized to clean compensation responsible parties seek from or to re- quire polluters responsible parties perform and other cleanup §§ themselves. 42 U.S.C. 9601-9675 (2000).1 range proce-

¶ 2. CERCLA outlines a of remedial beginning requests dures, with to furnish information ending stringent or documents, and with enforcement impose noncompliance actions to fines for with orders government's expenditures. costs recover the own §§ responsible parties, 42 9606, U.S.C. For 9607.2 there liability. is strict years ago,

¶ 3. Nine this court considered its first dealing case with the insurance issues raised CER- City Edgerton Casualty CLA. In v. General Co. of of (1994), Wisconsin, 750, 184 Wis. 2d 517 N.W.2d463 cert. (1995), denied, 514 U.S. 1017 we were asked to inter- subsequent All references to the United Code States are to the 2000 volumes unless otherwise indicated.

2 Following implementation CERCLA, legisla state legislation tures enacted similar apply would to hazardous program waste identified under the federal as as well other substances that other states saw need to See City control. Wis., Edgerton v. n.2, Gen. Cas. Co. 2dWis. (1994) N.W.2d 463 (citing Comment, Howell Burkhalter, A. Liability Cleanup CERCLA Costs—Are Insurers the Victims Activism?, Judicial 26 Wake L. Forest Rev. 222 n.8 (1991)). purposes

For of simplicity, some references to CERCLA in opinion this are intended to include legislative similar state enactments. Comprehensive

pret key General terms in the standard (CGL) Liability policy in relation to CERCLA environ- damage decided that claims.3 A divided court mental by the EPA or the Wisconsin of letters the issuance (DNR), Department which either of Resources Natural participate requested in the an insured to or directed property, cleanup did of contaminated environmental trigger the insurer's a "suit" sufficient not constitute cleanup duty at We held that and to defend. Id. 771. also not constitute costs under CERCLA did remediation may legally obligated to become "sums that the insured provisions damages" pay within the indemnification as policies. at CGL Id. 782. by Edgerton Today problems the the created 4. they and so acute that decision have become so obvious ignored. convinced that we did The court is cannot be correctly analyze "damages" in stan- the term the not cleanup policy in relation to environmental dard CGL heavily previ- on a CERCLA. relied too costs under We involving very different facts of this court ous decision interpretation an and We also created unworkable laws. part: the case reads in Edgerton at issue in provision The pay the company on of the insured all sums which behalf will damages legally obligated pay because as insured shall become damage property B. occurrence, the applies, an and this insurance caused which any duty against right suit company the to defend shall have property . seeking damages on account such.. the insured groundless, any allegations damage, of the suit are even if of the fraudulent, may investigation false, and settle- make such expedient.... any or suit it deems ment of claim as 2d at

Edgerton, Wis. duty specialized of the insurer's to defend in the context process restoring of CERCLAletters and orders. The consistency begin by and coherence to law must overruling decision. restoring 5. We hold that an insured's costs of remediating damaged property, whether costs party

are based on remediation efforts a third government) (including directly by or are incurred damages applicable insured, are covered under CGL policies, provided policy that other exclusions do not apply. receipt potentially We also conclude that of a (PRP) responsible party letter4 from the EPA or an equivalent agency, state context, CERCLA marks beginning legal pro- the ceedings of adversarial administrative liability impose upon

that seek to an insured. legal significantly A PRP letter affects of interests the expect Therefore, insured. a reasonable insured would trigger duty this letter to its CGL insurer's to defend. 4 (PRP letter) A potentially responsible party letter is a letter issued the notifying EPA recipient that EPA a considers it to he potentially responsible party for contamina 9622(e). at a given § tion site. 42 CERCLA, U.S.C. Under (PRPs)

potentially responsible parties expected are to conduct cleanup pay cleanup performed by for the See others. 'l Prof Ins., (Ohio 423, Rental v. 599 N.E.2d 430-31 Ct. App. Shelby. 1991). The site, EPA identifies negotiates the PRPs at each with cleanup, PRPs do the and recovers from PRPs the cleanup spent by 9606, costs §§ the EPA. 42 U.S.C.

72 ¶ 6. policy coverage a This case involves CGL I plaintiff- dispute Inc.,5 Controls, between Johnson general liability insured, and more than 30 its insurers). (the long case a has insurance carriers history. began years before this court It almost three Insur- District Shorewood Wausau decided School (1992), it Cos., ance N.W.2d since a of conten- has been buffeted ever succession appellate tious, inconsistent decisions. brought

¶ 7. 1989 Johnson Controls November against County in the Circuit Court its suit Milwaukee declaratory liability seeking judgment insurers relating the environmental for various costs cleanup property These sites are located sites. Controls different where Johnson states and/or liability Most under CERCLA.6 Union faced Globe smelting plants to which Johnson the sites are lead manufacturer of is Milwaukee-based Johnson Controls control, manage energy, use of and services that products comfort, in commercial property life and protect Union, Inc. buildings. acquired Globe In 1978 Johnson Controls (Globe batteries, and Union), a manufacturer of automotive Controls, eventually Inc. For merged as Johnson companies two opinion, to "Johnson Controls" also of this references purposes Union, unless otherwise indicated. include Globe 6 CERCLA, Response, Comprehensive Environmental 96-510, Liability Act, Pub. 94 Stat. Compensation and L. No. (1980), empowers the branch of the federal executive 2767 cleanup and the of hazard identify administer government 9604(a)(1). Response may § actions ous waste sites. U.S.C. substances, along cleanup spilled and include both removal 9601(23)-(25). § CERCLA 42 U.S.C. with other remedial actions. expeditious payment a source of Superfund as established actions, ultimately liability for re although response for responsible parties, specified classes of placed is on sponse costs spent Controls Globe Union delivered lead acid and/or plant scrap recycling. and for batteries Some are con- taminated landfills. Three the 21 sites were owned operated by and sites, Johnson Controls.7 2 of At the 21 issues became moot because Johnson ultimately liability. Controls incurred no costs seeking ¶ 8. 8 sites, For Johnson Controls cov- erage cleanup complying for costs that it in incurred pre-suit agency, with a demand from a federal state agency, non-government third-party or a to remediate past which present operators include: owners and of the sites; generators persons waste or other who arranged for disposal, treatment or transport substances; hazardous transporters of 9611(a)(1), §§ hazardous substances. 42 U.S.C. 9607(a). may Responsible parties be required perform cleanup injunction, under mandate of a federal or the EPA perform will the cleanup responsible itself then parties sue for it 9606(a), §§ reimbursement costs incurred. 42 U.S.C. 9607(a)(A)-(B).

Congress amended CERCLA 1986 in the Superfund (SARA), Amendments and Reauthorization Act Pub. L. No. (1986). 99-499, Stat. This amendment served strengthen original note, legislation. Of SARA created statutory right of for responsible parties, allowing contribution them to seek reimbursement of response costs from other parties responsible contaminating the site. See 42 U.S.C. 9613(f)(1). § specified,

Unless otherwise references to CERCLA this opinion refer to the statute as amended and codified at 42 U.S.C. (2000). §§ 9601-9675

7TCI-Atlanta, JCI-Owosso, and JCI-Goshen. include the 3 CERCLA.8These in accord with the sites Controls owned. sites that Johnson remaining sites, 11 Johnson Controls 9. For the part prior suit of the or for either sued settled was by party. cleanup performed In some of another costs party seeking reimbursement for cases, the these government agency. cleanup others, In the one or was a sought private parties a contribution from more cleanup. Johnson contamination Controls for Johnson cases, 11 its first in 6 of claims that these Controls any problem was a lawsuit environmental awareness money government agency pay for demand from or already per- cleanup had been for activities that costs parties.9 other formed every in- 10. Johnson Controls avers promptly applicable or its CGL insurer it notified

stance being liability claims made. CERCLA insurers every defend Johnson refused to instance insurers flowing any cleanup indemnify it for costs or to Controls CERCLA-type The insurers claims. from CERCLA Distributors, & Tube These sites National Steel are: Refining JCI-Atlanta, Smelting & National Disposal, Lakeland JCI-Owosso, Refinery (NL-Atlanta), Maxey Flats, USS Lead Inc., and JCI-Goshen. Controls, Benning- sites, according to are: These Johnson Pedricktown, Ion, Auto City, Landfill, NL-Granite NL

ton Inc., & and Delaware Sand Scrap Company, Iron & Metal Union Controls, sites, according to Johnson The latter Gravel. already cleanup costs government past involved suits government having incurred, any directive previous without sites, remaining 5 Johnson Controls At issued to JCI. been party prior some directive private that a suit followed claims reme- government that Johnson Controls requesting from Bay Drums, Environmen Keefe These sites are: diate the site. (Gould), and Inc., Disposal, Services, Hunt's NL-Portland tal Tonolli.

justified grounds policies their refusal on that the CGL imposed did not cover costs under CERCLA. policies ¶ 11. The Johnson Controls CGL were years issued at various times between the of 1954 and they primary, 1985, and are either excess, or umbrella comprehensive general liability policies. policies These provide that: company pay will behalf on of insured all sums

which the insured become legally obligated shall pay to damages bodily as personal] injury [or because of damage property the policy applies, which caused occurrence, an company have right shall duty any against defend suit the insured seeking damages on bodily injury account of such or property damage .10 ... complaint 12. Johnson Controls' asserted that language required

this its insurers reimburse complying Johnson Controls for its costs in with its sought declaratory sites, liabilities at the 21 and it a judgment to that effect. complexity

¶ 13. The of the case led to an ex period discovery. May tended of 1992, On 20, before go case could to trial, Shorewood, this court decided helped vote, 4-3 in a manner that would have Johnson Controls. See Sch. Dist. Shorewood v. Wau of (1992) Cos., sau Ins. 390, 168 Wis. 2d 484 N.W.2d314 I). {Shorewood Three months later, after motion for opin reconsideration, the court withdrew its mandated majority opinion ion and a new 6-1 issued an with a contrary analysis opposite and an result. Sch. Dist. of

10Although there is some minor deviation from lan this guage issue, of policies some at purposes appeal this language we view the substantively in the contested policies as similar language presented. to the

76 Cos., 347, 488 Ins. Wis. 2d Shorewood v. Wausau (1992) (Shorewood). N.W.2d82 appeals the court of November 1992 City Edgerton v. unanimous decision

issued a Casualty Wisconsin, 2d Co. Wis. General of 1992). (Ct. App. distinguished This decision N.W.2d768 helpful by implication to case the Shorewood and was later, months as the Controls. Johnson Nineteen present awaiting trial,-this was court reversed case Edgerton City Edgerton opinion. own issued its Wis., 517 N.W.2d Gen. Cas. Co. of. (1994).11 site, Edgerton involved of a landfill the owner Gravel, (ES&G), City Edgerton, the Sand Inc. and the and of, city leased use as the landfill from latter which the site for Wis., Cas. City v. Gen. Co. to 1984. (1994). 758-59, By had 1978 the DNR N.W.2d463 con suspected groundwater it informed ES&G letter that the site, that at the the DNR recommended tamination and capped. organic In landfill closed and Id. at 759. 1984 volatile be groundwater underneath compounds were detected in the closed landfill in 1984 vicinity in the of the site. Id. ES&G the and, year, capped. Though the during the next the site was Id. remained, closed, which groundwater contamination site was on placement landfill compelled the DNR to recommend the for Id. In priority cleanup. of contaminated sites EPA's list City by certified EPA ES&G June 1989 the notified both and the circum investigating letter EPA was site that the surrounding the of hazardous substances presence stances requested The EPA then the landfill. Id. at 750-60. around request for information respond that the DNR's the insureds landfill at the disposal of hazardous substances regarding the 1984. Id. at from 1950 to 760. received the letters July 1989 the insureds forwarded In carrier, General primary EPA to their insurance

from the requested cover- defense Casualty. separately Id. Each insured Casualty specifically requesting General age, ES&G with Edgerton, ¶ we concluded that standard policies provide CGL do not indemnification up environmentally for an insured who an cleans con- regardless taminated site, of whether or not the insured property, pur- owns the when the remediation is done government request suant to a directive or under holding CERCLA. Id. at This was based on a 78.2-86. response conclusion that environmental costs under equitable legal CERCLA12constitute relief, not dam- ages, policy, under the and, thus, the insurer had no duty indemnify expenditures. its insured for these Id. majority potentially at 782. The held that neither a also (PRP) responsible party comparable letter nor a notifi- agency cation letter from a state constituted a "suit" triggering duty the insurers' to defend. Id. at 771, 775. primary The court concluded that attribute of a parties suit—that are involved in "actual court proceedings" present not where an insured —was any pay may it costs that regarding have incurred the site. Id. In February 1990 the DNR sent certified letters to both in- sureds, giving days each 30 to propose plan for remediation of the site. Id. The DNR also indicated that respond failure to listing would result in the of the site on CERCLA's National Priorities List or the taking of immediate state action. Id. at In response, 760-62. ES&G notified its excess insurer of its receipt of EPA request information letter and the DNR letter, enforcement requesting coverage of defense costs as well any liability as resulting EPA from or DNR claims. Id. at 762. The insurers denied liability coverage and provide refused to City ES&G, defense for both the prompting the insureds to declaratory seek a judgment defining the obligations of the companies insurance policies. under their Id. 12 CERCLA defines "response costs" to include the costs of removing hazardous substances from the environment and the 9601(25). costs of other remedial work. See 42 § U.S.C. liability potential merely from receives notification at Id. 775. EPA or the DNR. the Edgerton Following decision, the insur- summary arguing judgment, for case moved ers in this liability Edgerton insurance that no established up any provided coverage cleans for insured who government pursuant property di- to a contaminated request state laws. CERCLA or similar under rective or February for Milwaukee Circuit Court 24, 1995, the On summary Judge, granted County, George Burns, Jr., A. as judgment was dismissed and the case to the insurers appealed the various then Controls all sites. Johnson judgments and orders.13 appeal heard, this court was

¶ 17. Before play legal bearing at issues on another case decided appeal. In Johnson Controls and the both Casualty Hills, Co. Wisconsin General (1997), insured, a service 167, 561 N.W.2d 718 sought liability insurance owner, station recycler brought against oil a waste him claim seeking response recovery asso- costs of environmental recycling Id. at site. a contaminated ciated with recycling placed on the site EPA had 171-172. had States and the United List14 Priorities National recycler defendants, against brought and other suit gov- against Id. No owner. the service station not but filed a insurers time, Controls' one of Johnson At this its dismissal of circuit court's to address cross-appeal appeals The court Controls. against Johnson counterclaim Controls, Inc. v. Johnson this decision. ultimately reversed Wausau, 95-2591, unpub & Ins. Nos. 95-1796 Employers 1998). (Wis. App. Oct. 15-16 Ct. slip op. at lished sites polluted List is a list of Priorities The National § 9605. 42 U.S.C. EPA, by CERCLA. required as compiled by the up to be cleaned eligible makes it the list placement on A site's agency eminent had ever notified the insured service potential liability station owner of under CERCLA or requested develop plan that he a remediation or incur response remediation and Id. costs. at 180. This court long request that, held so as there was no or directive government, the insured was covered under his policy compensatory, monetary sought by CGL for relief parties they third for losses incurred due to the alleged past property. insured's contamination of the Id. at 185. April 18. After Hills was decided in 1997, the appeals appeal.

court of addressed Johnson Controls' unpublished an decision dated 13, October 1998, the appeals attempted apply holdings court of assessing response Hills whether quali remediation costs incurred Johnson Controls "damages" poli fied as under Johnson Controls' CGL Employers Controls, cies. Johnson Inc. v. Ins. Wau unpublished sau, slip op. Nos. 95-1796 & 95-2591, (Wis. 1998) (Johnson I). App. 13, Ct. Oct. Controls developed categories court four to determine whether the various sites would or would not be covered. category Edgerton-type 19. The first consists of sites. These involve situations where the insured is responsible cleaning up the contamination at a site pursuant government ato CERCLA, directive under counterpart, performs state and the insured cleanup. Citing Edgerton Corp. and Amcast Industrial FM Co., Insurance Wis. 2d Affiliated (Ct. App. 1998), N.W.2d218 the court said that the costs type "damages" this of remediation are not and, Blasland, through Lee, means. See CERCLA-related Bouck & Miami, City Inc. v. (11th 2002) 283 F.3d 1289 n.1 Cir. of N. 9605). (citing § 42 U.S.C. required therefore, no insurance in connec- the remediation of tion with these sites. category

¶ 20. The second consists of situations governed by responsible An is Hills. insured for at least part of the contamination of a site that it does not own. by government any The insured is not contacted the in regarding cleanup property. manner a Instead, of the government agency responsible has directed others for they, the contamination to remediate the in site against cleanup turn, file suit the insured to recover the costs attributable the insured. Pursuant to the Hills holding, coverage given CGL is to an insured for reme- diation at these Id. sites. appeals

¶ 21. The court of then devised two new categories logical that it said were the extensions of the I, and Hills decisions. Johnson Control Nos. slip op. unpublished 95-2591, 95-1796 & at 7-10. category ¶ 22. The third consists of situations in responsible partially which the insured is at for least contaminating a it site that does not own. It is then by governmental entity site, a the directed to remediate category three, but fails to do The in like the so. insured Regent City Manitowoc, in insured Insurance Co. v. (Ct. 1996), App. 450, 463, 205 Wis. 2d N.W.2d by government money sued to recover that the government spent According to remediate the site.15 Manitowoc, City Regent Insurance Co. v. (Ct. 1996), App. 556 N.W.2d 405 held that where government cleanup sues "an insured to recover incurred costs 107(a)(4)(A) impose plan § under ... or to for [CERCLA] rather, remediation, is, damages' that action is not a 'suit for but Id. at 463. 'equitable monetary suit relief.'" Johnson in argued appeals before the court of that our decision Controls Regent. Hills overruled disagreed, noting appeals The court of by Hydrite Regent -Hills vitality post was reaffirmed recovery sought by analysis, appeals' the court of equitable government and, there- remains nature in the situations fore, no insurance is obtained by category encompassed I, Nos. three. Johnson Control unpublished slip op. 11. 95-2591, at & 95-1796 category A consists of situations simi- fourth except category three, that the insured is sued lar to parties who are also other third the site's owner responsible any contamination, of whom cleaned for the govern- up government's direction. the site at against the insured. As not involved the suit ment is appeals categories three, the court of one and with coverage for sites that there is no insurance concluded category. Id. in this catego- appeals

¶ 24. The court of indicated that the rationale of and four are subsumed under ries three government Edgerton, nor the third since neither recovery seeking "legal party in is these cost actions injury by damages" property an for caused insured. non-recovery explained was later as The rationale for follows: by

Rather, property owners forced government up allegedly government to clean contamination seeking Edgerton are what caused Johnson Controls relief," is, monetary that recom- "equitable noted was nation's spent complying with the pense monies environmental-protection money that would laws— complied it had spent by have been Johnson Controls if cleanup directives. government's with the Employers Wausau, Ins. WI Johnson Controls (Johnson App ¶ 30, 9, 319, 2d 640 N.W.2d205 Wis. 784). II), (citing Edgerton, 2d at 184 Wis. Controls Co., Surety Casualty Co. v.Aetna & 220 Wis. Chemical 1998). (Ct. n.5, App. N.W.2d423 Having preceding categories, ¶ articulated appeals entry the court of remanded the matter for the global judgment, instructing aof the circuit court to "(1) subparts reciting: break down its decision into (2) property company involved; the insurance or com- panies policies and the relevant dates of their that (3) property; required by relate to the the result opinion." this Johnson Controls Nos. 95-1796 & unpublished slip op. 95-2591, at 12. County remand, 26. On the Milwaukee Circuit Judge,

Court, Sullivan, Michael E determined that all categories 21 sites at fell one, three, four, issue into meaning that the costs incurred Johnson Controls at "legal damages" these sites were not entitled to insur- coverage policies. ance under its CGL Johnson Controls appealed again. concluding once After that the circuit findings clearly court's of fact erroneous, were not appeals finding court of affirmed the circuit court's no was afforded to Johnson Controls. Johnson II, Controls 2d 319, 26. Johnson Controls we granted. petitioned review, this court for which II continuing ¶ 27. The core this matter is the vitality Edgerton. While Johnson Controls maintains upheld, that, even if the insurers must provide coverage governed by categories in situations three and four of the I schema, Johnson Controls it Edgerton's nonetheless launches an overt assault on holdings. Johnson Controls asks this court to overrule Edgerton misapplication the decision because was a arbitrary law, an Wisconsin it created and unworkable system resolving issues that arise in the context of coverage damage, insurance legal for environmental and the completely rationales for the decision have eroded. uphold Conversely, its this court to beseech the insurers Edgerton, and, precedent, rationale of adhere to the categories doing recognize upon and four three so, that coverage necessarily consonant with denied be must Edgerton. Edgerton determining should whether In analysis. engage First, we levels of in two

survive, we Edgerton were the conclusions of assess whether must If that the law. we determine as a matter of incorrect wrong, fundamentally opinion then we must was controlling legal standing Edgerton's grapple as with if precedent words, even this other Wisconsin. misapplied conclusively that court determines principles law and misconstrued insurance Wisconsin recovery sought cost relief in CERCLA the nature of the these errors actions, must decide whether we still precedent require its recent the court to overrule of stare decisis. deviate from the doctrine

II I under its Controls seeks 29. Johnson duty regard policies. to the insurers' With various CGL [insurer] provide: indemnify, policies "The will to pay all which the insured of the insured sums on behalf obligated pay damages legally as be- become shall ap- damage policy property . . which cause of. plies, As for the insurers' an occurrence." caused provide duty policies insurer defend, the any against duty right to defend suit "shall have damages seeking . . on account such. the insured property language policies damage." have All at issue preceding substantially similar to the identical or either terms. interpretation

¶ 30. The of words or clauses in an question insurance contract is a of law that we review de Reclamation, Ltd., novo. See Just v. Land 155 Wis. (1990). explained 737, 744, 2d 456 N.W.2d570 As we by Hills, the method which Wisconsin courts determine requires coverage

whether an insurance contract of a particular claim is familiar: general, interpretation of an insurance con

tract is controlled principles of contract construc See, Co., tion. e.g., Kuhn v. Allstate Ins. 193 Wis. 2d (1995); 532 N.W.2d 124 Maas Ziegler], [v. [(1992)]. [70], 79, 492 N.W.2d 621 The primary objective in interpreting a contract is to ascertain and carry See, out Maas, the intentions of the parties. e.g., 79; 172 Wis. 2d at Kremers-Urban Co. v. American Co., Employers 722, 735, Ins. 2dWis. 351 N.W.2d (1984). primary importance "Of is that the lan guage of an policy insurance interpreted should be mean what person a reasonable position of the insured would have understood the words to mean." accord, Sprangers, 536; Kuhn, 182 Wis. 2d at e.g., 60; Co., 2d at Wis. Kremers-Urban 119 Wis. 2d at 735. principles guide Hills, 209 Wis. 2d at 175. These our interpretation policy language of the at issue in this case. Response Damages?

A. Are CERCLA Costs response ¶ 31. We first address whether CERCLA legally costs are which "sums the insured shall become obligated pay damages." question, as To answer this comprehend we must the nature of environmental insured response a reasonable understood costs as liability.16 with CERCLA faced gov- that, when the contend The insurers authority cleanup of under the costs seeks ernment (or government regulation), the similar state CERCLA (a) through a seeking of restitution in the form relief (b) injunction through cost-recovery admin- action,17or argue that both Because the insurers order.18 istrative "legal "equitable," dam- is, not that relief are forms ages," is excluded.

16 case, in this Hills, analysis in the focus of our stated As we and not on policies of the insurance interpretation is on Hills, Wisconsin v. Casualty Co. law. General environmental (1997). parties 167, 175, 561 N.W.2d 209 Wis. 2d forms, varying how extensively argued, in amici curiae have impact on the policy the CGL will interpretations of competing we are pollution. While and effective remediation efficient probative of issues, discussions are not these to these sensitive policies. Controls' under Johnson coverage obtains whether 9607(a)(4)(A). § 42 U.S.C. 107(a)(4) CERCLA, 42 U.S.C. codified as Section recovery action of right of a cost 9607(a)(4), § establishes at a for contamination responsible against parties other parties responsible all provides It that under CERCLA. remediated site parties

shall be liable for— (A) by the incurred or remedial action all costs of removal tribe not State or an Indian Government or a United States plan; contingency with the national inconsistent (B) by any necessary response any incurred costs of other plan; contingency person the national consistent with other (C) of, to, natural injury or loss of damages destruction for injury, assessing resources, including costs of such the reasonable destruction, resulting release!.] such a from or loss 9607(a)(4). alternative, can government In the § 42 U.S.C. circumstances, require order to a court seek, under certain posi- opposite ¶ 33. Johnson Controls takes the response "damages" tion. It contends that costs are from perspective ordinary of an insured the law because imposes property costs on the insured to remediate previously damaged. response the insured These costs should thus be covered. Edg

¶ 34. When this issue was first addressed majority erton, a of the court concluded that CERCLA response "damages" costs do not constitute under stan policies. Edgerton, dard CGL 2dWis. at 782. The Edgerton majority primarily looked to School District of guidance interpret Shorewood, 170 Wis. 2d ing damages" language the "as in the insureds' CGL policies. sought

¶ Shorewood, 35. two school districts liability policies insurance under their CGL defending declaratory for in their costs an action for injunctive complying relief and their in costs with responsible parties perform through to remedial actions authority Unilateral Administrative Order. granted This CERCLA, under Section 106 of provides part: which any In addition to other action taken a State local or government, may when the President determines that there he an endangerment public imminent and substantial to the health or welfare or the environment because of an actual or threatened facility, may require of a release hazardous substance from a he the Attorney may of General the United States to secure such relief as necessary threat, danger be to abate such or and the district court of the United States in the district in which the threat shall occurs jurisdiction grant public have such relief as the interest the equities may also, require. may of case The President after State, notice to the affected take other action under this section including, to, issuing may but not limited such orders as be necessary protect public health and welfare and the environ- ment. 9606(a). § 42 U.S.C. alleged subsequent to correct settlement

the terms of a illegal segregation practices and racial discrimination of that: The court noted Id. at 356-62.19 in education. underly- in the goal plaintiffs apparent The area desegregation of the Milwaukee ing action was sought only complaint amended system. The school "to purpose whose was declaratory injunctive relief in the remaining vestiges segregation eliminate metro- the Milwaukee school districts and schools complaint did not seek to area." The amended politan past discrimina- compensate victims presently Therefore,, sought in the un- "damages" no were tion. derlying action.

Id. at 371. recognized court 36. Shorewood indemnify largely being sought

types were of costs public expenditures. To district for future the school why explain fall our tradi- did not within such costs "damages," concept concluded that the court tional "damages," in CGL insurance when used the term "legal damáges" policies, unambiguously means —that injuries"— wrongs past "legal compensation is, generally pecuniary Id. at in nature. are which 'damages' does not "The term complying Then the court added: encompass injunctive with an the cost of Id. decree." Citing critical. sentence was 37. This last Dictionary, Hand- Dan Dobbs' Law Professor

Black's (1973), Milk Pure Prod- Law Remedies book on the of Organization Cooperative National Farmers ucts 19 Edgerton, at in policies in issue in this case and As Shorewood duty of indemnification qualified the insurer's "legally obligated pay as only sums the insured is those which Cos., Ins. v. Wausau damages." Sch. Dist. Shorewood 170 Wis. of (1992). n.1, 82 2d 358 488 N.W.2d 88 (Pure (1979), II), 691 280 N.W.2d Milk Wis. (Milliken II), Bradley 433 U.S. 267 Milliken v. and (1977), court hammered the distinction between injunctive past wrongs compensation relief that future. looks to the parties conduct of the injunction

An looks to the future Damages, the other preventive in nature. on and is nature, hand, preventive. not are remedial only plaintiff if the can remedy injunction is available injurious continuing anticipated act establish that a or damages. compensable adequately is not (citing II, Shorewood, Milk 2d at 370 Pure 800). 2d at Wis. retrospect,

¶ the rationale for the Shore- 38. broadly reject stated, and we its was too wood decision damages. overly restrictive definition Succeeding that courts should have noticed key term 'dam- the Shorewood court's sentence—"The complying encompass ages' with an the cost does not language injunctive decree"—was inconsistent with quoted opinion. in the of authorities Dobbs, Hand instance, cited 40. For Shorewood proposition Remedies, that for the on the Law book major categories: judicial dam remedies fall into four restitutionary age coercive rem remedies, remedies, (such injunctions are backed the court's as edies contempt power), declaratory remedies. Shore § (citing supra, 1.1 at wood, Dobbs, 170 Wis. 2d at 368 (1973)). the law: "This The court then summarized purpose is based on the nature classification scheme on the ... A based of the relief awarded. classification legal, equitable action, as either form of added). (emphasis The substance at irrelevant." Id. purpose remedy of 1973 treatise is that if the of a Dobbs' compensate party purpose loss, is to a for some the of remedy the the of the action. overshadows form

¶ 41. note that We Justice Abrahamson cited page treatise and the exact in the same Dobbs same "Although original opinion, writing Shorewood that 'damages' generally purpose main at law is viewed as compensatory, damages remedy wholly is not com- injunctive pensatory. mandatory time, At the same may 'compensatory' relief also in nature." be Shorewood (citing I, Dobbs, 2d at Handbook on the (1973)). § 1.1, Law at 1 Remedies quoted ¶ 42. Shorewood also from Milk II: Pure injunction designed prevent injury, "[A]n is not compensate past wrongs, injunction may [ ] an merely upon proof issue of a sufficient threat of future irreparable injury." Shorewood, 170 2d at Wis. 802) (quoting (emphasis II,Milk Pure 90 Wis. 2d at added). explained II But Pure Milk also that: injunction preventive looking is a order to the parties. injunction,

future conduct of the To obtain an plaintiff probability must show a sufficient that right future conduct of the defendant will violate a injure plaintiff. remedy and will To invoke the injunction plaintiff must moreover establish that injury irreparable, i.e. not adequately compens- able in damages. (citations omitted) II, Milk

Pure 90 Wis. 2d at 800 added). (emphasis reading sug- A43. careful of these authorities

gests equitable providing compensa- if an action is past wrongs tion for it is "remedial nature" —it —if indiscriminately typical lumped in- with a cannot be purpose serving junction, from it is different because injunction. typical quick Edgerton opinion ¶ too to em- The was 44. dichotomy legal damages and the strict between brace Edgerton equitable in The actions out Shorewood. set heavily damages five-page on of relied court's discussion 'damages' key "The term sentence that Shorewood's complying encompass an the of with does not injunctive cost analysis to it its decree," and constructed faulty Edgerton, principle. 2dWis. conform to that 368). (quoting Shorewood, 170 2d at Wis. at 783 misap- Edgerton made a second mistake. 45. It regarding scope holding plied of the "as Shorewood's damages" policies it did not in because limitation CGL liability appreciate for environmental the nature of liability cleanup or how that under CERCLA costs by The insured. understood a reasonable would be response majority summarily that concluded equitable relief similar CERCLA were costs under Edgerton, Shorewood, settlement the school districts' designed and, such, were not 785,20 2d at as wrongs parties past compensate aggrieved and did for majority policy coverage. Id. The not fall within designed response to deter costs were reasoned that injunctive action, means of an contamination future cleanup providing remediation "while for added). (emphasis sitefs]." Id. affected in the error to follow subtle This conclusion seems it paradox The Shorewood decision. Shorewood action of the not to look to the form correctly instructed courts Shorewood, 170 Wis. requested, nature of the relief but to the all deeming ignored this command itself but it then at in nature. being equitable relief as injunctive legal equitable The distinction between very upon remedies relied in Shorewood has limited applicability to CERCLA. Because CERCLA serves dual purposes provides multiple achieving avenues purposes, operation legal these of the statute and its obligations attempts if will be confused one to fit the liability imposed nature into a strict equitable/legal damages dichotomy. See John A. Coverage Disputes Mathias, et al. Jr., Insurance (1996 2003). § Supp. 9.02[1], at 9-18 & attempts promptly ¶ 47. CERCLA remediate polluted bring original sites to land back to its uncon- imposes However, taminated condition. CERCLA also liability.21 accomplishing costs remediation ef- expressly expected parties forts are responsible to be borne polluted

for the condition of the land.22The only expend money reason Johnson Controls had to complaint, up the sites named in its either to clean properties directly or to reimburse others who had properties, liability remediated the was because its under had established, CERCLA been based on its pollution contribution, form, some to the of the properties. system,

¶ 48. Under this the nature of relief in response CERCLA cost actions is not confined to future 21 Servs., Indus., Inc., Cooper 677, See Aviall Inc. v. 312 F.3d (5th 2002) ("CERCLA's 681 purposes Cir. twin are to promote prompt cleanup and effective of hazardous waste sites and the sharing responsibility among parties of financial whose hazards."). actions created the 22See, e.g., Improvement Corp. Smith Land & v. Celotex (3d 86, 1988); Corp., Watson, 851 F.2d 91-92 Cir. Blake A. Liberal Construction CERCLA Purpose Under the Remedial Far?, Canon: Have the Lower Courts Taken Thing a Good Too (1996). 199, 20 Harv. Envtl. L. Rev. 279

92 injuries; "legal injuries recompense for sus it includes Shorewood, Thus, at 372.23 tained." See Wis. prospective a element to an is both and remedial there liability. pro response Because CERCLA cost insured's damaged repairing property, ceedings seek the costs conforming conduct, one's future than cost of rather part, compensatory. is, at least in the nature relief Boeing Co., 507, Co. Cas. 784 P.2d v. Aetna & Sur. See (Wash. 1990). harm liabil The for which CERCLA injuries ity past wrongs is on to attaches based may property, Shorewood, 2d at be damages flowing consequential from characterized as damage caused the environment. See direct to Mining Mfg. Co., Co. v. Indem. Minn. & Travelers 1990). (Minn. 175, 182 N.W.2d recovery availability un- of cost actions responsible a that 107 of CERCLA shows

der Section compens- liability adequately party's CERCLA is under injunction damages. government to an fact, as able property an alter- contaminated insured remediate damages injury monetary action for native injunctive may property.24 CERCLA, relief be Under Co., Supp. Susquehanna Broad. 727 F. Fed. Ins. Co. v. See 1989) ("To (M.D. damages are not recognize Pa. question specific relief answer the whether equitable does not are, never restoring original to its condition the costs of land theless, damages."); Spangler Const. Co. recoverable in C.D. (N.C. Co., Inc., 557, 388 S.E.2d 568 Eng'g & Indus. Crankshaft 1990) Quality Syndicate, Ins. (citing Port Portland Water 1986)) ("once (9th damage' 1188, 'property Cir. 796 F.2d 1194 remedying it costs with injuring party, third associated occurs liability meaning policy"). 'damages' within the of the are 24 Co., 507, 784 512 Boeing Aetna Cas. & P.2d Co. v. Sur. See (Wash. 1990) Ins. Aviex Co. v. Travelers (quoting United States (Mich. 1983)): Co., App. 336 N.W.2d 843 though legal available even or restitutive remedies are adequate. Superior Court, See AIU Ins. Co. v. 799 P.2d (Cal. 1990). option 1253, 1277 This is one of several distinguish factors that CERCLA remedies from the injunctions traditional described in Shorewood. regulate prospective 50. CERCLA does not con- governments regulate duct the traditional sense that Realty commercial behavior. See New York v. Shore (2d 1985) ("CERCLA Corp., 759 F.2d 1032, 1041 Cir. regulatory standard-setting not a statute such as the Act."). impose Clean Air Rather, it seeks to strict liability corporations damages on and other entities for property past. done in the None of the costs at issue appear in this case to have been incurred Johnson improve ongoing process- Controls to the cleanliness of ing comply government regulations requiring or to with practices conforming business to some standard.25 injunction materially Therefore, an in this context is If the state were to sue in "damages", court to recover traditional including cleaning up the state's costs incurred in the contamina- tion, injury ground water, for the obligation defendant's against pay damages defend the lawsuit and to would be clear. It is merely standpoint plaintiff fortuitous from the of either or defen- dant that plaintiff remedy state has chosen to have problem, choosing contamination rather than to incur the costs of clean-up suing plaintiff itself and then to recover those costs. fact, another statute, federal the Resource Conserva Recovery (RCRA), tion and Act §§ 6901-6992, U.S.C. which preceded years, CERCLA regulates few present-day handling of hazardous wastes and carries its own enforcement Western, Inc., mechanisms. See Meghrig v. KFC 516 U.S. (1996) ("RCRA is a comprehensive environmental statute governs treatment, storage, disposal of solid and hazardous waste. Unlike [CERCLA] RCRA is not principally designed to effectuate the cleanup of toxic waste sites or to compensate those who have attended to the remediation of environmental hazards. RCRA's primary purpose, rather, is to injunction, distinguishable as from traditional such in Shorewood. the one at issue protection

¶ is true of human 51. It that remediating health welfare is a future benefit from and shifting damaged property. However, focus from injury remediating past preventing damages to future change na- from contamination does not the remedial past response completed ture of CERCLA costs actions. points opinion to 42 U.S.C. 52. (A) (C), 9607(a), justify

§ paragraphs and its conclu- damages, asserting response that sion that costs are not response by definition, "are, considered to be costs congressional equitable and intent relief reflect response cleanup or costs under differentiate between 9607(a)(4)(A) injury, damages for 42 sec. U.S.C. destruction, or the of natural resources under loss 9607(a)(4)(C)."Edgerton, 2d at 784. U.S.C. sec. disputed now, other then, This was and is conclusion courts.26 § 9607(a), kinds of In outlines four CERCLA speaks "damages."

liability, However, of which one liability congruent, are that kinds of not while the four they overlap, it mean nor does does not mean do not expect coverage for one that government insured a reasonable would response damage but not to environmental any any Edgerton implies event, for another. precludes government involvement with insured generation of hazardous waste and to ensure the reduce the treatment, storage, disposal that waste which is proper present as to minimize the generated, nonetheless 'so environment.'") (cita- to human health and future threat omitted). tions Co., See, Aviex Co. Travelers Ins. e.g., United States (Mich. 1983). App. N.W.2d coverage, sought damages whether the as (A) (C) 9607(a)(4). § under ¶ acknowledged Shorewood, 54. the court that many the school districts had cited cases "which have cleanup [CER- held that environmental costs under , CLA] 'damages' constitute under the terms of insurance policies." Shorewood, 170 Wis. 2d at 372-73. It went on say country uniformly to that courts around the "donot agree clean-up that costs under CERCLA constitute 'damages' policies." under the terms of insurance Id. at significantly, 373. Then, the court said: The issue of clean-up whether costs constitute "dam- ages" under the terms of an insurance contract has never been addressed a Wisconsin court. Such an important issue should not be decided in a cursory Therefore, this court. we decline adopt to fashion apply analogy posited by the the school districts. added). (emphasis Unfortunately, Edger- Id. at 374 the response though ton court treated CERCLA costs as issue had been Shorewood, decided in when it had not. deficiency 55. There is a third in opinion. quoted extensively Shorewood from Professor authority Dan Dobbs, a "noted on remedies." Shore- wood, quotations 170 Wis. 2d at 368-69. The were taken from the 1973 edition of Dobbs' Handbook on the Law Remedies. In the 1993 revision of treatise, his directly Professor Dobbs addresses the issue of re- sponse damages costs in environmental actions and concludes:

Response costs recoverable [under CERCLA]are analo- gous repair costs and consequential damages that a private landowner-plaintiff might recover in similar situations. . . . Such [of items response costs] are closely analogous to common consequential law dam- very high, spite but in ages. Response . . costs are . they terminology, closely resemble familiar common damages. types of law (1993). 5.2(5), § at 727 Dobbs, B. Law Remedies

Dan clear there then made Professor Dobbs , response between costs no fundamental distinction 9607(a)(4)(A)-(B)) § (sought and natu- 42 U.S.C. under 9607(a)(4)(C)) § damages (sought under as ral resource "damages." their as classification probably terminology of the law would The normal recovery damages and for natural resource treat damages. recovery response costs as Both also happens, loss It how- compensate for incurred. often ever, yield and restitution turn out compensation might case amount. That be the with same dollar response costs. ... [Ijt liability important . characterize a as

. . is only if in amount from restitutionary restitution differs recovery is basis for damages or if there no substantive [CERCLA], there is a substantive damages. as Under recovery costs," are not "response which basis for by the The amount to otherwise characterized statute. not to the character- according be does differ recovered to charac- damages. Attempts ization as restitution or recovery costs either restitution response terize the as attempt helpful. Usually not damages do seem policy an insurance only made to determine whether It is liability for release of hazardous substance. covers policy "damages" the term an insurance doubtful carries with set any it such inchoate distinctions costs covered question response whether are proposed on probably cannot turn policy definitions of distorting the remedial those costs as restitution without concepts involved. (footnote omitted) added). (emphasis

Id. at 729-30 The explanation severely offered Professor Dobbs weak- Edgerton's construing damages" ens for basis the "as language exempting response as CERCLA costs based Edgerton on their remedial nature. The dissent quoted Edgerton, from the 1993 treatise. 184 Wis. 2d at (Abrahamson, dissenting). majority 792-93 J., The opinion never rebutted the dissent's use of Dobbs or acknowledged props that one of the main of the Shore- opinion wood had been removed. problem Edgerton, 57. There ais fourth with as

was revealed in Hills. The court stated in that, Hills "It long has been the law of this state that the cost of repairing restoring damaged property and water to original proper its compensa- condition ais measure of tory damages." Hills, (emphasis 209 Wis. 2d at 181 added). The court cited a number of cases and authori- support proposition.27 ties to opinion this simply body did not address this of law. brings

¶ 58. This Hills, us to In Hills. we con- party that, cluded when a third an sues insured 27 support proposition, this the Hills court cited Jost v. Dairyland Coop., Power 164, 45 Wis. 2d (1969); 172 N.W.2d 647 Co., Anstee v. Monroe Light & Fuel 291, 171 Wis. 177 N.W 26 (1920); Pedelty Co., v. Wisconsin Zinc 134 N.W (1912); Co., Fortier v. Flambeau Plastics 164 Wis. 2d (Ct. 476 N.W.2d App. 1991); Ware, 1 Russell M. The Law of (1988 Damages in §§ Wisconsin 18.4 & 18.22 & Supp. 1996); Wis JI —Civil 1804. See also Wisconsin Public Serv. Corp. v. Co., Heritage Mut. Ins. 821, 830, 200 Wis. 2d 548 N.W.2d 544 (Ct. 1996), App. aff'd, (1997) 160, 209 2dWis. 561 N.W.2d 726 ("Nischke [v. Trust, Farmers & Merchants Bank & 187 Wis. 2d (Ct. 96, 1994)] 522 App. N.W.2d 542 is instructive because it stands for the proposition that when a spends money landowner response government in to a remediate, directive to money the tortfeasor."). can be legal recovered as damages from the 98 party's response un- third costs of the reimbursement liability insur- the insured then seeks der CERCLA and legal seeking coverage coverage, is for the insured ance damages past wrongs. compensate party for the third Id. at 181. attempt to coexist with Hills made a valiant 59. why principles Edgerton. explained It

Shorewood coverage Hills. law on remedies afforded Wisconsin seeking party said the third contribution The court that remedy seeking on the not based from the insured was action or failure failure to take corrective insured's property. prospective of the in the remediation aid [third remedy Arrowhead Rather, "the fundamental compensatory [insured] party] dam- is seeks from Hills allegedly ages past injuries the he on inflicted for added). (emphasis truth, site." Id. at 182 Arrowhead language simply to re- relabeled the contribution this past injuries. damages sponse compensatory as costs Although purported to the rule Hills sustain effectively Edgerton, its intellectual it obliterated the same CGL To find under foundation. policies Edgerton, in concluded issue Hills that were at recovery sought in the nature relief cost that the of the merely equitable Furthermore, not relief.28 action was 28 Wagner is an rule. See equitable rule of contribution 125, (1975); v. Daye, 68 Wis. 2d N.W.2d Hartford Co., 124, 132, 238 Wis. & Indent. Co. v. Worden-Allen Accident (1941). Although right to contribution 297 N.W. granted, nature of statutorily actions now CERCLA may that Moreover, "The fact an action relief remains same. however, equity, does not mean principles he founded Sauk compensation." monetary suing party not seek does Wausau, n.1, County Employers Ins. of (Ct. 1996). App. 2d 439 550 N.W Edgerton, faithfully

Hills, applied long-standing unlike principles of Wisconsin insurance contract law and expectations factored into its calculus the reasonable recognized an policy insured. It that "The CGL was designed protect against liability an insured negligent resulting damage parties." acts to third Id. (quoting at 183-84 Arnold E Anderson, Wisconsin In- (3d § surance Supp. 5.14, Law at 136 ed. 1990 & 1997)).29 Edgerton 61. The basic differences between the (1)

facts Edgerton and the Hills facts are as follows: (2) property, owned the contaminated not; Hills did Edgerton up damaged property, cleaned Hills was (3) government asked cleanup to contribute to costs; Edgerton directly by government, was contacted Hills (4) brought not; was Hills was into a formal lawsuit, principal was not. The distinction between category appeals' Hills of cases and the court of category fourth is that there was contact between the government and the insured before the insured was by party. sued a third arbitrary. 62. This distinction is If we were to

honor response distinction, this for CERCLA liability fortuity cost would turn on the of whether insured had ever been contacted in some manner government regarding the remediation of a site for

29This view has been subsequently applied by the court of appeals. See Sauk County Wausau, v. Employers Ins. (Ct. 433, 443, 1996) ("Hills 550 N.W.2d439 App. held that the purpose of policies CGL indemnify is to damage insureds for they cause to others' property.") (referring to the court of appeals Hills, (Ct. decision in 201 Wis. 2d 548 N.W.2d 100 App. 1996), court). which subsequently was affirmed this party. potentially responsible the insured was a which government mean loss of cov- short, contact would erage.

¶ If conclude that this distinction 63. we were to contrary expecta- indefensibly arbitrary to the is insured, would realize that the tion of a reasonable we category principal the the third distinction between government category files suit for that the fourth is again private party. compensation is a This instead of what a reasonable insured would fortuitous and not expect. determining whether 64. It makes little sense

"damages" policy the the have occurred under whether legal party bringing to reme- action for contribution agency damaged governmental property or is a diate Certainly entity.30 was not this distinction some other anywhere bargained in the for, it manifested CGL nor is against sought policies. an the relief The nature of change damage it not for that caused should insured identity a CERCLA cost of the claimant in on the based recovery action.31 Turall, at First You Don't Succeed... See Todd M.W. If Seeking Hope ?: Insureds Change Facts New Defense for Companies Environmental Insurance from

Indemnification ("To (1999) Costs, 119, 140 an insured L.J. Cleanup Wis. Envtl. CERCLA], no real difference liability there is [facing under being by sued by party and being sued another between government agency."). consequences Edgerton contemplated We doubt Edgerton, majority compared

of this artificial distinction. 107(a)(4)(A) re § with natural recovery under cost actions 107(a)(4)(C), of § the latter which damages claims under source "damages." Edgerton, 184 Wis. acknowledged were the court bring a natural However, only government can at 784-85. subsection. See U.S.C. damages claim under this resource Perhaps example best the arbitrari- ness of these distinctions is illustrated Hills. The underlying Hills, in the defendants action who were declaratory recovery sued the EPA for relief and response precluded coverage costs, would be from un- policy they governed by der a standard CGL if were Edgerton. They appeals' would fall into the court category Meanwhile, three. Hills and the hundreds (PRPs) potentially responsible parties other who were impleaded by original these defendants would receive coverage, despite third-party the fact that com- plaint against sought them contribution for the same response CERCLA costs. We do not believe it rational equitable depend that an insured's should upon government the assiduousness of the in contact- ing potentially responsible party. the insured as a In a recovery cost CERCLA, action under the EPA not is required required to all PRPs, sue nor is it to locate stages all contact PRPs at earlier in the remediation process. City Edg- Stuart, See T. Comment, William Creating a erton: Friendlier Forum Insurance Com- for (1997).32 panies, Marq. L. Rev. 853, 9607(f)(1). Yet, § government-as-a-claimant theory under 106(a)(4)(C) propounded insurers, by the § costs under actions should not be policies. covered under the 32 similarly odd imagined A result can be Edger- under the ton if changed case its facts had as slightly, explained by one commentator: only Heritage The difference in Hills and is that in cases those party, DNR contacted a third who then was forced to a file suit to

bring respectively, in Hills and WPS instead or EPA DNR contacting directly. distinction, Edgerton them Based on this (ignoring owned-property would have been covered its CGL exclusion) directly only ES&G, if the EPA and DNR had contacted against Edgerton, and ES&G had filed a suit because then the by Edgerton "damages" costs incurred would have constituted Edgerton interplay between Hills and The 66. exceedingly have an tenuous situation. We has created creating catego- appeals, in doubt that the court no admirably attempting quite to four, three and was ries Edgerton holdings.33It did so the Hills and reconcile perverse constructing system that did not create a purposefully re- refuse to for insureds incentives government spond directive, allow the remediation to a go pollution unremediated, and wait to he sued undertaking cleanup actions, so that before four-category schema result. But the court's would only arbitrary exposed how the distinctions are. response for costs conclusion is that CERCLA sensible party liable, in form that whatever which a liability becomes party's pursued, "damages" for that are damage property liability prior and must be for indemnified. disconcerting especially result of An

nearly is that line of cases decade-old practice, response seems to be than this distinction

rather costs. technical, may manipu- merely to insureds lead irrelevant they lating will never incur re- their to ensure situations against sponse party files suit will until a third costs hut wait "damages." them to recover (footnotes omitted). Turall, supra, at of the United the Seventh Circuit also note that We cogent analysis basis Appeals provided States Court Century Indem Light & Co. v. Power its decision Wisconsin 1997). (7th that Co., The court concluded nity 130 F.3d 787 Cir. government a response the an insured would incur if costs "damages," not recoverable up would be directive to clean land is thereafter ignores request the the insured then when of in the costs remedi- contribution party another for sued coverage If Id. at 792. ating land, coverage no should follow. that obtain, could be transmuted response costs did the uncovered scenario. category is the four damages. Id. This legal into categorization scheme for determining liability cover- well age now removed from the of the language insurance contract.34 The of source this can problem be traced to Edgerton's failure to comport with the broad of Johnson language Controls' CGL with policy and reasonable expectations of the insured. Hills, 68. As stated CGL polices expected are

to cover liabilities incurred prior because of damage to Hills, 209 Wis. 2d at property. 183-84. We fail to see how the clear policy language signals limitations to the coverage afforded for these liabilities. As was well explained by court of in its decision in appeals Edgerton: property damage

[0]nce is found as a result of environ contamination, cleanup mental costs should be recov erable as sums that insured pay was liable to as the result property damage. argu In this context the ment concerning the separation damages historical and equity is not convincing ought ... the insured to be rely able to on expectation the common sense property damage meaning within the policy includes claim causing which results in pay him to money sums of because his acts or omissions affected adversely third parties. While such claims be might 34As correctly notes, Johnson categories Controls three and imply type four wrongdoing" "intentional standard to the However, insured's entirely actions. such an exception is inap propriate because it not does ask act giving whether the rise to (the contamination) was intentional. See Lover Chartier, (1991) idge 2dWis. 468 N.W.2d 146 (discussing nature of intentional acts exclusion in insurance policy). erroneously This notion good also assumes no there is faith basis liability govern insured to contest under a ment directive fails to consider that CERCLA remediation frequently complex actions are and can involve innumerable permutations of factual situations. [cleanup] seeking "equitable relief the as

characterized for essentially damages injury compensatory are costs for that reason the insured property to common duty [T]he . short answer is to defend. .. has being damages are standpoint of the insured from It is that contractual sought injury property. for highly understanding rather than some artificial meaning damages ought to control. technical which Edgerton City Wis., 172 v. Cas. Co. Wis. Gen. (Ct. 1992) App. (quoting 518, 543, 493 N.W.2d 768 Supp Upjohn Co., 1186, F. v. Aetna Cas. & Sur. 768 Co. 1990)). (W.D. 1199-1200 Mich. determining response By that CERCLA 69. policies, CGL we are recoverable under these

costs are damages" surplus- rendering phrase a mere "as not (citing age. Edgerton, Shorewood, 2d at 784 184 Wis. 369-70). contrary, language of 2d at On policies precludes for costs still these CGL pay comply with insured would in order to that the general government regulations prospective conduct. e.g., Indus., See, Inc. Ins. Co. N. A.Y.McDonald v. (Iowa 1991); & Am., 607, Bausch 625-26 475 N.W.2d Co., 625 A.2d 1033 v. Ins. Lomb Inc. Utica Mut. (Md. 1993); Mining, 175, 180 457 N.W.2d Minnesota Light Century Indem. n.4; & Co. v. see also Wis. Power (7th 1997) ("A claim Co., F.3d Cir. distinguished damages from a demand for be must duty."). legal compliance awith deciding case, the court to hold that CERCLA two federal decisions relied on policies. "damages" response CGL are not under costs (citing Maryland Edgerton, Co. Cas. 2d at 784 Wis. 1987) (4th Armco, Inc., 1348, 1352 Cir. 822 F.2d law), Maryland (applying denied, 484 U.S. cert. (1988), Pharm. & Chem. Ins. v. Northeastern Cont'l (8th 1988) (NEPACCO) (applying

Co., 842 F.2d 977 Cir. law), cert. Missouri denied sub nom. v. Missouri Cont'l (1988)). Cos., Ins. 488 U.S. 821 The Armco and rejected by NEPACCO decisions have since been the highest courts the states whose laws the decisions attempting apply. Indus., were See Farmland Inc. v. (Mo. Republic 1997); Co., Ins. 941 S.W.2d Bausch & Co., Lomb Inc. v. Utica Mut. Ins. 625 A.2d (Md. 1993).35 dispositive, fact This is not but it credibility original Edgerton the erodes of the decision. ¶ Edgerton 71. We conclude that the decision was too-confining, overly incorrect it insofar as relied on the "damages" technical definition of in Shorewood and held response damages that CERCLA costs were not within policy. the terms of the standard CGL Trigger Duty B. Do PRP Letters the Insurer's Defend? Having response determined that CERCLA restoring remediating prop- for

costs contaminated erty "damages" should have been determined to be policies, under the relevant CGL turn we to the other holding Edgerton: receipt potentially that the aof (PRP) responsible party EPA, letter from the or a agency, similar letter from a state does not constitute duty "suit" for an which insurer has a to defend. NEPACCO itself sharply Eighth was a divided Circuit en decision. Cont'l Ins. banc decision that panel reversed an earlier Co., Cos. & (8th Northeastern Pharm. Chem. 811 F.2d 1180 1987). Eighth Cir. subsequently The Circuit has rejected the the second NEPACCO Lindsay decision. See Mfg. rationale Co., Co. v. Accident & Indent. E3d 1270-71 Hartford (8th 1997) law). Cir. (predicting Nebraska problem court stated 73. The following manner: fed- expansive authority granted to state and CERCLA, envi- in order to initiate agencies eral under waste, has had the cleanup of hazardous ronmental litigation so as to deter- producing a flood of effect of cleanup PRP or pay mine will costs—the who definitive, na- .. has been no [T]here PRP's insurer. . resolution of ultimate issue —whether tionwide liability policy comprehensive "CGL"— general —the duty or state demand imposes a to defend a federal Instead, cleanup costs. environmental remediation what definitions of developed competing have courts cleanup is when environmental constitutes "suit" required.

Edgerton, 2d at 766-68.

¶ that: The went on observe 74. court PRP have have concluded that letters courts

Some of a nature within the context CERCLA unique a have held that These courts proceeding. administrative equivalent the "functional receipt the of PRP letters is (a) the maintain a confronta- a letters suit" because (b) they the posture, and create and adversarial tional devastating consequences if volun- spectre of financial result, As a PRP tary cooperation forthcoming. not is long-range cleanup and liability for immediate and legal a defense. costs necessitates remediation Id. at 770. provided answer: its own Then the court 75. a com- a PRP letter nor that neither conclude

We the such as agency a state notification letter parable duty to defend. triggers insurers' DNR the primary [T]he attribute of a that parties "suit" is to an action proceedings, are involved actual court initi- filing complaint. ated the of a [DJefinitions . . . suit or legal process all a involve court action. ambiguity

We find no in the term "suit" it has as been the policies. used in insurance "Suit" court denotes proceedings, not a equivalent." "functional The dissent that a policyholder believes reasonable would view letters advising from federal or state agency an liability insured of contrary, as To the word "suit." easily "suit" unambiguous understood and a rea- policyholder. proof sonable is in decisions hold that a "PRP equivalent letter" is the "functional a suit." Either there is a suit there is not. When there suit, duty is no there is no to defend. 771, 775,

Id. at 781. ¶ 76. The court's definition of "suit"- gives pause. policy us An insurance is a contract be- parties, normally province tween and it is not of the enlarge policy parties court to the terms of a have agreed upon. specific being time, At same term applied put needs to be in context. Comprehensive general liability policies not

only provide protection through to insureds indemnifi- damages cation for for which the insured becomes liable, but also Bolus, defense costs. John N. Con- Liability Overview, tractual Insurance Provisions: An in Comprehensive Handbook on the General Reference Liability Policy: Coverage Provisions, Exclusions, and (Peter 1995). Litigation Other Issues 43 J. Neeson ed. A policy literal definition of the presents in term "suit" the CGL practical understanding some in difficulties obligations parties reconciling the in the presence claim. of a CERCLA imposes policy

¶ duties instance, For the CGL 78. long policy upon re- has the insured. standard provide quired to the as that the notice insurer insured policy practicable. The version of the as soon provides: occurrence,

In the an written notice con- event of identify the insured taining particulars sufficient to re- reasonably information with and also obtainable thereof, time, place to the and circumstances spect injured of the and of available the names and addresses witnesses, the insured to the given shall be or for as agents authorized soon as company any of its practicable. Ray, Comprehensive

Dorothy Dey & Annotated Susan (1985). § Policy Liability 3-1, 41 General provision policy re- ¶ CGL A of the 79. second immediately process quires forward the insured to brought claim is made or suit is the insurer: "If a immediately against insured, shall insured every company demand, notice, sum- to the forward represen- process by him received or his or other mons § Dey, supra, 3-2, at 44. tative." policy language ¶ is reinforced This 80. CGL §§ 631.81, See Wis. Stat. two statutes. Wisconsin (2001-02). "govern the notice These two sections 632.26 policies provisions and set out insurance Wisconsin rights and the insurer." insured duties 285, 629 Pierzina, 30, 245 Wis. 2d 2001 WI Neff v. part They a law for have been of Wisconsin 177. N.W.2d half-century. more than policy imposes provision A in the CGL third cooperate duty of an in the event on insured

occurrence, suit: claim, or

The insured cooperate shall company and, with the upon the company's request, making assist in settle- ments, in the conduct of suits and in enforcing any right of indemnity contribution or against any person or organization may who be liable to the insured injury because of damage respect with to which insurance is afforded policy; under this and the insured shall attend hearings and trials and securing assist in giving evidence and obtaining the attendance of not, witnesses. The except insured shall cost, at his own voluntarily any make payment, any assume obligation any or incur expense other than for first aid to others at the time of accident.

Dey, § supra, 3-3, at 45.36 policy

¶ 82. The CGL then addresses the insurer's duty policy pro- to defend. The relevant clause in the right vides duty that the insurer "shall have the any against seeking defend damages." suit the insured language appears imply equivalency This an between "right" "duty." insurer's and the insurer's "right" partially previously insurer's defined in the imposed noted duties on the insured. "[T]he duty generally to defend is acknowl duty

edged company's to be broader than the insurance pay added). supra, (emphasis . . . ." Bolus, at 43 36In Co., Chemical Applications Inc. v. Home Indemnity (D. Co., Supp. 425 F. 1977), pre-CERCLA Mass case under the Federal Water Pollution Control Act of 33 U.S.C. 1321(f)(2), § the court decided that the insured's costs clean ing up an spill oil in navigable waters was property covered damage. Id. at 778-79. It insured, also concluded that the who governmental under public pressure up cleaned spill without the prior consent, insurer's did not breach "coop eration clause." Dorothy H. Dey, Institute, Defense Research (1984). 3-3, Policy, § Annotated CGL at 45 "Generally, duty duty to defend than the is broader indemnify." Anderson, Arnold R Wisconsin Insurance to 1990) (3d (citing Swain, F.2d 212 Colton v. 527 Law ed. added). (7th 1975)) (emphasis Cir. 296 policy requires in- the CGL and the 84. When upon cooperation insists notice and from surer duty to insured, and the insurer's defend is when duty pay, generally its to is the broader than how duty that no defend entitled to assert it has to insurer an has until an actual suit has been filed? When insurer copy PRP it has letter, a of the insured's received of the claim. Faced become familiar with nature to drastic conse- letter, a PRP which can lead with including higher quences, costs, and which has been likely insurer, the insured is with the reasonable shared reciprocal cooperation expect insurer in the from the to of a form defense. A when the insurer 85. tender of defense occurs against a notice that there is claim insured.

has Realty, Co., Zurich 201 Wis. 2d Towne Inc. v. Ins. (1996). "A occurs 264, 548 N.W.2d64 tender defense put notice of a claim an insurer has been on once against 'discourages approach This the insured. defaulting performance of its . . in the insurer. from duty (quoting Mountain defend.'" Id. at White to (N.H. Transamerica, A.2d Constr. Cable 1993)). duty any defend, "If doubt about the there is insured." Towne favor of the it must be resolved (quoting Realty, Shorewood, 170 Wis. 2d at 269 Wis. 364). might language at the short, at we look policy of a that, conclude the context the CGL a state from EPA or a letter from PRP letter similar position person agency, in the of the a reasonable provide expect defense. tq the insurer insured would Ill ¶ noted, As other courts have at- problem way analyzing tacked the in a different after unique system liability under CERCLA. CERCLA designed only require responsible was not parties pay responding for the costs of to contaminated property encourage parties but also to to undertake litigation these remediation efforts without and in conjunction particular with other PRPs for the site at (e). § 9622(a), practice issue. See U.S.C. The EPA's goal remediating use PRP letters to achieve the bring environmental contamination, rather than to suit immediately upon identifying polluter. Corp. See EDO (D. Supp. Co., v. Newark Ins. Conn. 898 E 952, 960 1995). nothing prohibits course, Of the EPA from remediating properties commencing itself and then recovery naming cost action the insured. In these undoubtedly circumstances, the "suit" condition has been met.

¶ statutory system 87. The existence of a de signed forgo litigation, achieving to while the same relief, minimizes the distinction between administra legal proceedings. tive claims and formal See Aetna Cas. (9th Corp., & Sur. Co. v.Pintlar 1507, 1517 948 F.2d Cir. 1991) ("Coverage depend should not on whether the may proceed EPA choose to with its administrative go directly litigation.").37 remedies or strong policy 88. Because of this in favor of cooperative litigation, pro- remediation over CERCLA significant vides within its enforcement mechanism prompt incentives for and full involvement from all actively engage contacted PRPs. Failure to the EPA strictly We limit our regarding conclusion triggering effect of a PRP letter on a duty CGL insurer's to defend to the CERCLA context.

following letter can lead to adverse conse a PRP such (1) large may quences as fines that include treble (2) inadequate punitive damages; an administrative (3) affecting interests; the insured's use of the record non-compliance against the insured insured's subsequent litiga apportionment cleanup costs in (4) rights against special latter ac tion; forfeiture of response payments; and for contribution of cost tions (5) EPA) (including cleaning parties perhaps the other higher up cost, latter the site at a which will be Minit-Lube, Quaker demanded of the insured. See State Supp. Co., F. Inc. v. Fireman's Fund Ins.

(D. 1994); Pintlar, 1516; at Mich. Utah see also 948 F.2d Plating Co., 519 N.W.2d Millers Mut. Ins. Co. v.Bronson 1994). (Mich. 864, 872 expose an insured to 89. PRP notice letters liability

agency inconsequential to its action that is not case, if Johnson Controls had refused interests. this respond to letters and refused to become these compa- EPA efforts with the or involved remediation agencies, inevitably, cleanup then, rable state EPA, work would have been done remediation by settling responsible parties, agencies, the state any Controls for its of whom could have sued Johnson letters, PRP which are more analo- share of the costs. gous complaint demand than a traditional to a civil the EPA had Controls that letter, alerted Johnson conclusively legally begun legal process deter- appropriate "response activities" that liable mine the parties pollution perform pay at must or for to abate question. Pintlar, 1516; F.2d at See the sites Paper Co., Fid. & 555 N.E.2d Co. v. U.S. Guar. Hazen (Mass. 1990). 576, 581 why many have concluded 90. This is courts adversarial that it constitutes

that a PRP letter is so equivalent triggers functional of a suit and the insurer's duty conclusion, of such a to defend. the absence cooperate perverse a incentive not to with insured has government EPA remedial actions until the or a state agency in court "to force the files a civil action insured's compliance Supp. State, Quaker 868 E with CERCLA." non-compliance purpose Deliberate for the at 1307. obtaining completely a defense from the insurer contrary public policy. to Edgerton, In her dissent Justice Abraha-

mson wrote: a point policy

From the of view of reasonable holder, agency a federal or official letters from state advising liability, increasing penal- an insured of with if an respond, appear ties the insured does not to be adversary's gain by an end attempt legal process. to may proceedings Such administrative force the insured experts lawyers protect hire technical its may interests and terminate in an action in court. Thus to the insured an administrative action is as coercive a legal process as an action filed in a court of law. (Abrahamson, Edgerton, J., 2d at 789 dissent- ing). analysis supports This both reasonable- expectation-of-the-insured theory and a funetional- equivalent-of-a-suit theory. duty

¶ 92. We conclude that insurers have a defend an insured who receives a PRP letter from the agency seeking equivalent EPA an state remediation provided costs, or remediation the insured has policy. above, the claim under CGL As noted response are excluded CERCLA costs not the "as damages" may provi- clause but be excluded other policy. of the sions

IV why ¶ 93. We have articulated several reasons we Edgerton incorrectly applied believe that Wisconsin law remedies, on insurance contracts misconstrued the liability, thereby, erroneously and, nature CERCLA policyholders poli- denied to of standard CGL Nevertheless, cies. it not is sufficient for this court merely explain why disagree we with the contrary duty decision reach a conclusion. Our particularly litigants here, clear because numerous previously coverage disputes Wisconsin have had deter- principles Edgerton. mined under the ruling Edgerton requires set out in Over- compelling justification.

a See Outagamie County Adjustment, State v. Bd. 2001 WI (Crooks, 78, 71, 613, J., Wis. 2d 628 N.W.2d376 concurring). justification ex- We conclude such ists.

A. Stare Decisis

¶ 94. This court follows the doctrine of stare scrupulously abiding respect because of our for decisis City rule of law. See v. Akron Ctr. Akron for (1983). Reprod. Health, Inc., 416, 462 U.S. 419-20 We respect prior understand that decisions is funda- recently rule of mental to the law. We summarized this stating: doctrine, court's adherence to the Fidelity existing law will not precedent ensures that lightly. existing open be abandoned When law "is every case, 'deciding revision cases becomes mere judicial will, arbitrary unpredict- exercise of with Consequently, this court has held that able results.'" "any departure from the doctrine of stare decisis de- special justification." mands Natwick, 37, 257 Wis. 2d 2002 WI

Schultz depart from "A decision to casually. 266.38 court's 653 N.W.2d precedent It must be ex is not to be made carefully fully plained court is to insure that the arbitrary capricious acting manner. A court in an not precedent depart without sufficient not from should justification." Stevens, 410, 442, 2d 511 v. 181 Wis. State (1994) (Abrahamson, concurring). J., 591 N.W.2d following ¶ of The rationales for the doctrine 95. They include: stare decisis are familiar. guide desirability that the law furnish a clear individuals, their plan to enable them to

conduct of against surprise; [2] untoward affairs with assurance adju furthering expeditious fair and importance of eliminating relitigate every dication the need to relevant proposition every case; ^[3] necessity judiciary faith in as a source maintaining public of judgments. and reasoned impersonal Moragne Lines, Inc., 375, Marine 398 U.S. 403 v. States (1970). judicial preferred decisis is the course of "Stare promotes predictable, evenhanded, it action because development legal principles . . and . and consistent integrity perceived of the contributes to the actual and judicial process." Ferron, 481, 504, 2d State v. 219 Wis. (1998) Payne (quoting Tennessee, v. 501 579 N.W.2d654 (1991)). prior 808, 827 The decision to overturn U.S. 38 Stevens, 410, Citing, respectively: v. 181 Wis. 2d State (1994) (Abrahamson, J., 441, concurring), cert. 511 N.W.2d591 denied, (1995); County Outagamie 1102 State v. Bd. 515 U.S. 29, 613, 78, 244 2d 628 N.W.2d376 Adjustment, 2001 WI Wis. Klauser, 484, 513, v. 194 Wis. 2d 534 (quoting Citizens Util. Bd. (1995) (Abrahamson, J., dissenting)); v. Fer 608 State N.W.2d (1998) ron, 481, 504, (quoting 2d 579 N.W.2d 654 219 Wis. (1984)). 203, Rumsey, U.S. Arizona merely case not must be undertaken because the com- position changed. Stevens, of the court has See (Abrahamson, concurring) (citing 2d at 442 J., Welchv. Ins., 172, State Farm Mut. Auto. 182, Wis. (1985) (Steinmetz, dissenting)). N.W.2d680 J., In addi- frequent departure prior tion, and careless from case precedent reliability undermines confidence Lindell, court decisions. See State v. 2001 WI (Abrahamson, ¶ 169, 245 Wis. 2d 629 N.W.2d223 dissenting).39 rejecting any C.J., The reasons for estab- always weighed against lished rule of law must be these factors. particular At time, the same there are cir- jurisdiction's highest

cumstances in which a court pursuing should not be barred from a sound and prudent upholding prior course for the of sake its precedent. Although special justification required is prior e.g., see, decisions, overturn Dickerson v. United (2000); States, 428, 530 U.S. 443 Hilton v. South Caro- Rys. (1991), Comm'n, lina 197, Pub. 502 U.S. 202 justification appropriate can be divined in the circum- Cook, 166, 186, stances. See Cook v. 560 (1997) ("stare contemplates N.W.2d 246 decisis that may under limited a circumstances court overrule out- holdings"). Consequently, dated or erroneous stare de- 39 stated, legal As this court 'are open has "When standards case, every deciding to revision in cases a mere exercise becomes results.'" State judicial will, arbitrary unpredictable of with Creek, City v. Oak 9, n.27, 612, 2000 WI 55 232 Wis. 2d 605 ¶ of (quoting Appeal Concerned Corporators Ports N.W.2d 526 (N.H. 1987) Bank, Savings mouth (Souter, J., 671, 525 A.2d (quoting Thornburgh College v.Am. Obstetricians dissenting) (1986) Gynecologists, & (White, J., 476 U.S. 786-87 dis senting))). to the for adherence mechanical formula

cisis is not a power Payne, at and "the decision, 501 U.S. latest rulings unquestioned, prior repudiate its court to Garlt, though v. exercised." Schwanke not often (1935). 367, 371, 263 N.W. Wis. policy, principle of decisis is a all, stare States, 524 Hohn v. United an inexorable command.

not (1998).40 judgment policy that reflects a 236, 251 It U.S. appli- important that "in most matters it is more right." than that it be settled law be settled cable rule of (1997) (quoting Agostini Felton, 203, 235 521 U.S. Co., 393, 406 285 U.S. Coronado Oil & Gas Burnet v. (1932) (Brandéis, dissenting)). J., understanding responsibil- of our this 98. With judicial inquire ity into the circum- institution, we as demanding satisfy for de- standards stances precedent. parting familiar There are several from overturning prior cases. criteria Wisconsin (Abrahamson, J., concur- Stevens, 2d at 442 Wis. changes developments ring). in the law have First, Second, Id. behind a decision. undermined the rationale newly correspond is a need to make decision there showing that the Third, there is a facts. Id. ascertained precedent detrimental to coherence has become consistency in the law. Id. Among relevant consider- additional determining depart from stare

ations in whether prior in decision is unsound decisis are whether practice, principle, in unworkable whether it is 40 Khan, 3, (1997); also, 20 Oil Co. v. 522 U.S. e.g., See State (1991). Tennessee, 808, Payne v. 501 U.S. 828

118 implicated. whether reliance interests are Allied- Signal, Director, Taxation, v. 768, Inc. Div. 504 U.S. of (1992); 783 see also Planned S.E. Parenthood Pa. v. (1992) (joint Casey, opinion 505 U.S. 854-55 JJ.). Kennedy, O'Connor, Souter, As noted opinion Outagamie County, lead in 244 Wis. may prior

decision to overrule a case turn on whether prior correctly case was decided and whether it has produced body (citing Casey, Id., ¶ a settled of law. 30 (Scalia, concurring part J., at 505 U.S. 999 dissenting part)).

¶ 100. It is not a sufficient reason for this court to precedent large majority overrule its that a of other jurisdictions, binding authority with court, no on this opposing have reached conclusions.41This court no has 41 Edgerton, contrary For state cases that have held see Co., Alabama Plating Co. v. U.S. Fid. & Guar. 690 So.2d 331 (Ala. 1996); Littleton, Compass City Ins. Co. v. 984 P.2d 606 (Colo. Indus., 1999); Atlantic Wood Inc. v. Lumbermen's Under Alliance, (Ga. writing Outboard 1990); App. S.E.2d 541 (Ill. Co., Marine Corp. Liberty v. Mut. Ins. 607 N.E.2d 1204 1992); Corp., Accident & Indem. Co. v. Dana Hartford (Ind. Indus., A.Y.McDonald Inc. v. Ins. 1997); N.E.2d App. (Iowa Am., Co. & 1991); Aetna Cas. Sur. 475 N.W.2d 607 of N. Co., 2002) Eng'g Co. v. Nuclear (Ky. App. 2002 WL 363373 & final); Bausch Lomb Inc. v. Utica Mut. Ins. (opinion yet not (Md. Co., Paper Hazen Co. v. & 1993); U.S. Fid. 625 A.2d 1021 (Mass. Co., Guar. 1990); U.S. Co. v. Aviex 555 N.E.2d 576 (Mich. Co., Travelers Ins. Minn. 1983); App. 336 N.W.2d 838 Co., Mining Mfg. & Co. v. Travelers Indem. 457 N.W.2d 175 (Minn. Indus., Co., Republic Farmland Inc. v. Ins. 1990); (Mo. 1997); Co., Coakley v. Maine & Bonding Cas. S.W.2d 505 (N.H. 1992); Int'l, Morton Inc. Accident v. Gen. Ins. 618 A.2d 777 (N.J. Am., Co. 1993); Spangler C.D. Const. Co. 629 A.2d 831 (N.C. Co., Inc., Eng'g Indus. & 388 S.E.2d 557 Crankshaft Paul Fire & Marine Ins. 1990); Corp. Plastics v. St. Sanborn (Ohio Co., 1993); Coop.,Inc. v. App. Lane Elec. 616 N.E.2d 988 (Or. 1992); App. P.2d 502 Corp., Elec. Ins. 834 Federated Rural (Wash. Co., 1990); & Sur. 784 P.2d 507 Boeing Co. v.Aetna Cas. Co., Cravens, (Wyo. & 748 P.2d 724 Compass Dargan Co. v. Ins. 1988). decisions, federal numerous In addition to these state court law, courts, have also determined that CERCLA applying state liability policies. "damages" under insurance response costs are Co., Ins. 947 F.2d Corp. v. Universal Underwriters See Gerrish (2d 1991) law); SnyderGeneral (applying Vermont 1023 Cir. (5th 1997) Co., 113 F.3d 536 Cir. Century v. Indem. Corp. law); Accident & Lindsay Mfg. Co. v. (applying Texas Hartford 1997) (8th Co., (applying Nebraska 118 F.3d 1263 Cir. Indem. Co., F.2d law); Corp., Inc. v. Pintlar 948 1507 Aetna Cas. & Sur. 1991) (9th Petroleum, law); MAPCOAlaska (applying Idaho Cir. (D. Omaha, Supp. F. 941 Alaska v. Nat. Ins. Co. 795 Inc. Cent. Co., Assur. 704 F. 1991); Chesapeake Corp. Utils. v. Am. Home (D. 1989); v. Cal. Potomac Elec. Power Co. Union Supp. 551 Del. (D. Co., 1991); v. Corp. GAF Cont'l Supp. Ill F. 968 D.C. Ins. (E.D. Co., 1989); La. Nat'l Indem. Co.v. U.S. 1989 WL 1761 Cas. (W.D. Control, Inc., 1989); Supp. Okla. Fed. 717 F. 765 Pollution (M.D. Co., Supp. F. Pa. Susquehanna Broad. Ins. Co. Minit-Lube, 1989); Quaker Inc. v. Fireman's Fund Ins. State (D. 1994); Co., Corp. v. Supp. 1278 Utah Morrow 868 F. (E.D. Co., Va. Supp. 101 F. Harleysville Mut. Ins. 2000). of Maine and California

Presently, only Supreme Courts Edgerton, that of consistent with maintain a result somewhat ."damages" response are not considered whereby CERCLA costs states, However, in even the courts these policies. under CGL in reaching denying coverage as found the same result while Edgerton. the rationale of When have not followed Edgerton, in phrase damages" "as reached its conclusion that the Maine costs, it relied response CERCLA policies did not include CGL language prior legal conclusion that such part on that state's punitive damages. Patrons not cover the costs would Oxford (Me. 1990). Marois, A.2d 19 n.8 Mut. Ins. Co. v. being solitary if apprehension law beacon about application position a of this on sound our is based light jurisprudence. dim and But when our state's prepared fading, make then this court must be straightjacket nor Stare decisis is neither correction. Carpenters 26 Local Union No. an immutable rule. See (1st Co., 136, 142 Cir. Fid. & Guar. 215 F.3d v. U.S. 2000). damage law to the rule of We do more thereby perpetu- obstinately refusing errors, to admit ating injustice, by overturning an erroneous deci- than sion. Edgerton

B. Stare Decisis and principles of stare decisis 101. Given these permitting doctrine, from the criteria for deviation Edgerton cannot remain conclude that the decision we contravening applying stare the criteria for the law. contrary on the issue of have held to the Wisconsin courts a CGL "damages" under punitive damages are covered whether Maxey, 124 Wis. excluded. See Brown v. explicitly unless policy, (1985). 426, 443, 369 N.W.2d677 in this play with the issues at struggled law has California Co., Foster-Gardner, Fire Ins. 959 Inc. v. Nat'l Union case. See (Cal. Court, 799 P.2d 1998); Superior AIU Ins. Co. v. P.2d Court, (Cal. 1990); Corp. Superior Aerojet-General 1989). (Cal. decision, the In a 2001 App. Ct. Rptr. Cal. unique con reached the somewhat Supreme Court California because, costs are not covered response that CERCLA clusion suit and duty without formal there is no to defend since duty to indem broader than duty to defend is because the duty to if there is no duty no to defend nify, there can be Supe Lloyd's London v. at indemnify. Certain Underwriters 2001). (Cal. Court, 94, 102 apparently This decision rior 16 P.3d remediating before to wait and be sued encourages insureds coverage. liability insurance they if to receive property, wish many given decisis, we note that of the reasons earlier opinion explain why Edgerton in this must be over- ruled. present

¶ 102. Wefirst observe that the case is not solely Edgerton. interplay about It is about the Edgerton subsequent with our unanimous decision in categories Hills. The in established Johnson I Controls are derivative of these two decisions and the conflict Although purported between them. Hills to retain Edgerton totality, severely in its it undercut the ratio- Edgerton nale which the court denied relief to quite comparable insureds circumstances to those Hills. qualification

¶ 103. held without response remediating CERCLA costs aimed at contami property damages nated do not constitute for which required policies. Edg under standard CGL years erton, 184 2d at later, Wis. 782. Three this court held in Hills that an insurer must defend an action against by party seeking its insured a third to recover expended up it costs under CERCLA to clean land that damaged by Hills, had been the insured. 209 Wis. at2d reaching clearly In conclusion, 185. this latter we long "It stated: has been the law of this state that the repairing restoring damaged property cost of original proper water to its condition is a measure of compensatory damages. passage . . . The of CERCLA changed and similar state statutes has not the law of holding, remedies." Id. at 181-82. As a result of this an liability response insured's for certain CERCLA costs "damages" were deemed to be under a standard CGL policy. sought Hills recast the nature of the relief in involving response actions CERCLA costs. This recast ing correctly perceived liability in nature of these misap- Edgerton's squarely with at odds cases, but was plication of dam- law on the remediation of Wisconsin aged property. comple- was

¶ Hills' correction 104. Hills heeded the consideration. another mented expectations when it assessed of the insured reasonable damages under the were covered at issue whether the policies. also Hills, 183-84; at see 2d 209 Wis. CGL II, 17 n.4. 2d Controls 250 Wis. Johnson Edgerton, court stated: the Hills contrast to protect in- intended to liability policies are [B]ecause damage to third resulting in negligent acts sureds from gen- insured, buying comprehensive when parties, "an activity any result- liability coverage, expects eral damage property unexpected . . . ing in unintended and specifically unless it is will be covered party to a third excluded." (quoting al., Patterns D. Chesler et Robert

Id. at 184 Coverage Interpretation Haz- Insurance Judicial Rutgers Liability, L.J. 69-70 ardous Waste Site opinion). (1986), emphasis Hills added with openly retain endeavored Still, Hills Edgerton's holdings Hills, manner. some straining preserve However, 180, 182, 185. at only Edgerton, decision the inevitable deferred Hills today. sense, therefore, In one this court makes by Edgerton the clear is eased to overrule decision Edgerton recon- cannot be that Hills conclusion arbitrary illogical generating without ciled opinion. As a in this earlier discussed distinctions force practical or limit the if not remove matter, we do of Edgerton, limit the force or must remove of we Hills.42 Because Hills undermined the doctrinal under pinnings Edgerton, prior apt of decision is more Union, be overruled. See Patterson v. McLean Credit (1989). 491 U.S. Perhaps damning weighing

¶ 106. the most factor against Edgerton our continued adherence to is its provide consistency failure to suitable direction and consistency, this area of the law. Without this one of the justifications primary adhering for to stare decisis dis City solves. See Milwaukee v.Firemen's of Relief Ass'n of City Milwaukee, 42 23, 37-38, 165 Wis. 2d N.W.2d384 (1969) ("the precedent subject state of on this is so contradictory that we conclude. . . that the diverse past holdings repudiate nature of leaves us free to rulings obligation less desirable and from the to deter decisis"). solely mine this case on the basis of stare Nonetheless, the insurers claim that Hills coherently principle whereby established a a reasonable expect coverage brought by insured would for actions inconsistency Hills' with is witnessed who, statement from one lauding commentator while the Edg- shortly made, erton decision after it was correctly failed to predict the According outcome in Hills. to this commentator: Edgerton analyzed relief, holding Since the nature of the its is not solely equivalent limited to landfill cases under CERCLAor state government-ordered Rather, cleanups. statutes. Nor is it limited to holding applies involving to all environmental cases restitu- tionary injunctive regardless brought relief whether the suit is government third-party or a as a claim contribution. Vogt, City Heidi L. Edgerton v. General Casualty Company A Wisconsin: Landmark Decision in' Wisconsin Insurance Cov- 1995) Law, added). erage (May 68 Wis. Law. (emphasis clearly Hills later held contrary to the of this reasonable respect forecast with to a third-party suit for contribution of response payments. CERCLA cost parties expect non-governmental would not third but brought by government, coverage if the even for actions perform insured actions were to command the both repairs payments make the to reme- the or same same They point damaged property. to the the same diate following language from Hills: in the position Hills would

[A] reasonable insured coverage damages" "as to include interpret phrase claim, the EPA or brought by parties other than for DNR, pay monetary him or sums obligates which her to property that negligent of the contamination of because exclusion, fit since owned-property not within the does purchases very that an individual this is reason liability coverage. added). making (emphasis

Hills, In 209 Wis. 2d at 185 statement, did not conclude that the nature this Hills sought changes identity based on the the relief party merely bringing opinion con- the action. The parties in a EPA, when cluded that the DNR recovery are different action, cost somehow CERCLA parties. observation, for the reasons This from other There is tenable as a rule of law. above, is not discussed inconsistency granting coverage logical (Hills) finding "category while not two" cases so-called categories. remaining To the three in the workability, any it is the is coherence or extent there unsup- following arbitrary an distinction function by logic, language ported of the law, policies. Wilcox, 617, 26 Wis. 2d 108. Wilcox (1965), Bain v. North- this court overruled

N.W.2d Railway Co., 98 N.W ern Pacific (1904), succeeding had held that the cases which invariably proper lex rule choice of law Wisconsin reasoning loci delicti.43The the court used to alter the previously by rule striking established these cases ahas parallel reasoning to the Wilcox, this case. In we produced noted that the rule of lex loci had not cer- tainty [ ] produced result, of such that "hard cases deviations from Continuing, Wilcox, the rule." 26 Wis. 2d at 622. opined:

the court appears It therefore that lex loci provided has not a "fixed star" but rather has been merely point a of departure in hard ... cases. "[C]ontinued adherence to a bad rule a high price pay to for predictability. Furthermore, it is doubtful whether a bad rule will provide predictability since the courts will be inclined to engraft exceptions upon it." (quoting Id. at 624-25 Reese, Willis Comments on Jackson, Babcock v. 63 Colum. L. 1251, Rev. (1963)). ¶ 109. As did Bain in the context of choice of law produced theories, certainty "has not the that contemplates," stare decisis Wilcox,26 Wis. 2d at the context of CGL insurance for CERCLA (1997) ("criticisms liability. supra, Stuart, See [of at 876 Edgerton] lead to a appel- movement in the Wisconsin application late courts to restrict the of the decision to case"). only the now-dispositive facts of the Not are the arbitrary, factual issues in these cases but the rule generate tertiary questions seems to yet a level of to be resolved [Hills] the First, courts. "Did the court 43Lex loci delicti is a choice of law principle in tort cases which states that right bring an action vests at the place injury and courts therefore apply should the law of that place. Shirley See A. Wiegand, Intermeddling, Inter Officious loping Chauvinism, (Second), Restatement and Leflar: Pot, Wisconsin's Choice Law Melting 81 Marq. L. Rev. (1998). intentionally distinguish receiving a letter between being EPA or EPA or sued from the DNR 'Edgerton for it continues to stand stated, when DNR receipt proposition from EPA or a letter plan requesting party propose a remediation a DNR damages'?" seeking Todd M.W. does not constitute suit Change . . at Don't Succeed. Turall, First You If Seeking Hope New Insureds Facts?: Defense for Companies Envi- Insurance Indemnification from Cleanup Costs, 119, 139 Envtl. L.J. ronmental Wis. (1999). type by government Second, of contact what subject agency what matter must occur and must rights to insured's be in order alter the the contact liability coverage policies? it Third, does under its CGL complied fully a insured with matter whether government request that not immediate directive does a cost action, then the is sued in remedial and insured third-party recovery portion Fourth, what of action? if a response an insured received costs is incurred before relating cleanup property? an Fifth, can demand that contesting good for ever faith basis insured have liability basis, to take immediate and, on that refuse many questions, perhaps more, are action? These system, Edgerton/Hills offspring as at least of the appeals. interpreted of the court ¶ amici curiae the insurers and several While fervently arguing maintain court court that before this appeals court an ease of decisions exhibit circuit Edgerton, reconciling the cases the Hills decision with appeals has court of belie that notion. The themselves application interpretation in its not been uniform judges Edgerton on fact, the court and Hills.44 44 Peters, Assocs., & Inc. v. Compare E. Lee Robert (Ct. 1996) ("the 521, effect 509, App. 457 N.W.2d appeals speculate any congru- have been forced to over ence accomplishing between the two decisions, without any conclusive reconciliation. In Johnson II, Controls appeals the court of remarked that while Hills' at- tempted Edgerton "may harmonization with seem like arbitrary somewhat of an some, distinction to this is the supreme obligated law set our court and we are apply this II, law."Johnson Controls 250 Wis. 2d 319, interesting 17. The court then surmised, "It is to note deny any is not to coverage and all to an insured whenever a case involves contaminated property"); Sauk ("We County, 202 Wis. 2d at 442 persuaded are not by [the argument insurer's] that because the counterclaims are pre upon mised contribution and theories, indemnification that the merely counterclaims seek equitable relief, which does not damages constitute pursuant Edgerton."); Spic & Span, Inc. Co., (Ct. v. Cont'l Cas. 118, 127, Wis. 2d 552 N.W.2d435 App. 1996) (finding that insurers had duty to defend and indemnify previously insured that occupied and controlled contaminated land for which third-parties later sued insured to recover costs remediating property), with Hydrite Co., State v. Chem. 222, 2002 WI App 25, Wis. 2d 652 N.W.2d 828 (denying liability insurance public for nuisance claim from DNR seeking monetary damages pollution from in sured because the substance of the sought relief compel was to insured to pay for cleanup); Amcast Indus. Corp. v. Affiliated Co., (Ct. FM Ins. 160-62, Wis. 2d 584 N.W.2d218 App. 1998) (finding that Edgerton precluded coverage and that fundamental difference between Edgerton and Hills is not based on the ownership of the property question but rather on whether there is a third-party claim); Hydrite Chem. Co. v. Co., Aetna Cas. & Sun 26, 37-39, 220 Wis. 2d 582 N.W.2d423 (Ct. 1998) App. (some); Regent Manitowoc, Ins. Co. City 205 of (Ct. 450, 461, 1996) Wis. 2d ("Under 556 N.W.2d 405 App. ... City Edgerton, an seeking action recovery of past response of costs by incurred governments federal and state is not an action seeking damages.").

128 Edgerton the in outcome between difference part Edgerton, may in in Hills have resulted because expectations supreme the court failed to the consider expectation Hills, in was insured; the whereas such generous Id., ¶ n.4. consideration." Alter afforded natively, Hydrite Judge Roggensack, her in in dissent Surety Casualty Co., 220 v. Aetna & Wis. Chemical Co. (Ct. 1998), App. suggested that 582 N.W.2d only analysis required an of whether the claims Hills damage property third-party or to arose out of the only property, the scenario with latter insured's owned policies. being CGL Id. at not indemnified under the dissenting).45 (Roggensack, J., 44-45 generated Edgerton confusion nationally. In one treatise dis- Hills noticed has been jurisdictions cussing have various answered how cleanup question under CERCLA are of whether costs "damages" policies, authors coverable under CGL community surprise legal caused to the describe the Mark C. 1 Tod I. Zuckerman & decision. Litigation: Law Raskoff, Environmental Insurance 2002). (1996 Speaking Supp. § Practice, 3:6, at & 3-182 (and contrast to their less-editorial with candor stark jurisdictions), concerning the law in other remarks appraised the situation as follows: authors decision Supreme Court's 1994 Since Wisconsin Casualty General Co. Wisconsin City Edgerton v "damages" are cleanup costs law on the issue whether quite confusing. been has damage" "property because .. Thereafter, itself . Supreme Wisconsin Court County, Sauk (interpreting 2d at 441 See also Wis. are Edgerton and Hills as basing coverage on whether the costs party contaminated versus property the owns related to the third-party property).

began ruling City to limit the effect of its in ofEdgerton. result, As a in Wisconsin there is for certain types expenses. of cleanup added). (emphasis at

Id. 3-183 The then commentators proceed system four-category to discuss articulated appeals the court of in Johnson I and Controls agree objective Johnson II. Controls We this with as- uncertainty developed post- sessment of the that has Edgerton in Wisconsin on this issue law. By overruling Edgerton's

¶ 112. conclusion on the damages" language adopting "as rationale, Hills rectify present we will confusion arbitrariness surrounding recovery CERCLA cost actions Wiscon- heading troubling sin, while off some of the issues still resulting on horizon. The clear, rule should be comprehensive, logical: liability imposed under against an CERCLA insured who has to the contributed property damages" contamination of "as if covered satisfy liability expended to costs are remediate, pay damaged property, for the remediation of, the provided that the costs are not excluded other some provision policy. of the

¶ 113. note the We nature conduct under lying types these of actions it because bears on another general depart rule, consideration. As courts will from only stare decisis where unintentional in conduct is City Milwaukee, volved. See Gottlieb 2dWis. (1967). 408, 431, N.W.2d "The stare rules of give attempt certainty decisis law, our so conduct planned light legal can be of foreseeable conse quences. Certainty, however, is less relevant in the law planned, torts, of unintentional where conduct is not particularly, in the or, law of contracts more than in the property." Wilcox, at law real legal underlying issues in 114. The conduct primary involves unintentional conduct two this case liability particular ways. of a breed First, CERCLA is liability apparent limi- and retroactive without strict imposes liability words, on tation. In other CERCLA may doing anything-unlaw- persons not have been who They they ful at the time caused the contamination. using may, fact, have state-of-the-art technolo- been Liability against damage. gies protect environmental imposed not on those did cause con- can also be who merely land.46 tamination, but owned the pre policies designed Second, CGL were e.g., cisely See, and hazards. to cover known unknown (citing McDonald, N.W.2d at 621 Jordan S. A.Y. 475 Coverage Yuen, A. Environmen Stanzler & Charles for History 'Damages" Cleanup in the tal Costs: Word of Liability Comprehensive Form General Standard 462-65). Policy, 449, L. It is thus 1990 Colum. Bus. Rev. argue as Johnson Con that insureds such mistaken bargained paid premiums to cover never for trols liability complying unique with the scheme costs of 46 Inc., 955, Tape v. Tesa Town Supp. 891 F. See of Wallkill 1995) ("the (S.D.N.Y. make policy CERCLA [is] 961 costs, regardless pay cleanup their generators share lawful the time their hazardous their actions were at whether landfill"); Copeland of at John disposed were materials Mistakes, 1405, 1446 Mary L. CERCLA'S Rev. Wm. & Nagle, and SARA: Superfund (1997); Glass, Ann & Elizabeth n.218 L. Any Left?, Are Envtl. Rev. There Harv. Defenses (1988) ("CERCLA concept change in the traditional represents liability, to strict liability. common law defenses of strict undertaken, at the time or lawful act such as state-of-the-art defendants."). are available to CERCLA not policies compre- are CERCLA.47CGL identified their hensive inclusive nature. CERCLA When was adopted, liability it created strict fault, not based on joint responsible parties severally made liable, and liability imposed retroactively. Therefore, neither insur- bargained ers nor insureds could have over specific liability imposed that would be under such system. public ¶ 116. There has not been such a mass of private business transacted in accordance with that we need to abide stare decisis. See (1975). Maine, United States v. 420 U.S. We are mindful of the businesses, reliance interests of insur- (both companies, previous litigants ance actual and potential), and numerous others that have arisen due to holding Edgerton. recognize this court's in We that appeals circuit courts and the of court in this state have faithfully applied holdings Edgerton particu- of —in "damages" lar the conclusion that do not mean CERCLA

47Similarly, Johnson Controls insurers be should not heard argue coverage precluded policies is under these because it was Johnson Controls' business decisions and actions that pollution caused the for liability which their arises. Such logic nullify validity would work to any coverage of for unknown hazards purpose comprehensive and liabilities. The whole of general liability policies is to "shift the unanticipated risk of the policyholder hazards from to the insurer." Mark S. Parris & Rodney Younker, Damages" B. The "As Clause Under Washing Holding ton Law: Their Bargain, Insurers to 28 Gonz. L. Rev. (1992-93). 609, Congress, by CERCLA, 621-22 enacting decided retroactively impose costly liability groups persons on of who anticipate did not of type liability. only question this The is group which of unsuspecting potential payees of these cost (insureds insurers) their ultimately or must for pay this liabil ity? inquiry strictly The answer to this one of contractual construction. ability,

response their and that costs—to best prin- been decided with these cases have numerous ciples. meaning contract insurance Because possible, we are settled should remain whenever terms prior interpretations generally disinclined to reverse these terms. of CERCLA However, treatment the CGL's policy unique, presents construc unusual, if not

claims justify problems, this court's deviation from which tion policies general principle. Most, all, not executed if CGL today governed either this decision will not be language Edgerton. policy in at issue this case The CGL long ago been rendered and has since was drafted largely inapplicable actions.

in the context of CERCLA companies Beginning revised their insurance pollution policies absolute to include standardized CGL coverage.48 on This revision followed exclusions from coverage periods in which heels of a decade over pollution policies exclusion limited had included CGL Co., 228 Nat. Ins. See Peace v. Northwestern clauses. (1999) (explaining this 106, 141, 596 N.W.2d Wis. pollution language policy related in CGL evolution exclusions); L. L. Julian & Charles Schlum- also Jim see Clean-up Coverage berger, Environmental Insurance Liability Comprehensive Policies, General Costs Under (1996). 58-59 Ark. Little Rock L. Rev. 19 U. longer policies given case are no effect this CGL Edger- any being they at time marketed, nor were after credibly argue that Therefore, the insurers cannot ton. 48 Edgerton v. General City Schneider, See Rachel A. to Do? 2 Wis. Envtl. L.J. Casualty: What's a Poor Insured (1995). universally held almost been provisions have These 284 Mark I. Zuckerman & C. be clear and enforceable. See Tod to Law and Prac Litigation: Environmental Insurance Raskoff, 2002). (1996 tice, n.1, Supp. § 3-2 & 3:1 at Edgerton significant interests, established reliance terms of how insurance contracts have been drafted and bargained by for, that will be harmed its reversal.49 Finally,

¶ 118. dowe not share the dire insurers' prediction overruling Edgerton that will result coverage litigation dramatic increase in insurance and unnecessary expenditure litigation judicial coverage resources to address that, issues the insurers allege, are now avoided. above, As discussed everything litigation itself has done but forestall in this specific area of the law. In addition to the case, Hills appellate published decisions, numerous both and un- published, many circuit court actions have tran- spired Edgerton, attempting since each to resolve nu- by Edgerton. merous issues left unsettled concerning coverage, Moreover, other issues even under sure, beTo insurers and may insureds have assessed respective their expected obligations costs and in situations governed Edgerton and have accordingly. accounted How ever, ancillary this type reliance is not the of conduct modifica upon tion which the merit of stare predicated. decisis is addition, companies, including fact that Johnson Controls, (EIL) purchased have Impairment Liability Environmental polices supplement

insurance general liability their policies is not an indication of on holdings reliance Edgerton. Rather, have, it shows that insurers since the issu ance policies case, of the CGL at issue in this realized that the scope policies of former response costs, CGL included these the insurers did costly not want to property cover such dam ages, they and that policies revised the CGL to expressly coverage. eliminate such simply Insureds and rationally re sponded to the resultant void in their coverage purchased newly policies offered EIL gap fill the created the insur companies' ance own attempts preclude coverage of these Am., See Corp. liabilities. Olin v. Ins. Co. 221 F.3d of N. (2d 2000). Cir. by Edgerton/Hills of the court scheme articulated appear appeals I, destined to arise Controls Johnson attempt to continue its strained if court were to this Hills. reconcile with compelling ample

¶ rea- sum, 119. In there are Edgerton. applicable law rules of to overrule sons by Edgerton much less settled, are not established Edgerton, correctly. Therefore, of the errors settled catalogued amplified by opinion in this and earlier by preceding this court. discussion, must be corrected V alleging government-issued an notice 120. A response liability costs un- for environmental insured's legal of der CERCLA constitutes proceeding commencement context, func- that, is the in the CERCLA pro- equivalent a suit. These administrative tional substantially ceedings and in nature are adversarial respect its with the interests of the insured affect liability obligations that hold and under CERCLA. We reasonably expected CGL its Controls Johnson begin duty after it received to defend would insurers' conveyed responsible party potentially them letters that costs incurred insurers. also conclude to the We up damaged property a result an insured's as clean liability is are an insured CERCLA sums that

under damages legally obligated pay be indem- as must insurers, unless nified Johnson Controls' policies. provisions in the other excluded reaching conclusions, overrule these we Casualty Wisconsin, City Edgerton Co. v. General (1994), reject the 517 N.W.2d Wis. damages narrowly in Shore- definition of too stated wood.

¶ 122. Because we reach these conclusions, there competing policy argu- no is need to wrestle with the relating categories ments by four, three and as defined appeals. Edgerton, the court of Without there is no category category one situation; one, without there categories can be no three and fact, four. In the entire four-category taxonomy by developed need for the the appeals disappears consequential court of age principles and the dam- universally apply, irrespective

of Hills whether the insured commences remediation under its legal obligations prescribed under CERCLA or Wis. recovery Stat. ch. 292, or whether a cost action is brought by any party. DNR, EPA, the the another Although

¶ 123. this court would like to end this years litigation, action after more than we must proceedings remand the cause for further consistent opinion. with this The insurers have retained defenses policies related to other exclusions the disputed present other issues of fact. Under the and/or posture scope action, of this these issues are outside the present judicially of our review and remain to be determined.

By appeals the Court.—The decision of the court of reversed, is and the cause is remanded to the circuit proceedings opin- court for further consistent with this ion. (concur-

¶ 124. N. CROOKS, PATRICK J. ring). agree majority opinion, IWhile with the I write separately express my regret length to- over the of time presented by Edgerton it took the difficulties the decision to be resolved. years ago Six this court's decisions Gen-

eral Hills, Cas. Co. 167, Wisconsin 209 Wis. 2d (1997), Heritage N.W.2d718 and Wisconsin PSC v. Mut. (1997), sought Co., Wis. 2d 561 N.W.2d726 Ins. by damage decision, the caused limit majority op., overruling explicitly that case. See without ¶ 17. Heritage high- in Hills and 126. Our decisions employ

lighted proper focus courts should when correctly determining like Controls. As cases Johnson analysis majority, he on the should noted interpretation policy, and not on envi- insurance majority op., ¶ The Hills 31 n.16. ronmental law. See opinion stated: insurance con interpretation of an general, of contract construc principles controlled

tract Co., See, v. Allstate Ins. e.g., Kuhn tion. Ziegler], [v. (1995); Maas 172 Wis. 60, 532 124 N.W.2d (1992)]. objec primary 70, 79, The [492 N.W.2d 621 carry a to ascertain and interpreting in contract tive Maas, See, e.g., parties. of the intentions the out Employ v. American Kremers-Urhan Co. 79; Wis. 2d at Co., 735, 722, N.W.2d 156 Ins. Wis. 2d ers (1984). language of is that the primary importance "Of to mean what interpreted be policy insurance should an in of insured would person position the a reasonable Sprangers [v. to mean." understood words have Co.], 521, 536, N.W.2d 1 Greatway Ins. [514 Wis. 2d Kuhn, 60; accord, Kremers- e.g., 2d at (1994)]; 193 Wis. Co., at Urhan 119 Wis. 2d 735.

Hills, 2d at 175. emphasized "It Hills that:

¶ It in 127. was also long state that the cost law this has been the restoring damaged property repairing and water to compensa- proper original measure its condition is majority by damages." tory át As noted Id. at 181. sup- ¶ were cited cases and authorities 57, several not port did decision of this statement. all. at these and authorities address cases Although ¶ 128. the lower courts made a valiant apply Heritage, effort to our decisions in Hills and two categories developed new were in order to determine whether various situations would or would not he by language comprehensive general liability covered policies. majority op., ¶ insurance See 21. limiting Edgerton, hoped 129. Instead of as we Heritage,

would occur after Hills the court of appeals categories concluded that the two new were by Edgerton. majority controlled op., the rationale of See According appeals: to the court of category The third presents a situation where the responsible insured is at part least of the contami- nation of a own, site that it does not and has been by government site, directed to remediate the but has not done so. The government insured is sued money spent recover it clean up the site. Employers

Johnson Wausau, Controls Ins. 2002 WI («Johnson App ¶30, 250 Wis. 2d 640 N.W.2d205 II). appeals Controls The court of also stated: category The fourth encompasses situations where responsible insured is for at part least of the own, contamination of a site it does not and has been aby government entity directed to remediate the site, but has not done so. The insured is sued site's responsible owner or others also for the contami- nation who up cleaned the site at government's direction.

Id., ¶ appeals, finding 8. court of no insurance by categories for scenarios covered three and four, further stated: four, categories

In and two, three unlike in a property seeking is not "legaldamages", owner injury for contrib- by who has either caused or property to its one Rather, government and pollution. to the uted by government up clean property forced owners Controls allegedly by caused Johnson contamination "equitable noted was mon- seeking Edgerton are what is, spent in relief," recompense that for monies etary environmental-protection the nation's complying with spent by been Johnson money that would have laws— government's complied it had with Controls if cleanup directives. 784). Edgerton, (citing 2d at

Id., ¶ limiting approach ¶ not result in the This did 130. application hoped would occur from function that it was Heritage. retrospect, quite clear it seems of Hills Edg- distinguished, overruled, have not we should ago.1 years six erton problems

¶ created this, As result unfortunately Edgerton un- allowed continue were necessarily years after our decisions six more Heritage. Hills and respectfully discussed, I reasons 132. For the

concur. disagree (dissenting). I WILCOX, E J. 133. JON regretfully majority opinion, overturns which with the Abraha- opinion in Hills Chief Justice concurring her 1 In majority opinion marks that "the mson noted her belief Shorewood, upon overruling which significant step towards her desire "embrace . . . ." further stated Edgerton relied She overruling by expressly Shorewood the inevitable now application limited thereby recognizing the did not wish to see Shorewood damages." on She decision judicial in small measures debatable Edgerton "overturned Hills, Wis. 2d Cas. Co. Wisconsin distinctions." General (1997) C.J., (Abrahamson, concur 185-86, 561 N.W.2d ring). City Edgerton this court's decision in v. General of Casualty Company Wisconsin, 750, 184 Wis. 2d of (1994), nearly ago,

N.W.2d rendered a decade upon private par relied both courts and numerous majority seriously ties. Because the fails to consider support several factors that adherence to the doctrine respectfully case, I stare decisis in this dissent from majority opinion. originated ¶ 134. This case in 1989. After the original circuit in court action dismissed Johnson regarding Controls' claims insurance 1995, in bypass petition. this holding came case before us on a After petition abeyance until our decision Casualty Company General Hills, v. Wisconsin (1997), Wis. 2d 561 N.W.2d718 was rendered, this unanimously court, 10, 1997, on June denied Johnson petition, many argu Controls' which made of the same presented ments now. Since the time was presented decided, this court has been with numerous opportunities requests to overturn the decision. today, consistently Until this court has refused to so. do importantly, nothing legal ¶ 135. More conse- quence changed Edgerton. has since The insurance policy language changed. appli- before us has not Comprehensive law, cable federal Environmental Response, Compensation, Liability (CERCLA), Act changed. present has not This case does not us a with wholly only thing changed new set of facts. The that has personnel is the of this court and this court's as view to proper "damages" definitions of and "suit." Overrul- ing body an established of cases in this context raises questions "imple- serious about whether the court is menting 'principles . . . founded in the law rather than proclivities Payne in the Tennessee, individuals.'" (1991) (Marshall, dissenting) 501 U.S. J., omitted). (citation important decisis is not "\S\tare rely precedent merely on to individuals struc- because activity fidelity but to their commercial because ture conception part parcel precedent a the of of is judg- 'judiciary impersonal of and reasoned aas source " (citation (Marshall, dissenting) J., ments.' Id. at 852 omitted).1 majority opinion Although offers

lengthy presentation decisis, of the doctrine of stare body simply overruling of law an established Wisconsin Edgerton wrongly decided, the it was feels because justice majority, fails do a doctrine that effect, in to to judicial pillars of our one of the foundational forms system. pre-

¶ 137. is well-established Because question Wisconsin, who has the is not cedent policy argument regarding applicable lan- better majority today's guage, has come forward but "whether [cjourt extraordinary showing type this that of with overruling historically its one of demanded before has (Marshall, Payne, precedents." J., 501 at 848 dis- U.S. senting).2 offering repudia- fervent Thus, rather than

1 akin to of jurisprudence is Wisconsin's stare decisis See, Janesville, v. 174 e.g., City Linville federal courts. of 1993) (Ct. ("[T]he 571, 591-92, App. 465 497 2d N.W.2d Wis. a substantial disincentive that stare decisis is principle court.") any Planned Parenthood (citing change applicable Stevens, (1992); v. Casey, U.S. 833 State Pa. v. 505 Southern of (1994) (Abrahamson, 410, 441-42, 591 511 N.W.2d Health, J., for Reprod. v. Akron Ctr. concurring) (quoting Akron (1983)). Inc., 416, 462 U.S. 420

2 usually policy, the wise because "Adhering precedent 'is applicable matters, important that the rule most it is more Tennessee, right.1" Payne v. 501 it be settled law be settled than (1991). U.S. majority's rehashing argu-

tion of the rationale and an previously merely explain why settled, ment I the court adhere to the stare should doctrine of in the decisis matter before us.

¶ 138. "Stare decisis is the motto of courts (1859). justice." Booth, Ableman Adher Wis. "[rjespect ence to stare decisis is crucial because precedent 'promotes predictable, evenhanded, development legal principles, consistent fosters reli judicial decisions, ance on and contributes to the actual perceived integrity judicial process.'" of the State v. Outagamie County Adjustment, Bd. 2dWis. (2001). 628 N.W.2d376

Fidelity precedent, to of doctrine stare decisis decided", "stand things society is fundamental to "a governed by legal the rule of law."When standards "are open in every case, deciding to revision cases becomes judicial will, mere arbitrary exercise of unpre- with and dictable results." change

No in justified by the law is "a change in the membership of court or a with egregious case more facts." Stevens, 410,

State 181 Wis. 2d 441-42, 511 N.W.2d (1994) (Abrahamson, concurring). J., 591 plain

¶ 139. In addition to the dictates of the overriding doctrine, there are several reliance factors present majority opinion in this context that the fails to address, which demand an adherence to stare decisis. Thus:

We weight should acceptance accord this continued holding. our earlier Stare has decisis added force legislature, citizens, when the in public sphere,

142 realm, have in reliance on a private in the acted decision, overruling the for in this instance previous expectations dislodge rights would settled decision legislative response. require an extensive Rys. Comm'n, U.S. v. South Carolina Pub. Hilton (1991). 197, 202 all, of factors are Most, if not these reliance industry

present First, in this the insurance is one case. heavily regulated in the of the most business sectors legislature past, specific has, enacted state. policy legislation response to our construction stronger language.3 Considerations of stare decisis are legislative prerogative deci- to overturn our where the (Scalia, Hilton, J., U.S. at 202 sions is involved. See (" spe- concurring) decisis have 'Considerations of stare legislative power implicated, [where] cial force Congress have free alter what we remains done.'") (internal omitted). Thus, adherence citation especially appropriate in Wis- stare decisis is because say regulation legislature over has the final consin, the possibly industry act to and it could of the insurance change Edgerton.4 the rule of 632.32(5)(f) (1995-96), See, an § e.g., permitting Wis. Stat. policy prohibits an

insurer to add clause to automobile Milwaukee, benefits; City "stacking" policy Blazekovic v. (noting Wis. WI 41, Wis.2d 610 N.W.2d467 632.32(5)(f) the § "validades] clauses to avoid Stat. such law"). case Wis. duplication permitted prior under of benefits Cf. (1995-96), abrogating judicial blue-pencil the § Stat 103.465 133, 70 Torborg, Wis. in Fullerton Lumber Co. v. 270 announced (1955). 585 N.W.2d 4 slightly in a different Supreme the has said As Court regulation final of interstate "Congress say has the over context: by simply change Bellas Hess and it can rule of commerce recognized of stare long that doctrine saying so. We have

143 Moreover, in favor "Considerations involving prop- stare at their decisis are acme in cases erty rights, and contract where reliance are interests Payne, involved." 501 U.S. at 828.5 court, it general, [W]e have made clear this from stare only would depart decisis where uninten- only when there tional conduct was involved and then altering were compelling reasons court-made rule. recently] pointed [We also reluctance out our to deviate precedent from where rules of contract or property were involved. Reszcynski, 836, 869,

Antoniewicz v. 70 Wis. 2d (1975) (internal (emphasis original) N.W.2d 1 cita quotations omitted); City tions and see also Gottlieb v. (1967) Milwaukee, 431, 147 N.W.2d633 (accord). majority opinion attempts

¶ 142. The to avoid by characterizing this consideration the decision one as involving majority unintentional tort-like conduct. See op., may ¶¶ While 113-15. this be true insofar as underlying giving policy dispute conduct rise to the majority today abrogates concerned, decision a rule regarding interpretation. contract The court alters rights expectations parties to a contract; it does merely governing not create a new rule standards purchase behavior. The determination of whether to 'special decisis has force' 'Congress where remains free to alter Quill Dakota, Corp. v. North what we have done.'" 504 U.S (1992) (citation omitted). J., (Scalia, concurring) Quill See Corp., also ("Moreover, at 320 U.S. demands of the doctrine are 'at their . . . acme where reliance involved.'") (citations omitted). interests are drafting types of insurance and the certain certainly language policies within insurance constitutes conduct. intentional particu- Further, decisis concerns are stare strong

larly affected where substantial reliance community Thus, where a "rule . . . has business occurs. part of the framework of a sizeable become basic stability orderly industry!,] [t]he devel- 'interest undergirds opment of the law' that the doctrine of stare precedent." decisis . . . counsels adherence settled (1992) Corp. Dakota, 298, 504 U.S. 317 Quill v. North omitted). (internal that the citations There is no doubt industry." industry constitutes a "sizeable insurance litigants Furthermore, who have been the number of subjected Edgerton and definition of "dam- to the Hills ages" and "suit" demonstrate that part have of the basic frame- Hills decisions become industry.6 Edgerton itself has work of the insurance 6 Co., See, 222, 257 App 2002 WI e.g., Hydrite State v. Chem. Nor-Lake, 554, 828; & Inc. v.Aetna Cas. Sun Wis. 2d 652 N.W.2d Co., 526, 471, 94, 611 N.W.2d rev. App. 2000 WI 234 Wis. 2d 115; denied, 88, 253, 2d 616 N.W.2d Amcast 2000 WI 237 Wis. Co., 145, FM 221 Wis. 2d 584 Corp. Indus. v. Ins. Affiliated (Ct. denied, 654, 1998), 221 Wis. 2d 588 App. 218 rev. N.W.2d Co., (1998); v. Cas. & Sur. Hydrite Chem. Co. Aetna N.W.2d 631 (Ct. denied, 26, 1998), 220 App. 2d 423 rev. 220 Wis. 582 N.W.2d Assoc., 363, (1998); E. Lee & Inc. 585 N.W.2d 156 Robert Wis. 2d (Ct. 1996), Peters, 509, rev. App. 2d 457 v. 206 Wis. 557 N.W.2d (1997); Span, denied, 531, Spic 298 211 Wis. 2d 568 N.W.2d (Ct. Co., Inc., 118, App 435 203 2d 552 N.W.2d v. Cont't Cas. Wis. (1997); denied, 297 Sauk 1996), 2d 568 N.W.2d rev. Wis. Wausau, County Employers Ins. of (Ct. denied, 530, 568 1996), 211 Wis. 2d App. rev. N.W.2d Manitowoc, (1997); City Regent Ins. Co. v. N.W.2d 297 242 times since it was decided.7 While been cited obviously agree the not all of these authorities with Edgerton holding, the number of citations itself dem- Edgerton has become in this onstrates how entrenched large area of the law. In addition to the number of subjected litigants Edgerton law, and to the Hills rule of very probable it that a substantial number of busi- Edgerton, relying litigating nesses, on refrained from disputes related with their CERCLA insurers. majority ¶ "[m]ost, if all, 144. The asserts that not polices today governed by executed will not be CGL by Edgerton." Majority op., ¶ either this decision or (emphasis majority). majority proceeds in The then argue supports that this fact their refusal to adhere to Regardless applicability today's stare decisis. of the of policies, decision to current insurance the fact remains group similarly insureds, that a substantial of situated policy language with identical to Johnson Controls' policy, subjected Edgerton have insurance been Having in and Hills rule of law. determined Hills that principles Edgerton controlling were still in the through subsequent context, CERCLA our assur- validity Edgerton by rejecting multiple ances of the requests Edgerton past, ought to overturn in the "we hardship upon not visit economic who took at those us Corp., (Scalia, Quill our J., word." 504 U.S at 321 (citation omitted). concurring) practical overruling Edgerton ¶ The 145. effect of subject nearly vitality, now, after a decade of is to (Ct. denied, 1996), App. Wis. 2d 556 N.W.2d405 rev. (1997). majority Wis. 2d 568 N.W.2d297 The concedes this point. majority op., See 118. cases, decision, This list includes 86 one administrative secondary sources, including practice numerous several guides, specialty reporters, and insurance treatises. similarly group litigants situated to two different merely upon they litigated rules of law based the time dispute. contrary their principles This result runs basic justice society.8 in a free Edgerton, Moreover, the fact that since purchased insureds have additional forms of insurance pollution cleanup expenses to cover demonstrates there has been on substantial reliance community. majority insurance asserts that change language policy development of new Edger- forms of does not evidence reliance on ton, but rather: have,

shows that insurers since the issuance of CGL case, policies scope at issue in this realized that the of polices costs, response former CGL included these that costly property the insurers did not want to cover such damages, they policies that revised the CGL expressly coverage. eliminate such Majority op., ¶ 117 n.49. Edgerton,

¶ However, 147. after Wisconsin was among minority jurisdictions that held distinct that "damages" policies in CGL did not include CERCLA response majority's may Thus, costs. while the rationale jurisdictions regarding adopting hold true mass contrary probable rule, Wisconsin, it is more that in pollution purchased other forms of insurance were specifically because this court found that a standard policy expenses. CGL did not cover these Although majority purports ¶ to be 148. . . "mindful of the reliance interests of businesses . holding Edgerton[,Y due have arisen to this court's (N.Y. 1976) Jones, 913, People See 350 N.E.2d Nicomachea, (Breitel, C.J., Aristotle, dissenting) (citing Ethica (Ross ed.)). V, 1129a, book 1131a ¶¶ proceeds majority op., "To to assert: be 116, it then may have assessed their and insureds sure, insurers obligations expected respective in situations costs accordingly. governed by Edgerton and have accounted type ancillary reliance is not the However, this upon merit stare which the conduct modification Majority op., predicated." ¶ 117 n.49. decisis is contrary, the fundamental Quite the one of provide justifications the rule of stare decisis is society, upon predictable rule of law which consistent may properly particularly order their af- businesses, decision-making, engage in rational fairs, i.e., business legal the continuous ominous threat of without changed. e.g., being See, James decisions bases for those Distilling Georgia, v. dissenting) 501 U.S. 551-52 B. Beam Co. ("At (1991) (O'Connor, core, J., its stare their affected the law to order decisis allows those upon fear that the established law affairs without suddenly they rely pulled under will be out from which them."); (7th Co., 1358, 1367 Khan v. State Oil 93 F.3d 1996) ("[W]e (Ripple, concurring) ought en- J., Cir. through application of stare strict of the doctrine sure, sufficiently pre- precedent, that the law is decisis permit their certain to businesses to order dictable and understanding a clear of what the law affairs with (N.J. requires."); Brennan, 157 A.2d Smith v. 1960) ("Stare applies primarily to deci- decisis . . . and on the basis of , . . . which invite reliance sions e.g., in affairs, the field of which men order their rights."). property contract majority is correct when it notes 150. While policy all known and a standard CGL covers majority Edgerton op., ¶ 115, losses, unknown since rationally they Hills, concluded that and insurers have liability response costs when have no for environmental the costs are incurred as result of administrative party proceedings, opposed to certain third as lawsuits. policies, general, in Thus, while their covered all known Edgerton, losses, and unknown after court made this categories known to insurers that certain of losses Regardless of would not be covered. whether insurers originally expected policies their CGL to cover important costs, CERCLA-like what is court that this Edgerton specifically policies in told them that their did .majority, by overturning not cover these costs. The Edgerton today, expectations, defeats those and frus- predictions trates the business decisions and made original reliance on and Hills. "The risk Edgerton] nullity [made assessment after becomes a if language policy of the is redefined in order to coverage beyond expand planned what was for Edgerton, insurer the contract of insurance." today's decision, Wis. at 779 n.26. As result they insurers are now at risk for liabilities did not anticipate, consequently, they which did not premiums. collect Finally, refusing

¶ 151. to adhere to stare decisis litigants precarious message in this case sends a solidity suffering adversely from our decisions. The judiciary non-prevailing litigants depends upon adjusting accepting our decisions and their behavior By overturning accordingly. precedent to- established day, repeatedly refusing past, after to do so in the they litigants court tells with the means to do so that through expostulations are served constant better challenges by acknowledging to adverse decisions than reluctantly, validity law, if of the state's even abiding persistence Now, it. and this court's due to its validity change Edgerton, newfound of heart as to the finally gotten way. has its Johnson Controls ¶ decisis, "courts adherence to stare 152. Without they just making any 'law1; would be would not be resolving particular dispute Antonin before them." Sys in a Scalia, Courts Civil-Law "Common-Law Federal Courts in The Role of United States tem: Interpreting Laws", in A Matter the Constitution and (1997). Interpretation, and the Law 7 Federal Courts dispute before this court is If the resolution of each open merely perseverance on the to reassessment based grace litigants court, and the of the the founda of the judiciary impartial crumbles, and our beacon tion of an judicial light reflection, an erratic with no becomes discernible course. justifications majority does offer some 153. majority disregarding stare decisis. The first con- destroys in that our decision Hills undercuts and

cludes Edgerton, such that the two cannot be the rationale of Interestingly, Majority op., ¶¶ reconciled. 102-05.9 recognizes that the two decisions Hills decision itself plane: on the intellectual can co-exist same being sought by Arrowhead [T]he nature of the relief in sought by Edgerton. different than that the DNR We Casualty's reject assertion therefore General that we must overrule order to hold "damages." Edger- that the suit this case seeks receipt proposition ton continues stand for the to. requesting party the EPA or DNR letter from propose plan a remediation does not constitute a "suit seeking damages." added). (emphasis despite

Hills, Yet, at majority rationale, asserts: "Hills did not this sought changes conclude that the nature of the relief Edgerton, do remove or limit the force of we "[I]f we not Majority op., must remove or limit the force of Hills." bringing identity party the action. on the based merely opinion EPA, concluded that the DNR and The recovery parties action, in are when a CERCLA cost Majority parties." op., from other somehow different dispositive ¶ not, in was as the 107. The factor Hills identity majority suggests, parties; rather, it the of the sought posture party type and the the was "the of relief seeking Corp. v. FM Amcast Indus. Affiliated relief." (Ct. App. Co., 145, 160, 584 N.W.2d218 Ins. Wis.2d 1998) (emphasis original). in fact, In on definition of 154. Hills relied the by Edgerton:

"damages" adopted "Thus, Shorewood and applied and in under the definition set forth Shorewood Edgerton, seeking 'damages' from Arrowhead is and policies in the at Hills as that word is used insurance applying Hills, Then this issue." 209 Wis. 2d at 181. govern- definition, concluded that while the same Hills Edgerton fall in did not within this mental action damages, it did. Id. at definition of the action before Therefore, the difference result between 180-81. logically Edgerton incon- and Hills is not one based on rationales, but rather a factual distinction based sistent underlying reasoning. upon Id. the same majority The identifies its own inconsis- 155. tency of the derivative it focuses on the nature because liability giving and the results rise to CERCLA conduct the nature of the action case, in each rather than on coverage. policy The distinc- which the insured seeks majority Edgerton not, is as the tion between Hills fortuity the asserts, "the of whether insured based on by gov- manner had ever been contacted some Majority op., ¶ Rather, this distinction ernment." type of relief centers on Hills' conclusion that sought by type party different than the a third sought by government proceed- relief in CERCLA ings. Hills, 209 Wis. 2d at 182. only Edgerton

¶ 156. There is conflict between majority has and Hills because the eviscerated underlying Edgerton rationale then focused on Although Edgerton reached in the result both cases. appears adopts if inconsistent with Hills one majority's "damages" context, view of in the CERCLA point. point that is not the is that employed Hills were consistent under rationale the court when those decisions were rendered. es- majority disagrees logic, Edgerton's sence, the with argument, judges concludes it has the better and then the continued co-existence of the two cases retro- paradigm spectively applying them. its new to This is justifiable refusing prece- a not basis to adhere to dent.

¶ the 157. To further widen artificial intellectual Edgerton majority points Hills, chasm between the Edgerton to the fact that the court did not take into expectations insured, account the reasonable of the Majority op., the However, while taking Hills court did. 104. expectations into account the reasonable of the construing language insured when the of an insurance policy ipso construing policy does not facto mean to pro-insured bear a result. contract,

In the case of an insurance the words are to be principle construed in accordance with the that the test person position is . .. what a reasonable in the of the insured would have understood the words to mean. ambiguity Whatever exists in a contract of insurance is resolved in favor of the insured... . However, policy

. . . when the terms of the are unam- face, biguous plain policy on their should not be agreed not to include insurance rewritten paid. not which it was and for parties Cos., 170 Wis. Ins. v. Wausau Shorewood Sch. Dist. of (internal (1992) citations 347, 367, 488 N.W.2d 2d omitted). having Shorewood, deter- in The court " '[damages' in these insurance as used

mined that damagest,]" legal unambiguously id. at policies means phrase construing Edgerton the same court 368, the expectation required reasonable discern the was not they language precise were insured, as the of the already interpreting to be unam- determined had been "[A]n recognized this: biguous. itself may expectations in contra- satisfied not be insured's clearly language policy identifies which diction to Edgerton, coverage." scope of the insured's Edgerton was context of fact that the The mere at 780. does of Shorewood context the factual different than phrase: reinterpretation justify not reexamine deter- not bound to courts are [A]ppellate with each policy in an insurance phrase mination of a difficulty comes . . . When differing fact situation. particular phrase to a meaning of plain applying unambiguous provision situation, an otherwise fact it is difficult simply because ambiguous made not case. particular of a apply to the facts 334-35, Coombs, Quinlan 1981). (Ct. App. a rule or fact that Thus, N.W.2d questions may generate in the interpretation hard majority op., future, ¶ 109, see is not a reason to firmly abandon that rule once it has been rooted this jurisprudence.10 state's majority suggests 159. next that stare de-

cisis need not be followed in this case because provide consistency has failed to "suitable direction and Majority op., ¶ to this area of the law." However, majority's determination that a PRP letter is a equivalent" "functional aof "suit" such that "insurers duty a have to defend an insured who a receives PRP equivalent agency letter from the EPA or an state seeking major- remediation or remediation [,]" costs . . . ity op., purporting bright 92, while to a line establish adequately rule, fails rationalize under what circum- trigger duty stances PRP letter will to defend. ¶ 160. Not all PRP letters contain a demand for pecuniary Edgerton, remuneration. 184 Wis. 2d at 775 (noting that the letters from the EPA and DNR in that merely sought voluntary case information and asked for compliance). Are all PRP letters to be considered a recipient merely provides "suit"? If a of a PRP letter voluntarily, information, or does act what is there to against? precise language defend What in a PRP letter necessary posture? to assume a sufficient adversarial provide simply anMust insurer a "defense" because a PRP letter has been received an insured, without any regard requests contents, tenor, contained any, permit What, therein? if circumstances would an insurer defend, to refuse to once a PRP letter has been being insured, received an without liable for bad important] "[It is ability— that we retain [and] our . . . public ability confidence our adopt new prin —sometimes ciples for the abandoning resolution of new issues without clear holdings past of the principles Quill those contradict." (citation omitted). Corp., 504 atU.S 320-21 leaves unan- A rule that of contract?11 faith breach hardly questions many significant be can so swered logical promoting re- consistent as characterized sults. provide Conversely, Edgerton suitable did ¶ 161. " consistency regard: de- 'Suit' in this

direction equiva- proceedings, a 'functional not court equivalent "functional suit"; of a it contracted to be defended from "suits."

¶ majority sum, 162. I dissent because the important failed to consider several reliance interests that further buttress adherence to stare decisis in this any majority's Further, context. I do not find of the departing reasons for from stare decisis in this case to persuasive. Finally, regardless be of who has the better argument meaning "damages" as to the in a CGL policy in the context of I CERCLA, do not believe that Edgerton upon fundamentally and Hills were based different rationales, such that their continued co- impossible existence is to reconcile. opinion For reasons, 163. these I am of the justification

there is no need or to overrule today; compelled therefore, I am to dissent. I am authorized to state that Justice ANN joins

WALSH BRADLEY this dissent. notes not. When a or there is there is suit . . . Either lent.' Edgerton, duty to defend." is no suit, no there there is rule, workable clear, a 2d at 781. This was unambiguous legal has upon definition, which an based previ- Furthermore, this produced results. consistent commonsense, was based on of "suit" ous construction understanding everyday Controls the term. Johnson expansive an give to many courts willingness The difficulties presented practical has to "suit" interpretation duty governed the that have rules applying in traditional in such states. to defend may to be a "suit" does he deemed that a PRP letter The mere fact actual As with automatically require an insurer to defend. not must be com- lawsuits, allegations claims forth these set policy whether there to determine pared against insurer's coverage. any potential for triggers PRP letter Unfortunately, of whether a the determination that such notices the fact duty more difficult to defend is made typically allegations are rarely factual contain substantive growing Although a pollution occurred. as to when or how silent facts, both extrinsic permit consideration of number of states defend, many to duty states continue to refute a create and to beyond may not look insurer view that an to the traditional adhere considering complaint underlying "four corners" of duty defend. it has a whether Coverage of Insurance al., and Practice et Law David L. Leitner (2001). Claims 44.3, Pollution Duty § Litigation Defend did not contract to be defended when it faced the

Case Details

Case Name: Johnson Controls, Inc. v. Employers Insurance of Wausau

Court Name: Wisconsin Supreme Court

Date Published: Jul 11, 2003

Citation: 665 N.W.2d 257

Docket Number: 01-1193

Court Abbreviation: Wis.