On August 9, 2012, the California Supreme Court handed down its much anticipated decision in State of California v. Continental Ins. Co. The California Supreme Court held that the “all sums” method of allocation applies in California and that an insured can horizontally stack all successively triggered policies in an environmental property damage case involving a single occurrence causing continuous and progressive contamination throughout multiple policy years.

Therefore, a liability insurer is obligated to pay all sums the insured become obligated to pay for property damage attributable to a contaminated site up to policy limits as long as some of the continuous property damage occurred while that particular insurer’s policy was on the loss.  An insurer cannot limit its liability to just the amount of loss that occurred during its particular policy period.  The Supreme Court also concluded that absent specific “anti-stacking” policy language, an insured is entitled to “stack” the consecutive policy limits of each successively triggered policy to recover the limits of all policies on the risk for the loss.

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Litigation Update – Fifth and Second Circuits Reverse Dismissal of Private Party Climate Change Lawsuits

Environmental Litigation

Twice in recent months, federal appeals courts have opened the door to climate change damage claims by private parties against companies that contribute to global warming.

On October 16, 2009, the Fifth Circuit Court of Appeals in Comer, et al. v. Murphy Oil USA, et al. held that residents and owners of lands and property along Mississippi Gulf Coast could assert damage claims from Hurricane Katrina against various oil, energy and chemical companies. The plaintiffs alleged the defendants’ operations caused the emission of greenhouse gases that contributed to global warming causing a rise in sea levels and added to the ferocity of Hurricane Katrina, which combined to destroy the plaintiffs’ property. The plaintiffs seek to recover damages based on claims for public and private nuisance, trespass and negligence. The trial court granted the defendants’ motion to dismiss the action, finding that the plaintiffs lacked standing to assert their claims and that their claims presented non-justiciable political questions. The appellate court reversed the trial court, which threw out plaintiffs’’ claims and upheld their right to proceed with their claims.
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