The Ninth Circuit held that the insurers' duty to defend did not cease after the insured submitted its response to the EPA in a section 104 (e) letter. Ash Grove Cement Co. v. Liberty Mut. Ins. Co., 2016 U.S. App. LEXIS 8663 (9th Cir. May 11, 2016).
Ash Grove operated two cement plants along the Willamette River within the Portland Harbor Superfund Site. In 2008, Ash Grove received an information request from the EPA pursuant to section 104 (e) of the Comprehensive Environmental Response, Compensation, and Liability Act.
Ash Grove sued its insurers in 2009, seeking a declaratory judgment that they had a duty to defend and indemnify Ash Grove for certain expenses it incurred related to the 104 (e) letter. The district court held that the insurers had a duty to defend.
On appeal, the insurers argued that the 104 (e) letter was not a "suit" under Oregon law. The Ninth Circuit had held in Anderson Bros., Inc. v. St. Paul Fire & Marine Ins. Co., 729 F.3d 923 (9th Cir. 2013), that a 104 (e) letter was a coercive information demand that was an attempt to gain an end through legal process. Therefore, the letter initiated a suit under Oregon law.
The insurers further argued that even if the 104 (e) letter was a suit, their duty to defend ceased after Ash Grove submitted its response to the letter. But Oregon law provided that the duty "continues as to each unit of property until the Record of Decision for that unit is filed."
Finally, the insurers argued that, if the 104 (e) letter was a suit, the district court erred in holding that Oregon law did not require a formal tender of a claim before the duty began. Oregon law, however, held that the duty is triggered by n0tice of the claim.