Marten Law: Virginia Supreme Court to Decide Insurance Coverage for Climate Change Suits--AES Corp. v. Steadfast Insurance Co.

Marten Law: Virginia Supreme Court to Decide Insurance Coverage for Climate Change Suits--AES Corp. v. Steadfast Insurance Co.

Steven Jones   By Steven Jones, Partner, Marten Law PLLC

"The Supreme Court of Virginia will soon decide whether a claim for damages alleged to have resulted from climate change is a covered 'occurrence' under standard general liability policies," writes Steven Jones. "The case, AES Corp. v. Steadfast Insurance Co. (AES), is one of first impression and is being closely followed by both insurers and insureds."

"AES Corporation, an energy company, is a defendant in a highly publicized climate change nuisance case called Native Village of Kivalina v. ExxonMobil Corp. (Kivalina). After being sued, AES tendered the claim to its insurer, Steadfast Insurance Company (Steadfast). The claim was denied, and, thereafter, Steadfast filed an action for declaratory judgment in Virginia (where AES is headquartered)," explains the author. "The trial court granted summary judgment for Steadfast, holding that Steadfast had no duty to defend AES because the allegations in the Kivalina complaint did not constitute an 'occurrence' within the meaning of the general liability policies that Steadfast had sold to AES. AES appealed to the Virginia Supreme Court, which heard oral argument on April 19, 2011."

"A threshold question under CGL policies is whether claimed property damage was caused by an occurrence, typically defined as 'an accident, including continuous or repeated exposure to substantially the same general harmful conditions.' For policy holders such as AES, who were sued for allegedly causing third-party damage for emission of GHGs," notes Jones "the argument would be that the damage alleged in the plaintiffs' complaint was 'unexpected and unintended' by the insured, even though the insured was generally aware of the emissions and the potential effect the GHG emissions might have on the plaintiff."

Steven Jones, a partner with Marten Law PLLC, is the chair of the firm's litigation department. He has handled complex environmental and land use litigation for both public and private clients for 15 years. Steve has particular expertise in litigation arising under CERCLA, the Clean Water Act, the Federal Torts Claim Act, and representing clients in litigation involving climate change, solid waste and nuisance issues. He also has extensive experience litigating land use issues under both SEPA and Washington's Growth Management Act. Steve has handled cases before all levels of the state and federal courts, along with administrative litigation before Washington's Pollution Control Hearings Board, the Growth Management Hearings Boards and Washington's Utilities and Transportation Commission. Steve also writes and speaks frequently on environmental and land use issues and has contributed chapters to both the AWB Environmental Compliance Handbook and WSBA Real Property Deskbook. He is the editor of the ABA's Superfund and NRD Litigation Committee Newsletter.

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Case Law Resources -

Lexis.com subscribers can access the Lexis enhanced version of Steadfast Ins. Co. v. AES Corp., 2010 Va. Cir. LEXIS 35 (Va. Cir. Ct. Feb. 5, 2010) with Shepard's.

Lexis.com subscribers can access the Lexis enhanced version of Native Village of Kivalina v. Exxon Mobil Corp., 663 F. Supp. 2d 863 (N.D. Cal. 2009) with summary, headnotes, and Shepard's.

Lexis.com subscribers can obtain all of the briefs filed in the United States Supreme Court in Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 813.

Lexis.com subscribers can access the Transcript of oral arguments in United States Supreme Court in Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 813.

Lexis.com subscribers can access the Lexis enhanced version of Connecticut v. Am. Elec. Power Co., 582 F.3d 309 (2d Cir. N.Y. 2009) with summary, headnotes, and Shepard's.

Lexis.com subscribers can access the Lexis enhanced version of Conn. v. Am. Elec. Power Co., 406 F. Supp. 2d 265 (S.D.N.Y. 2005) with summary, headnotes, and Shepard's.

Also available to lexis.com subscribers -

Climate Change Litigation, 3-17C Environmental Law Practice Guide 17C.10 (Matthew Bender).

Climate Change and Global Warming-Climate Change Litigation, 2-1A Treatise on Environmental Law 1A.13 (Matthew Bender).

Beginning Official Recognition of the Phenomenon of Global Warming, 2-1A Treatise on Environmental Law § 1A.02 (Matthew Bender).

Insurance Coverage for Environmental Claims (Matthew Bender):

General Liability Insurance - Occurrence

General Liability Insurance - Pollution Exclusion

Special Climate Change Alert: Insurance Law for Climate Related Claims

Climate Change and Insurance: Climate-Related Insurance Claims

More Full Text Emerging Issues Analysis Related to Environmental Law.

Related Resources:

Emerging Issues Analysis on the LexisNexis Environmental Law & Climate Change Community -

Marten Law: Republican Lawmakers Join Obama Administration in Urging Supreme Court to Overrule GHG Nuisance Case.

Marten Law: Proposed Legislation Seeking to Block EPA Greenhouse Gas Regulation Picks Up Speed.

Marten Law: Solicitor General Sides With Utilities, Asking Supreme Court to Block Common Law Climate Change Lawsuit.

Marten Law Group: Second Circuit Allows Federal Nuisance Claims for Global Warming to Proceed.

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