In its recent decision in Travelers Cas. & Sur. Co. v. Ala. Gas Corp., 2012 Ala. LEXIS 174 (Ala. Dec. 28, 2012), the Supreme Court of Alabama addressed for the first time whether a PRP letter from the EPA qualifies as a “suit” for the purpose of triggering a duty to defend under a general liability policy.
The issue was certified by the United States District Court for the Northern District of Alabama, which presented the Supreme Court of Alabama with the following question:
Under Alabama law, is a 'Potentially Responsible Party' ('PRP') letter from the Environmental Protection Agency ('EPA'), in accordance with the Comprehensive Environmental Response Compensation and Liability Act ('CERCLA') provisions, sufficient to satisfy the 'suit' requirement under a liability policy of insurance?
The insured sought coverage under some forty years of general liability coverage issued during the 1940s through the 1980s. The policies required the insurers to defend any suit alleging “injury, death, damage, or destruction and seeking damages on account thereof, even if such suit is groundless, false, or fraudulent.” In October 2008, the insured received an informational request from the EPA. The insurers took the position that the request for information did not rise to the level of a claim or suit triggering coverage under the policies...
