Travelers Casualty & Surety Co. v. Providence Washington Ins

Jul 12: In the U.S. Court of Appeals, First Circuit, No. 11-2193. Appealed from the District Court of Rhode Island, Providence. In summarizing the case the Appeals Court indicates that, invoking diversity jurisdiction, appellant Travelers Casualty and Surety Company, Inc. (Travelers) sought a declaratory judgment that appellee Providence Washington Insurance Company, Inc. (PWIC) is obliged to join in the defense of New England Container Company, Inc. (NE Container or NECC), in connection with a contribution action involving clean-up costs for the Rhode Island Centredale Manor Superfund Site. Granting summary judgment to PWIC, the district court ruled that PWIC did not owe NE Container a duty to defend in the underlying action. The Appeals Court ruled, "On Travelers' appeal, we reverse the decision, vacate the judgment, and remand."

 

    The Appeals Court concludes, "In the end, we conclude that under the pleadings test, the Emhart complaint [Emhart Industries, Inc. also a responsible party] triggered PWIC's duty to defend under its policies issued in the mid-1980s. In so holding, we recognize that there is exponentially more to this sprawling litigation than the Emhart complaint and the PWIC policies. Litigation involving environmental damage at the Superfund Site was well on its way prior to the 2006 Emhart action, and the Emhart action had advanced beyond a nascent stage by the time Travelers pursued its 2010 action against PWIC. The duty to defend question before us, however, begins and ends with the Rhode Island pleadings test. Having concluded this task, our review is complete.

 

    "We reverse the district court's decision, vacate the judgment in favor of PWIC, and remand for the district court to enter judgment in favor of Travelers that the Emhart complaint triggered PWIC's defense obligations under its policies. Any remaining requests for relief sought by Travelers will be addressed by the district court in due course."

 

    Access the complete opinion (click here). [#Haz, #Remed, #CA1]

 

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Kansas Gas & Electric Co. v. U.S.

Jul 12: In the U.S. Court of Appeals, Federal Circuit, Case Nos. 2011-5044, 2011-5045. Appealed from the United States Court of Federal Claims. In this partially mixed opinion, Kansas Gas and Electric Company (KG&E), Kansas City Power & Light Company (KCPL), and Kansas Electric Power Cooperative, Inc. (KEPCO) (collectively the Kansas Companies) suffered damages due to the Government's partial breach of the Standard Contract for Disposal of Spent Nuclear Fuel And/Or High-Level Radioactive Waste (Standard Contract). In June 2010, the United States Court of Federal Claims conducted a nine-day trial and awarded the Kansas Companies $10,632,454.83.

 

    The majority indicated, "In determining the amount of damages, the trial court correctly did not award damages for cost of capital and for the costs associated with researching alternative storage options for spent nuclear fuel (SNF) and high level radioactive waste (HLW). The trial court also appropriately reduced the Kansas Companies' damages by the value of the benefit they received as a result of their mitigation activities. However, the trial court erred by not accepting the Kansas Companies' reasonable method for calculating overhead costs. Therefore, this court affirms-in-part and reverses-in-part the trial court's damages award."

 

    The majority court ruled, "The Kansas Companies' method for calculating over-head costs was reasonable and complied with FERC accounting standards. As such, this court reverses the trial court's refusal to accept these calculations. This court affirms the remainder of the trial court's decision. As such, there is no need to address the issues raised in the Government's cross-appeal."

 

    In a partial dissent, one Justice indicated, "The majority concludes that when the Kansas Companies used Federal Energy Regulatory Commission (FERC)-compliant accounting practices to allocate overhead to their mitigation efforts, they were dispositively entitled to recover the full amount of that overhead as damages. I respectfully disagree. When, as here, a trial court is presented with evidence that regulatory accounting practices were used to calculate the amount of overhead attributable to mitigation projects, that amount is presumptively a correct measure of damages for over-head. And our precedent firmly establishes that a trial court is not free to disregard it simply because it questions the precision of the accepted accounting practice."

 

    Access the complete opinion (click here). [#Haz/Nuclear, #CAFed]

 

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