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Huntsman Advanced Materials LLC v. OneBeacon America Insurance Co.

United States District Court, D. Idaho

August 2, 2019

HUNTSMAN ADVANCED MATERIALS LLC, Plaintiff,
v.
ONEBEACON AMERICA INSURANCE COMPANY and SPARTA INSURANCE COMPANY, formerly known as AMERICAN EMPLOYERS' INSURANCE COMPANY, Defendant.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL U.S. DISTRICT COURT JUDGE.

         INTRODUCTION

         Pending before the Court is a motion to intervene filed by First State Insurance Company, Hartford Accident and Indemnity Company, Hartford Underwriters Insurance Company f/k/a New York Underwriters Insurance Company, Nutmeg Insurance Company, and Twin City Fire Insurance Company (collectively, Hartford). (Dkt. 190.) The motion is fully briefed and at issue. For the reasons below, the Court will grant the motion.

         BACKGROUND

         1. Factual Background

         On February 27, 2004, the U.S. Forest Service notified Huntsman Advanced Materials LLC (Huntsman) that it was a Potentially Responsible Party under CERCLA Section 107(a) (USDAFS claim). Dkt. 1. In the USDAFS claim, the Forest Service asserted that Huntsman and its predecessors at the North Maybe Phosphate Mine Site had conducted mining operations that resulted in the release or threatened release of hazardous substances or contaminates. (Dkt. 88-1.)

         Since February 23, 2010, pursuant to CERCLA Section 106(a), Huntsman has been subject to a Unilateral Administrative Order requiring it conduct a Remedial Investigation/Feasibility Study (RI/FS) of the West Ridge Operable Unit at the North Maybe Mine Site. (Dkt. 75-3.) Though it was initially anticipated that the RI/FS would be completed within two and a half years, it has taken much longer. (Dkt. 81.) The remedial investigation - conducted pursuant to statute “to collect data necessary to adequately characterize the site for the purpose of developing and evaluating effective remedial alternatives” - was completed in 2016. (See 40 C.F.R. § 300.430(d)(1); Dkt. 191 at 2.) Baseline risk assessments and the feasibility study - conducted to determine whether and what remedial action is necessary - remain ongoing. (See 40 C.F.R. § 300.430(e)(1); Dkt. 173 at 4.) At present, the targeted completion date of the feasibility study is January 2022. (Dkt 185.)

         Huntsman is the successor in interest of commercial general liability insurance policies purchased from OneBeacon American Insurance Company (OneBeacon) in the 1960s and 1970s. (Dkt. 1 at 4.) Huntsman tendered a claim to OneBeacon on January 21, 2005 seeking defense and indemnity with respect to Huntsman's environmental liabilities arising out of the USDAFS claim. (Dkt. 1 at 8.) OneBeacon denied coverage in 2007. Id. at 9. Huntsman is also the successor in interest of commercial general liability insurance policies purchased from Hartford in the 1970s and 1980s. (Dkt. 190-1 at 8.) Huntsman notified Hartford of the USDAFS claim; in 2006, Hartford denied coverage. (Dkt. 191-1 at 2.)

         2. Procedural History

         The underlying case involves an action brought May 27, 2008, by Huntsman against OneBeacon, seeking a declaratory judgment of OneBeacon's duty to defend and indemnify Huntsman with respect to Huntsman's liabilities arising out of the USDAFS Claim. (Dkt. 1.) In 2012, Hartford was brought into this action via OneBeacon's Third-Party Complaint. (Dkt. 134.) After a confidential settlement between the insurers relating solely to defense costs for the USDAFS Claim, Hartford was dismissed from this action. (Dkt. 160.)

         On February 19, 2010, Judge Downes, writing for this Court, issued a stay on all issues of indemnity in this action, pending the completion of the RI/FS. (Dkt. 81.) At that time, it was expected that the RI/FS would be completed within two and a half years and would determine whether evidence of contamination and its source existed. Id. at 6-7. However, given the long and ongoing delay in completing the RI/FS, on November 5, 2018, this Court partially lifted the stay to allow discovery with an eye toward OneBeacon filing a motion of summary judgment on the issue of liability. (Dkt. 185.)

         Hartford now seeks intervention as of right and permissive intervention. (Dkt. 190.) Huntsman opposes intervention on the grounds that Hartford's proposed counterclaim fails to present an actual case or controversy as required by the Declaratory Judgment Act and asserts the issue is thus not ripe for adjudication. (Dkt. 191.) The Court will address the merits of these arguments below.

         LEGAL STANDARD

         1. Ripe Case of ...


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