p asserted logic and conceit that many of those costs are not covered by this policy because they are merely costs of complying with the c a a going forward and are not cost incurred to remediate existing pollution or pollution condition logic doesn't coverage for three categories of costs a capital upgrade on unit three at the facility the value of certain surrendered emissions credits and a series of mitigation projects at locations far away from the lodge and facility categories each differ and each must be considered on its own terms i'd like to therefore begin with the upgrade to unit three which is most clearly a prophylactic compliance cost without any remediate of purpose or effect how do we know that it is a compliance cost we know because the consent decree says it treats the the selective non catalytic exactly this in the same sentence it says that logic in shall install s n c are eight units one two and three there's no distinction drawn whatsoever why did you do that the reason was by reducing the emissions show that a reduction in unit three was necessary to keep those overall emissions below what it absent the s n c are on unit three the overall emissions would have been almost ten thousand tons of  nitric oxide where has the part of the permit reflected in the consent decree said that after two thousand and fifteen going forward the overall missions had to be limited to just the almost nine thousand tonnes of not just oxide so in order to obtain permit the district court itself even implicitly recognised that it was a compliance measure not remediation just a court said well it was a trade off instead of full compliance in the court just lead to conclusion and said but that doesn't make it compliance measure well of course it does that's exactly what was going on instead of getting the full reductions that units one and two they traded off fewer reductions their units wanted to where they were the units originally alleged to have inadequate technology on them and in order to obtain an agreement with the e p a the pain compliance with the new emissions level they agreed lodge and agreed to install s and c r in addition not only on one and two but also on units three thousand tonnes in two thousand and one that were out there that had been emitted and need to be offset or mediated because nobody is now this is not about mediating a thousand tonnes this is about a permanent change to unit three that will forever  ensure this reduction in order to comply with the new emissions limit you've used the word remediate quite a few times but the policy speaks of mitigating the bait as well as remediate that's correct the that's part of the definition of remediation condition so it's has to be something that exists in the past not upgrading your facility adopting new technology building a new factory to have lower emissions in the future you will not find and i hope the court asks my opposing coun that much i can i can tell you this is a very common policy that was adopted for very specific reasons which were basically twofold there's a pollution exclusion written into c g l policies starting in the seventy's and the in the eight increase the price of a c d o policy for somebody who's just a running a distribution center something and this allowed somebody who was a mentor to actually attain cover to that increase in geneseo policies that's what a pollution liability policy is doing the other thing it doesn't solve the problem under all policies they cover damages from an occurrence and there's a huge debate and still out there as to whether or not response costs constitute damages for an occurrence that's what this policy and others like it solves for they say that it does cover  mediation costs but by covering remediation costs nothing that suggests that any change from the classic insurance proposition that you don't insure technological changes in order to insure to prevent future  and you do something to deal with the existing pollution you you put up you might put up a barrier if it's on the land and it threatens to x you know spread further you would be mitigating it by putting that barrier there that w true stop future pollution but you're stopping future pollution of existing pollution what you don't see and what he says would be beyond the line and you don't see coverage of is a technological change that exists for the sole purpose of preventing future pollutants  deals with nitric oxide there is admitted in the past and so to the extent that you do something if you can identify some kind of remedy that deals with nitric oxide or any other kind of air pollution that might be some air pollution that hovers or creates an immediate problem in the immediate that has to be dealt with right away while it's still there sure that pollution policy would cover that and deal with solving that problem it doesn't deal with the technological change designed to prevent that problem from occurring in the future by upgrading  facility and preventing those future missions insurance policies are about dealing with existing problems not future problems now they could there's two other categories which are far different that's not to say they're not covered but they are different from the easiest category which is the s and c are the second one is the emissions credit credits and our submission is those are also a form of compliance because they were surrendered in order to have jane in agreement with the e p a to of existing pollution that's out there and here i think the synergy three court case from the immediate court in indiana is the best example where the court's pacifically addressed admissions credits from the exact same program e p a program that was involved here a obtained admissions credits from that emitter and the court in that case that they're not covered because they're so only forward looking they deal with future emissions they don't do anything to deal with past emissions which which is what pollution liability policies are all about  and so that's our submission on that i will say they were different from the s n c are because they're not as direct a compliance measure in the same way and they were referred to in this prior decision by the e p a as at least referred to as in mitigation measure obtains a specific remedy is that mitigation within the terms of the particular policy that's supposed to provide coverage for past pollution and the surrender of these particular credits does nothing to solve a particular past problem  of air pollution or water pollution of ground pollution is doing but when you're but here we're talking about a surrender of emissions credits for the emission of nitric oxide and sulfur dioxide that's never occurred it has not occurred that's what this is all about this doesn't do anything to deal with these in theory are the kind of remedy that they're not compliance by any stretch because they don't have a to do with the current emissions levels in future missions levels of the facility so they could be considered remediation in theory if they were actually remediating some existing air pollution or other form of pollution the problem with the environmental mitigation projects is they don't satisfy the policies geographical proximity requirement which is quite stringent what the policy covers is not just any remediation of anything it covers remediation of quote a pollution condition which is and i quote on that under a covered location or beyond the boundaries and migrated from the covered so the only kind of cost recovery remediation that deals with pollution commission on at or under a couple occasions that's not at issue here because all of the mitigation projects are off site and in many cases many miles off site so the question is has anybody shown that they are dealing with a pollution condition that migrated from the lodge and covered location and there's nobody even tried to make that showing whatsoever on their face or something that would have migrated from the location while one of them is a project fifty miles away another one is a project ten miles away its money to the forest service and the park service to do what they want to do with matters under their control the state projects are literally all over the morning your honour's john heinz of blank rome for the louisiana generating an energy let me start with the proposition that there is no existing pollution condition iou as this court previous panel determined promised to pay claims and remediation costs logjam incurred for an existing pollution condition at big quality and among the things they sought were compliance at the two units they said were out of compliance one and two and mitigation for the past excess emissions and the harm that those excess emissions caused this court at the previous panel determined that those claims for those remedial mitigate of abatement type measures would be covered if that's what the case resulted in the parties the in the underlying case disputed what compliance constituted they disputed the extent to which mitigation would be required and they reached an agreement and and they agreed to certain measures for unit it's one and two which the e p a then agreed would be in compliance if met and and those were capital upgrades and for which they gave releases of civil law liability up to the date of the consent decree and then they agreed on mitigated measures and it's very clear that in the underlying litigation had the case gone to trial e p a s expert would have presented doctors say who would have presented evidence with regard to the excess emissions he calculated and why s and c are at unit three and surrender of allowances in particular would be mitigation for those excess  missions the the so that that is the context in which this settlement is resolved the fact that  there is compliance at unit one and two and that there is now a newly agreed plant wide limit does not make the measures that didn't bring unit one into into compliance compliance that plant wide limit didn't exist before and the s c n c r yes and c r at unit three did far more then to satisfy that plant wide limitation now as to mitigation air pollution presents a a challenge and congress in adopting the clean air act recognized that total atmospheric loading well the the cost for which i'll use been found liable including defense costs are approaching forty seven million dollars and the limits were fifty million the capital inverse relationship between the clarity of language and the amount of money at issue that your honor i have done this for a long time and i would guess would observe the same thing so the point here is that having it because air pollution one emitted doesn't stay in place it's in the atmosphere it's an existing condition as the policy states about big ca but it's it you can't say that's big cajuns s o two and that's some other facilities s o two and it's it's imagine a simple example a lake where it's determined that the lake can sustain ten pounds of pollution a year and meet water quality standards and someone deposits fifteen pounds in year one and  it makes up for that by only depositing five in your two so the cumulative total after year two is back to where it would have been had they complied in both years one and two that's what these mitigation measures are  it's used in clean water you trade off the restoration of one area of rep lens as mitigation for having damaged or destroy another area  a s approach to this it does require a nexus to the pollution condition that is subject of the clean air act case it is addressing and indeed the requirements  have to have an impact on the target pollutants such as s o two and knox and mercury and the e p a has rejected first of all they specified there was agreement in the negotiations that x number of them would be done and they're defined in the agreement and then as to the remaining amounts la gente had to submit projects for approval and the e p a rejected two because they said they didn't have a sufficient nexus to the pollution condition we're requiring you to mitigate so the e p a if if these projects are approved  satisfied that the nexus to the pollutants and to the facility is sufficient they do have a a regional limitation we can't go mitigate in in making they won't approve that record shows this he calculated how much reduction in future admission from the surrender would would offset some of the past excesses certainly not all that he had calculated court to ask me whether there's a case well i would point to a district court in maryland that considered both the imposition of capital upgrades on a plant as possible mitigation for excess past emissions that's the is the west back up case and the surrender of alliances it concluded that it would be inappropriate to require the upgrade of the plant because westpac a was no longer the owner of the plant not because it wouldn't have mitigation effect or would be on the power of the court in the clean air act on the other hand it it laid out the criteria for the approval of surrender of allowances and an ordered further proceedings to address the criteria that with regard to the quantity in the nature and the term over which these allowances analytical context the possibility of requiring changes to the power plant itself but for the fact that it was no longer o by the defendant so all these measures in the clean air a c g l policies didn't cover because the pollution exclusion it's not limited to response costs it's it says abatement and mitigation which as as  your honor pointed out do have a prospect of component to it abating a public nuisance is is largely prospect of in the way it is used in the case law  and these are words of common usage these are not words of special environmental usage and they fully satisfy the broad purpose of this policy and ious specific agreement that the existing air condition pollution condition at big cage in two was a to be treated as a known condition under the policy for which there would be cover if there were claims or remediation costs that arose out of it that the prior panel clearly unequivocally determined under the plain language of the policy and this consent decree imposes with relief secured relief for the agencies that satisfy their requests for relief sunder the prayer paragraph six seven eight in the complaint which the prior panel specifically said were the ones that were triggering the do you defend and since the case ultimately it was the resolved with lodg undertaking those activities those activities are covered and the costs associated you should be paid if there are no other questions i think i've addressed counsel's arguments and i'll leave the rest thank you roger just a few points first focusing on the prior decision decision which mr reference that of course was only about the duty to defend which this court correctly described as exceedingly broad and the issue there was on the complaint as pleaded and read broadly as one must do at the complaint stage was there a possibility that the e p a ultimately could obtain some remedy unknown at the time that would be covered by the policy that's how the d to defend works and we had an argument that said given the nature of the clean air act there was no possibility that that would be true in this court disagreed and said that what everybody would recover any kind of remedy that actually remediate smitty gate s cleans up the pollution of any kind or reducing feature emissions cleaning it past excessive emissions because if there's a showing that there is a direct connection to a given past there were excess emissions because they violated the permit that's true but we're talking about a permanent change forever and ever and ever which necessarily isn't just remediating whatever a few years excess emissions  i think there there there would be a fact question except that the other side has made no showing and on the face of it the consent decree again treats the other talking just about the s n c are s and c are a unit three the same as units one and two in order to compliance for other kinds of pollution for pollution in the lake that mr hudson is example of if you see a plume of pollution and you take steps to deal with that including first of all stopping the current flow justly person's opinion energy north points o doing that kind of thing can be understood as remediation doing something else to contain the existing pollution that's remediation even though it's got that future looking at fact but if you also say you know what let's build a different factory that doesn't  this kind of thing into the water that will also reduce it in the future but there are zero insurance policies in zero ports in this country that would say that that future effect it's something that's covered that insurance policy is supposed to build you a new factory so you stop polluting the water and that's what's happening here it's not an entire new factory but it's technology and one of the main emitting a parts of the factory they're saying if you put this on the reduce in the future and the argument is because that has the effect of  in which there was one chimney that had been emitting for twenty years and that identifiable group of fifty structures in the in the neighborhood had been had  saying that improving the chimney in some way or burning a different fuel or putting a screen on top so that the pollutants don't escape would not ever be included within the heater remediation cover only the cleaning up of whatever sirte has fallen on the surrounding structures when it might also include you know sticks that there's a plume a sort out there or something stopping at the moment so that it so that it stops so you're dealing with the existing pollution might be remediating that existing pollution but doing something that deals with pollution in the future so that you change the way you do business in order to not do this thing that's it and that your district a single district court decision in maryland certainly wouldn't establish that it's covered under new york law but if this kind of remedy were covered you would see decisions you would see policies of paying for this kind of capital upgrade you don't see that and you