Opinion ID: 531012
Heading Depth: 2
Heading Rank: 1

Heading: Suit

Text: 31 We have little trouble viewing this administrative proceeding as a suit. The demand letter commences a formal proceeding against Avondale, advising it that a public authority has assumed an adversarial posture toward it, and that disregard of the DEQ's demands may result in the loss of substantial rights by Avondale. These strike us as the hallmarks of litigation, and are sufficiently adversarial to constitute a suit under New York law and within the meaning of the policy. 32 New York appears to have adopted a broad construction of the word suit. Before arbitration was included within the meaning of suit by the insurance industry, New York's highest court held that suit included arbitration, reasoning that the insurer was aware that arbitration might be directed when it wrote the policy. See Madawick Contracting Co. v. Travelers Ins. Co., 307 N.Y. 111, 119, 120 N.E.2d 520 (1954). Plainly, Travelers as an insurer was aware of the possibility of a suit regarding toxic chemicals as shown by the pollution exclusion clause it included in the policy it drafted. 33 Although the Appellate Division in Technicon held that the EPA administrative letter demand in that case was not a suit, 141 A.D.2d at 145-46, the Court of Appeals did not reach or decide the issue, 74 N.Y.2d at 76, 544 N.Y.S.2d 531, 542 N.E.2d 1048. Again, Technicon is distinguishable on this issue too. There, in the Appellate Division's own words, [t]he EPA letter ... merely informed Technicon of its potential liability under CERCLA and that the EPA was interested in discussing Technicon's voluntary participation in remedial measures. The letter was an invitation to voluntary action.... 141 A.D.2d at 146. A request to participate voluntarily in remedial measures is not the same as the adversarial posture assumed in the coercive demand letter that Avondale received in the instant case. 34 Further, common sense argues that for Travelers to proffer a defense now is better for it, Avondale, and the public interest in a prompt cleanup of the hazardous waste. A judicial proceeding--were Avondale to ignore the DEQ letter--plainly will sharply escalate the liability costs Avondale faces. Fundamental issues involved in the administrative proceeding will obviously affect the extent of contribution of the various generators of the waste. A 1987 Report of the Association of State Waste Management Officials found in the record indicates--consonant with what experience teaches--that a private remedial effort is quicker and less expensive than a government sponsored program. See Developments--Toxic Waste Litigation, 99 Harv.L.Rev. 1458, 1505 (1986).