Opinion ID: 691337
Heading Depth: 2
Heading Rank: 1

Heading: Under Michigan law, a PRP letter constitutes a suit.

Text: 18 As noted, the district court determined that the issuance of the PRP letter and other actions taken by the EPA did not constitute a suit triggering Travelers' duty to defend ADC. In doing so, the district court apparently relied on the holding of this court in Ray Industries, Inc. v. Liberty Mutual Insurance Co., 974 F.2d 754 (6th Cir.1992) (interpreting Michigan law). At the time Ray Industries was decided, the Michigan Supreme Court had not ruled on the issue, and therefore, a panel of this court was required to guess as to what the law in Michigan was. Ray Industries, 974 F.2d at 758. Under substantially similar facts, the court concluded that the Michigan Supreme Court would adopt a narrow definition of the word suit and thus held that the PRP letter would not trigger an insurer's duty to defend. Id. 19 The Michigan Supreme Court, however, recently having had the opportunity to rule on this exact issue, rejected the holding of Ray Industries, and in fact held that a PRP letter issued by the EPA is the functional equivalent of a suit brought in a court of law. Michigan Millers Mut. Ins. Co. v. Bronson Plating Co., 445 Mich. 558, 519 N.W.2d 864, 870 (1994). Factually, Bronson Plating is also substantially similar to our case: The insurer brought an action against its insured seeking a declaration that it had no duty to defend or indemnify the insured with respect to EPA administrative actions (PRP letter) regarding environmental contamination of the insured's operation site. Moreover, the insurance policy provisions with respect to the insurer's duty to defend and indemnify, as well as the relevant portions of the PRP letter, were essentially identical to those in our case. The court first noted that the term suit is ambiguous and capable of application to nontraditional legal actions that are the functional equivalent of a suit brought in a court of law. Under this definition, the court concluded, a PRP letter constitutes the initiation of a suit that the insurers are obligated to defend. The court reasoned that [t]he significant authority given to the EPA in such matters allows it essentially to usurp the traditional role of a court in determining and apportioning liability, and may be viewed as coercing the voluntary participation of PRP's. Id. 519 N.W.2d at 871-72. 20 In light of the Bronson Plating decision, we reverse the district court as to the first issue and hold that the PRP letter received by ADC constituted the initiation of a suit triggering Travelers' duty to defend. 21