Opinion ID: 1506273
Heading Depth: 1
Heading Rank: 3

Heading: the cercla proceedings.

Text: The Commonwealth first sought additional funds from various federal agencies. It then vigorously and successfully sought to have Maxey Flats placed on the National Priority List (NPL) of the nation's most dangerous nuclear waste sites so as to qualify for Superfunds and possibly spread its liability to other potentially responsible parties (PRPs). See Letter from Governor Martha Layne Collins to Charles Jeter, Regional Administrator of the Environmental Protection Agency (EPA) (September 7, 1984) (Pl.Ex. 28) (The purpose of this letter is to make you aware that the Maxey Flats site is the highest priority in Kentucky for Superfund planning and budgeting for FY 1985.); Letter from T. Michael Taimi, Commissioner, Kentucky Department for Environmental Protection, to Thomas W. Devine, Director of EPA's Air and Waste Management Division (August 23, 1984) (Pl.Ex. 26) (This is to advise that the Commonwealth of Kentucky has expended serious effort to include the Maxey Flats site near Morehead, Kentucky on the next edition of the National Priority List (NPL).... [A]ssuming this site is placed on the NPL, Kentucky would like for this site to be considered as the number one priority for further investigation and feasibility.); Memorandum from Rose Marie Carr, Manager, Maxey Flats Branch, to T. Michael Taimi (January 14, 1985) (Pl.Ex. 27) (The Department has been successful in having the Maxey Flats Nuclear Waste Disposal Site placed on the Superfund list.). Placement of Maxey Flats on the NPL automatically triggered the administrative procedures required by the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601, et seq., as supplemented by the Superfund Amendments and Reauthorization Act of 1986 (SARA), Pub.L. No. 99-499, 100 Stat. 1613. On November 26, 1986, the EPA issued PRP letters to 832 entities, ultimately trimmed to approximately 600, that had owned, operated, or sent waste to Maxey Flats. H. Doyle Mills and Caroline Patrick Haight, Kentucky Department for Environmental Protection, Superfund Clean Up of a Commercial Radioactive Waste Disposal Facility in Kentucky 2. Pursuant to CERCLA, the EPA offered the PRPs the opportunity to conduct their own Remedial Investigation/Feasibility Study (RI/FS) of the site. Eighty-two (82) PRPs, including Appellees, accepted the offer, formed a steering committee, and conducted and partially funded the RI/FS. (Most of the funding was provided by the Department of Energy and the Department of Defense, which were PRPs but not members of the steering committee.) On March 27, 1987, those who had accepted the EPA's offer executed an Administrative Order By Consent, reflecting EPA's findings of fact and conclusions of law and setting forth the steering committee's RI/FS plan of action. Upon receipt of their respective PRP letters, Appellees all demanded that ANI provide them with a defense to the CERCLA proceedings. The Commonwealth's demand was particularly ironic in view of the fact that the initiation of the proceedings was a direct result of the Commonwealth's own urgent requests that Maxey Flats be placed on the NPL so as to qualify for Superfund and PRP contributions to mitigate its preexisting liability under KRS 211.898. It succeeded. Now it claims that the CERCLA administrative proceeding was a suit against which ANI was required to defend it. In effect, the Commonwealth was more a plaintiff than a defendant in the CERCLA proceedings, since its position was that of a party attempting to lay off a portion of its existing liability onto other parties. ANI denied coverage for any potential on-site clean-up or site improvement costs and declined to provide a defense to the CERCLA proceedings. (Under the any other person or organization clause of the Facility Form policy, each of the 832 original PRPs was a potential insured who, under the majority opinion's reasoning, was entitled to a defense to the administrative proceedings and indemnification for its pro rata share of the costs.) In 1991, the EPA issued a Record of Decision (ROD) that confirmed the previous study's finding that the site does not currently pose a threat to human health or the environment, but concluded that certain site measures should be undertaken because of a potential  threat to human health and the environment posed by the site in the future should these activities not be undertaken. ROD Responsiveness Summary 25 (emphasis added). The estimated cost of these measures was $33,500,000, ROD Declaration Statement 2, of which it is stipulated that 97.4% was attributable to site-improvement measures and 2.6% to clean-up measures. None of the measures included any off-site remediation or improvements. The NREPC, the other PRPs, and the federal agencies agreed on an apportionment of the cost of these measures. The NREPC and the other parties to this appeal now claim coverage under ANI's third-party liability insurance policies for the amounts they agreed to pay, claiming that the ROD was an award of damages for property damage. The majority opinion correctly notes that 42 U.S.C. § 9607(e)(1) expressly authorizes PRPs to insure against the costs of relief imposed under CERCLA. Presumably, that refers to the purchase of a policy providing first-party coverage, e.g., a Differences in Conditions (DIC), All Risks, or Casualty policy, and not a liability policy that provides only third-party coverage for damage to the property of another. As a condition of licensure as either a nuclear waste disposal facility or a nuclear waste hauler, the licensee must maintain a policy of public liability insurance. 42 U.S.C. § 2210(a). In that respect, the United States Code defines public liability as any legal liability arising out of or resulting from a nuclear incident ... except ... claims for loss of, or damage to, or loss of use of property which is located at the site of and used in connection with the licensed activity where the nuclear incident occurs.  42 U.S.C.A. § 2014(w) (emphasis added). In other words, a licensee is required to carry a policy of third-party liability insurance under 42 U.S.C. § 2210(a) and has the option of carrying a policy of first-party insurance under 42 U.S.C. § 9607(e). Since the policies at issue in this case are public liability policies, they do not provide coverage for damage to the insured site per 42 U.S.C. § 2014(w).