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Teck Metals, Ltd. v. Certain Underwriters at Lloyd's, London

Citation: 40 ELR 20228
No. No. 05-411, (E.D. Wash., 08/10/2010)

A district court held that response costs a Canadian zinc producer incurred pursuant to a settlement agreement with EPA constitute "damages" under its insurance policies. Although the remedial investigation and feasibility study (RI/FS) is not being conducted pursuant to an order from EPA, it is nonetheless being carried out consistent with CERCLA's national contingency plan. Therefore, the costs of the RI/FS are being paid as the result of action taken under CERCLA. Moreover, the EPA settlement agreement represents a compromise of a CERCLA liability property damage claim. The sums that the producer has obligated itself to pay in settlement of that claim constitute "damages" pursuant to the language of the policies. In addition, the payment of RI/FS costs represents settlement of a claim in itself rather than expenses incurred in the process of settling a claim.