McGinnes Indus. Maint. Corp. v. Phoenix Ins. Co. (Opinion)Annotate this Case
McGinnes Industrial Waste Corporation dumped pulp and paper mill waste sludge into disposal pits near the San Jacinto River in Pasadena, Texas (the site). After environmental contamination was discovered at the site, the Environmental Protection Agency (EPA) instituted superfund cleanup proceedings under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). During the period that McGinnes was dumping waste at the Site, it was covered by standard-form commercial general liability (CGL) insurance policies issued by Phoenix Insurance Company and Travelers Indemnity Company (together, the Insurers). McGinnes requested a defense in the EPA proceedings from the Insurers. The Insurers refused, determining that the proceedings were not a “suit” under the policy. McGinnes sued the insurers in federal court seeking a declaration that the policies obligated them to defend the EPA’s CERCLA proceedings. The district court granted the Insurers’ motion for partial summary judgment on the duty-to-defend issue. The U.S. Court of Appeals for the Fifth Circuit certified a question regarding the issue to the Texas Supreme Court. The Supreme Court answered that “suit” in the CGL policies at issue must also include CERCLA enforcement proceedings by the EPA.