July 18, 2017

Jenner & Block won another victory for Olin Corp in a long-running dispute with its insurers over coverage of Olin’s environmental cleanup costs at numerous manufacturing sites located around the country.  At issue in this latest chapter of Olin Corp. v. OneBeacon American Insurance Co. was whether Olin’s payments toward remediating contamination at five sites in New York, New Jersey, Ohio, Georgia and Alabama were covered by the excess insurance policies issued by OneBeacon American Insurance Co.  In 2013, Olin prevailed in a six-week jury trial against OneBeacon in the Southern District of New York, which resulted in a judgment against OneBeacon of more than $87 million.  OneBeacon appealed to the Second Circuit.  While the case was on appeal, the New York Court of Appeals issued a seminal decision called Viking Pump, which held that, in certain circumstances, a policyholder can apply an “all sums” method of allocation, meaning that it can recover from a single insurer all of the costs related to the covered property damage – including costs both before and after the policy period – up to the policy limits.  In supplemental briefing to the Second Circuit, Olin argued that the Viking Pump decision required the application of an all sums allocation in Olin’s case, which would have the effect of substantially increasing the judgment.  The Second Circuit agreed, and held that Olin was entitled to coverage under OneBeacon’s policies, and was entitled to recover both its pre- and post-policy-period costs under an all-sums allocation, subject to offsetting from that amount any payments Olin had already received for those specific sites under prior insurance policies.  The Court also affirmed Olin’s right to recover prejudgment interest on its covered costs.  The Court remanded the case to the district court for further proceedings to adjust the amount of the judgment, consistent with the Viking Pump decision.         

The team representing Olin was led by Partner Craig C. Martin and included Partners Peter J. Brennan, Matthew J. Thomas, Brian S. Scarbrough, and Matthew E. Price; Special Counsel Clifford W. Berlow; and Associates Briana T. Sprick Schuster and Elpitha Betondo.  Partners Matthew L. Jacobs and Adam G. Unikowsky also provided invaluable support in preparing for the oral argument.