The Road Ahead: 2015 Insurance Case Watch

Happy New Year! For a sneak peek at the developments the year may bring to the legal landscape for insurance policyholders, here are five cases worth watching in 2015:

  1. Fluor Corporation v. Superior Court (Hartford Accident and Indemnity Company), No. S205889 (Cal. filed Oct. 10, 2012)

The California Supreme Court likely will issue its long-awaited decision in Fluor and, in doing so, may overturn its controversial 2003 decision concerning the assignment of insurance policies to successor corporations in Henkel Corporation v. Hartford Accident and Indemnity Company, 29 Cal. 4th 934 (2003). If the Court overturns Henkel,California would join the majority of states that permit a successor corporation to recover under the predecessor’s liability insurance policies for pre-assignment liabilities, regardless of a “no-assignment” provision in the policies. The Fluor case has been fully briefed for more than a year, and many California attorneys expected the Court to issue its decision in 2014. In the interim, California Governor Jerry Brown has recently appointed two new justices to the Court, which some commentators believe may push the court in a more liberal direction and could affect the Court’s decision.  

  1. Ash Grove Cement Company v. Liberty Mutual Insurance Company, Nos. 13-35900, 13-35905, 14-35298 (9th Cir. filed Sept. 25, 2013)

An exciting case before the Ninth Circuit that could have far-reaching effects is Ash Grove Cement Company v. Liberty Mutual Insurance Company. The Oregon district court held that a CERCLA 104(e) administrative request from the EPA triggered the duty to defend under a commercial general liability policy. Orrick submitted to the Court an amicus brief on behalf of United Policyholders—a non-profit organization representing policyholders—and other amici, urging the Court to affirm the district court’s decision. State courts remain divided on whether such requests give rise to a duty to defend “suits” under standard-form policy language.

  1. In re Deepwater Horizon, No. 13-0670 (Tex. filed Aug. 29, 2013), certified questions from No. 12-30230 (5th Cir. filed Mar. 5, 2012)

The Texas Supreme Court likely will issue its answer to two questions certified by the Fifth Circuit concerning insurance coverage for BP’s pollution-related liabilities arising from the 2010 Deepwater Horizon incident. The Fifth Circuit has asked for clarification on Texas law as to whether BP can tap a policy held by Transocean, the offshore drilling company that owned and operated the Deepwater Horizon rig under contract to BP, as an additional insured, and whether Texas law should recognize a sophisticated insured exception to the judicial rule that ambiguous policy language is interpreted in favor of the policyholder.

  1. Zurich American Insurance Company v. Sony Corporation of America, No. 651982/2011 (N.Y. App. Div. filed Apr. 9, 2014)

The New York appellate division will be asked to review a ruling that commercial general liability policies do not cover privacy claims filed in the wake of a data breach. The lower court found that Zurich American Insurance Company and Mitsui Sumitomo Insurance Company of America did not have a duty to defend class action lawsuits arising from 2011 criminal cyber-attacks on the Sony PlayStation Network platform. The class actions asserted violations of privacy rights due to the alleged disclosure of confidential user data. The lower court found that there was no duty to defend because the alleged publication of information was perpetrated by the hackers rather than by the policyholder.

  1. PHL Variable Insurance Company v. Bank of Utah, No. 14-1210 (8th Cir. filed Jan. 29, 2014)

The Eighth Circuit has accepted an important case from the Minnesota district court regarding the life settlements market. The Court will consider several issues related to the circumstances under which life insurance policies can be validly procured by individuals and later assigned to third parties.