Port of Port Angeles to sue insurance carriers over environmental projects
Port of Port Angeles commissioners are suing insurance carriers over three environmental cleanup projects that will cost tens of millions of dollars to complete.
Commissioners Jim Hallett, John Calhoun and Colleen McAleer voted Tuesday to sue the carriers over the projects, in which the port has been identified as a potentially liable party.
The projects involve environmental cleanup of western Port Angeles Harbor near Tumwater Creek, cleanup of the former Peninsula Plywood mill site on Marine Drive just west of downtown and the planned marine trades area next to Peninsula Plywood, Calhoun said.
Hallett and McAleer refused to comment on why they voted to file the lawsuit, which could end up with the port paying the attorney fees of the lawyer commissioners hired, Mark Nadler of Seattle.
Calhoun made the motion to file the legal action following a 70-minute executive session.
“It’s tens of millions of dollars for all three cleanups,” he said Wednesday.
“What the lawsuit does is, it accelerates the timeline for settling between the insurance carriers and the port on what their responsibility is to pay for the cleanup actions that we were protected against in those policies back in the ’70s and ’80s.
“This is good news for the community and the environment.
“It will accelerate our financial ability to effect cleanup of sites we are involved in.
“There’s lots at stake.”
The legal action is aimed at recovering what port commissioners believed they were purchasing as part of the insurance policies, “which is indemnity against liability,” Calhoun said.
Nadler is in the environmental law firm Nadler Law Group of Seattle.
He did not return calls for comment Tuesday and Wednesday.
Where the lawsuit will be filed has not been determined, Calhoun said, adding that he did not know the names of the insurance carriers.
Calhoun, McAleer and Hallett said commissioners had designated port attorney Simon Barnhart as a spokesman for the case.
Barnhart would not comment on the carriers’ identities or whether a claim had been filed by the port with an insurance carrier that was not honored by the insurance companies.
“All information related to the lawsuit will be made clear in the court filings when they file,” Barnhart said Wednesday.
“So we don’t compromise our position, I can’t comment in any kind of detail.”
The first pleadings in the case will be filed “within the next couple of weeks,” Barnhart added.
Who pays the port’s legal costs — the port or the port’s insurance — will be determined during the course of the litigation, Barnhart said.
“Costs are matters to be ironed out over time,” he said.
Nadler’s billable rate is $245-$295 an hour, said Karen Goschen, port deputy executive director-finance director.
The state Department of Ecology has identified the port as being partially responsible for removing potentially harmful substances from the sites.
For example, Ecology conducted a pollution study between 2008 and 2012 that found “multiple types of pollutants in the Port Angeles Harbor sediments,” according to a staff report to port commissioners.
In the case of Port Angeles Harbor, Ecology also named the city of Port Angeles, Georgia-Pacific LLC, Nippon Paper Industries USA and forest services company Merrill & Ring as at least partially responsible for removing potentially harmful substances.
Insurance companies are more willing to cover costs involved in defending clients against claims than to cover cleanup costs that address pollution that stretches back in history, as pollution at the three sites does, Calhoun said.
But the port has policies in force that were signed in the 1980s that commissioners say protect the port from indemnity, Calhoun said.
City Manager Dan McKeen acknowledged Tuesday that insurance companies have stopped providing coverage of the kind that would cover historical cleanup costs.
But the city has not encountered a problem with its insurance carrier similar to the port’s.
“We have been billing our insurance companies, and they have been paying many of the expenses we have been incurring for consultants and attorneys related to the remedial investigation and feasibility study that the city is required to do,” McKeen said.
“We have had good cooperation from our insurance companies and expect that to continue.”