Insurers Agree to $93M Settlement over Hazardous Waste Site in California

February 4, 2005

California has won a $93 million settlement with 16 insurance companies over cleanup costs at a notorious hazardous waste site.

Lloyd’s of London, one of the state’s major insurers, will pay $49 million of the settlement, the state Department of Justice said Tuesday.

Stringfellow Acid Pits was a dumping ground for 35 million gallons of liquid hazardous waste between 1956 and 1972. Cleanup has been under way since 1975 at the site in Riverside County.

“The Lloyd’s agreement represents a fair resolution of the state’s claim against its insurance policy,” Attorney General Bill Lockyer said in a statement. “Stringfellow is California’s highest priority Superfund site and we have spent more than 30 years and hundreds of millions of dollars to clean up the site.”

“While we were prepared to litigate, it was in our best interest to reach a fair settlement,” said Jon Nash, a spokesman for Equitas, an independent company that reinsured a number of Lloyd’s older policies.

The dispute between California and the insurers involved numerous insurance policies the state had purchased to cover potential liability.

In a 1998 decision, the state was found liable for the cleanup based on findings that it negligently investigated, designed and operated the site during the 1950s and 1960s, and then failed to address the pollution in a timely manner.

California has sued more than 30 insurance companies to get them to honor their policies; 19 insurers remain defendants in a case scheduled for trial in March.

Cleanup and other work going on at Stringfellow includes determining the extent of contamination, including in its groundwater. The site now includes a dam, extraction systems, treatment plants and other facilities.

The state estimates that the future cost of operating and maintaining the systems will top $300 million.

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