In
Waste Management's troubles began when heavy storms flooded its landfill in
Waste Management sought defenses costs for the criminal proceedings from AIG. The policy provided coverage only for claims for clean-up costs and it did not apply to criminal penalties. Nonetheless, Waste Management argued that AIG had a duty to defend in the criminal proceedings because those proceedings were part of a single, coordinated enforcement process that began with the administrative order on consent that required cleanup.
The Fifth Circuit rejected this argument and instead held that the administrative order and the criminal proceedings were two separate claims under the policy. Since the criminal proceedings sought no clean-up costs from Waste Management, the criminal proceedings were not a covered claim, and therefore there was no duty to defend.
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