Chubb Custom Insurance Company v. Space Systems/ Loral, Inc.

dissenting:

I respectfully dissent. The majority provides a reasoned explication of why statutory subrogation under section 112(c), 42 U.S.C. § 9612 (c), does not apply. But the majority’s analysis of section 107(a), 42 U.S.C. § 9607 (a), does not honor Chubb’s right to equitable subrogation, which allows Chubb to stand in the shoes of Taube-Koret.

“Equitable subrogation is a broad equitable remedy,” Mort v. United States, 86 F.3d 890, 894 (9th Cir.1996), that for centuries has been recognized by courts. See generally M.L. Marasinghe, An Historical Introduction to the Doctrine of Subrogation: The Early History of the Doctrine II, 10 Val. U.L.Rev. 275 (1976). It “arose as a ‘creature of equity’ and ‘is enforced solely for the purpose of accomplishing the ends of substantial justice.’ ” Hamada v. Far E. Nat’l Bank (In re Hamada), 291 F.3d 645, 649 (9th Cir.2002) (quoting Memphis & L.R.R. Co. v. Dow, 120 U.S. 287, 302 , 7 S.Ct. 482 , 30 L.Ed. 595 (1887)). A good explanation of the equitable right of subrogation can be found in Dobbs’s treatise on the Law of Remedies:

1 Dan B. Dobbs, Law of Remedies: Damages-Equity-Restitution § 4.3(4), at 604 (West Publishing 2d ed. 1993)…

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHUBB CUSTOM INSURANCE No. 11-16272 COMPANY , for itself and as subrogee of, and in the name of Taube Koret D.C. No. Campus for Jewish Life, 5:09-cv-04485- Plaintiff-Appellant, JF

v.

OPINION

SPACE SYSTEMS/ LORAL, INC., a Delaware Corporation Successor Ford Aerospace and Communications Corp.; FORD

MOTOR COMPANY ; SUN

MICROSYSTEMS, INC., a Delaware Corporation; CHEVRON

CORPORATION ; HARMAN

STEVENSON INC., a California corporation doing business as KFC, Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Jeremy D. Fogel, District Judge, Presiding

Argued and Submitted November 8, 2012—San Francisco, California

Filed March 15, 2013 CHUBB CUSTOM INS. V . SPACE SYSTEMS/LORAL

Before: Ronald M. Gould, and Milan D. Smith, Jr., Circuit Judges, and Kevin Thomas Duffy, District Judge.*

Opinion by Judge Milan D. Smith, Jr.; Dissent by Judge Gould

SUMMARY**

Environmental Law

The panel affirmed the district court’s dismissal of an insurance company’s subrogation suit under the Comprehensive…

Opinion by Judge MILAN D. SMITH, JR.; Dissent by Judge GOULD.

OPINION

Plaintiff-Appellant Chubb Custom Insurance Company (Chubb) filed a subrogation suit against Defendants-Appellees 1 for recovery of insurance payments made to its insured, Taube-Koret Campus for Jewish Life (Taube-Koret), for environmental response costs Taube-Koret incurred in cleaning up pollutants released on its property. In the operative Third Amended Complaint (TAC), Chubb asserted subrogated claims under sections 107(a) and 112(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Pub.L. No. 96-510, 94 Stat. 2767 (1980), as amended, 42 U.S.C. §§ 9601-9675 . Chubb also brought subro-gated claims under state law. The district court dismissed Chubb’s TAC with prejudice under Federal Rule of Civil Procedure 12(b)(6). Chubb appealed the dismissal. We conclude that Chubb has no standing to bring suit under CERCLA section 107(a) because it did not incur any “costs *953 of response” related to the removal or remediation of a polluted site, and because the common law principle of subrogation does not apply to section 107(a); Chubb cannot bring a subrogation claim under section…