(CN) - The state of California is entitled to a trial against insurance companies to try to reduce its liability over pollution from the Stringfellow Acid Pits, the California Supreme Court ruled. California expects to pay nearly $500 million to remediate the land and groundwater contamination.
The state sued Allstate, Century, Columbia and Westport insurance companies for coverage after being found liable for pollution under federal and state law.
The trial court granted summary judgment to the insurers based on pollution exclusions in their policies.
The appeals court partially reversed the decision, ruling that trial issues of fact existed regarding the 1969 discharge of waste was "sudden and accidental."
Justice Werdegar upheld the decision.
"The State's liability was based on its having sited, designed, built, and operated the Stringfellow facility in such a negligent manner as to allow hazardous chemicals to escape from the evaporation ponds," Justice Werdegar noted.
However, Werdegar did not agree with the appellate court's decision that a similar incident nine years later was not accidental, because the state had been warned to cover the evaporation ponds to avoid a reoccurrence.
Werdegar found that the state made efforts to avoid the damage.
"These facts do not demonstrate the State expected rains so heavy they would overwhelm the improved drainage, defeat emergency measures, and threaten the dam," Werdegar wrote. "They show only that the state was aware of a flooding risk and took what proved to be inadequate measures against it."