Anderson Brothers, Inc. v. St. Paul Fire and Marine Insur ( 2013 )


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  •                  FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    ANDERSON BROTHERS, INC., an             No. 12-35346
    Oregon corporation,
    Plaintiff-Appellee,      D.C. No.
    3:11-cv-00137-
    STATE OF OREGON,                             MO
    Intervenor-Appellee,
    v.
    ST. PAUL FIRE AND MARINE
    INSURANCE COMPANY, a Minnesota
    Insurance Company,
    Defendant-Appellant.
    ANDERSON BROTHERS, INC., an             No. 12-35454
    Oregon corporation,
    Plaintiff-Appellee,      D.C. No.
    3:11-cv-00137-
    STATE OF OREGON,                             MO
    Intervenor-Appellee,
    v.                       OPINION
    ST. PAUL FIRE AND MARINE
    INSURANCE COMPANY, a Minnesota
    Insurance Company,
    Defendant-Appellant.
    2    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    Appeal from the United States District Court
    for the District of Oregon
    Michael W. Mosman, District Judge, Presiding
    Argued and Submitted
    May 9, 2013—Portland, Oregon
    Filed August 30, 2013
    Before: Alex Kozinski, Chief Judge, and Stephen
    Reinhardt, and Marsha S. Berzon, Circuit Judges.
    Opinion by Judge Reinhardt
    SUMMARY*
    CERCLA / Insurance Law
    The panel affirmed the district court’s judgment in favor
    of an insured, holding that the insurer breached its duty to
    defend when it refused to provide a defense after the insured
    received letters from the Environmental Protection Agency,
    notifying the insured of its potential liability under the
    Comprehensive Environmental Response, Compensation, and
    Liability Act for environmental contamination of the Portland
    Harbor Superfund Site.
    The Environmental Protection Agency sent two letters to
    the insured: a letter issued pursuant to Section 104(e) of
    *
    This summary constitutes no part of the opinion of the court. It has
    been prepared by court staff for the convenience of the reader.
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.         3
    CERCLA requiring the insured to respond to questions that
    necessarily established its liability under CERCLA; and a
    General Notice Letter identifying the insured as a potentially
    responsible party. The panel held that both the 104(e) Letter
    and the General Notice Letter were “suits” under Oregon law
    within the meaning of the policies’ duty to defend. The panel
    also held that the letters alleged facts sufficient to alert the
    insured to its potential liability for environmental
    contamination under CERCLA. The panel held that the
    insurer breached its duty to defend, and affirmed the
    attorney’s fee award in the insured’s favor.
    COUNSEL
    Seth Row (argued), Parsons, Farnell, & Grein, LLP, Portland,
    Oregon, for Plaintiff-Appellee Anderson Brothers, Inc.
    David B. Thompson (argued), Senior Assistant Attorney
    General, Salem, Oregon, for Intervenor-Appellee State of
    Oregon.
    Thomas A. Gordon (argued) and Andrew Moses, Gordon &
    Polscer, LLC, Portland, Oregon, for Defendant-Appellant St.
    Paul Fire and Marine Insurance Company.
    Laura A. Foggan, Wiley Rein LLP, Washington, D.C., for
    Amicus Curiae Complex Insurance Claims Litigation
    Association.
    4   ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    OPINION
    REINHARDT, Circuit Judge:
    The Comprehensive Environmental Response,
    Compensation, and Liability Act, 
    42 U.S.C. § 9601
     et seq.
    (“CERCLA”), establishes a retroactive strict liability regime
    that imposes joint and several liability upon past and current
    landowners or operators of properties or facilities from which
    hazardous substances have been released or disposed into the
    environment. Plaintiff-Appellee Anderson Brothers, Inc.,
    (“Anderson”) received two letters from the Environmental
    Protection Agency (“EPA”) notifying Anderson of its
    potential liability under CERCLA for environmental
    contamination of the Portland Harbor Superfund Site. The
    first letter required Anderson to submit an extremely detailed
    response to a questionnaire about its activities at its
    properties, under threat of severe civil penalties. The
    questionnaire required Anderson to respond to questions that
    necessarily established its liability under CERCLA. The
    second formally identified Anderson as a potentially
    responsible party (“PRP”) and “encourage[d]” it to participate
    in settlement negotiations with other PRPs.
    Anderson’s general liability insurer, Defendant-Appellant
    St. Paul Fire and Marine Insurance Co. (“St. Paul”), declined
    to provide Anderson with a legal defense. Under the
    comprehensive general liability policies in question, St. Paul
    has a duty to defend Anderson against “suits” for activities
    covered by the comprehensive general liability policies. St.
    Paul did not consider the letters sent to Anderson to be “suits”
    because they were not filed in a court of law. In light of
    CERCLA’s unique liability regime, which is designed to
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.                 5
    promote settlement with the EPA instead of litigation, the
    district court held that both letters were “suits.”
    We affirm.
    I
    Anderson is an Oregon corporation that owned and leased
    property, falling within the boundaries of the Portland Harbor
    Federal Superfund Site (“the Site”). St. Paul issued two
    comprehensive general liability policies (“the Policies”) to
    Anderson,1 providing coverage for damages arising from
    “occurrences” that happened between January 1979–80 and
    January 1980–81, respectively.          St. Paul’s relevant
    obligations under the Policies, which include a duty to defend
    Anderson, are as follows:
    The Company will pay on behalf of the
    insured all sums which the insured shall
    become legally obligated to pay as damages
    because of: . . . property damage to which this
    insurance applies, caused by an occurrence,
    and the Company shall have the right and duty
    to defend any suit against the Insured seeking
    damages on account of such . . . property
    damage, even if any of the allegations of the
    suit are groundless, false or fraudulent, and
    may make such investigation and settlement
    of any claim or suit as it deems expedient . . . .
    (Emphasis added.)
    1
    St. Paul also issued additional policies to Anderson and to another
    corporate entity owned by Anderson. Those policies are not at issue here.
    6       ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    The EPA listed the Site as a “Superfund” site in
    December 2000.2 See 
    65 Fed. Reg. 75179
    , 75182 (Dec. 1,
    2000). On or around January 18, 2008, Anderson received a
    letter from the EPA, issued pursuant to Section 104(e) of
    CERCLA, 
    42 U.S.C. § 9604
    (e) (“the 104(e) Letter”). The
    104(e) Letter stated that the EPA “seeks [Anderson’s]
    cooperation” in its investigation of the release of hazardous
    substances at the Site, and explained that EPA was seeking
    information from “current and past landowners, tenants, and
    other entities believed to have information about activities
    that may have resulted in releases or potential threats of
    releases of hazardous substances to the Site.” The 104(e)
    Letter enclosed an extensive 82-question “Information
    Request” seeking, inter alia: information about Anderson’s
    ownership of and operations at any property within the Site;
    specific physical, environmental, and structural descriptions
    of each property Anderson leased or owned within the Site;
    and detailed descriptions of Anderson’s current and former
    activities at the Site, including its use of drainage and sewage
    lines, its handling and disposal of any hazardous substances
    and soils, and its use of groundwater. The 104(e) Letter also
    informed Anderson that “[w]hile EPA seeks your voluntary
    cooperation . . . compliance with the Information Request is
    required by law” and failure to respond could result in an
    enforcement action and civil penalties of $32,500 per day of
    noncompliance.
    2
    “Superfund site” is a colloquial term used to refer to sites listed by the
    EPA on the National Priorities List (or “Superfund list”) as part of the
    National Contingency Plan for the Removal of Oil and Hazardous
    Substances, pursuant to section 105 of CERCLA, 
    42 U.S.C. § 9605
    . See
    Pakootas v. Teck Cominco Metals, Ltd., 
    646 F.3d 1214
    , 1216 (9th Cir.
    2011). Superfund sites are sites believed by the EPA to be amongst the
    most contaminated in the nation or those most urgently requiring further
    investigation or remediation.
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.               7
    Anderson tendered the 104(e) Letter to St. Paul, and
    requested that St. Paul provide a legal defense and indemnity
    pursuant to its contractual duty to defend. St. Paul declined
    to provide a defense.
    In November 2009, Anderson received a second letter
    from the EPA entitled “General Notice Letter for the Portland
    Harbor Superfund Site” (“the General Notice Letter”). The
    General Notice Letter explained that under sections 106 and
    107 of CERCLA, 
    42 U.S.C. §§ 9606
    –9607, parties identified
    by the EPA as PRPs may be required to take action to clean
    up environmental contamination as ordered by the EPA, to
    reimburse the EPA for its own expenditures in cleaning up
    the Site, and to pay damages for any harm to natural
    resources caused by contamination at the Site. It continued:
    EPA has evaluated information in connection
    with the investigation of the Site performed to
    date and believes that Anderson Brothers, Inc.
    and Specialty Truck Parts[3] may be a PRP
    with respect to the Site. . . . EPA has reason
    to believe that hazardous substances have
    been or are being released from the
    facility(ies) located at [properties owned and
    leased by Anderson] in Portland, Oregon, into
    the ‘study area’ for [the Site] . . . .
    The General Notice Letter also “encourage[d]
    communication between [Anderson], other PRPs, and EPA”
    and enclosed a list “of PRPs identified to date for the Site.”
    The letter urged Anderson to communicate with a
    3
    Specialty Truck Parts was a corporation acquired by Anderson in 1973
    and dissolved in 1992.
    8   ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    “Convening Group” in which “PRPs work together to allocate
    the cleanup costs and work through intra-party issues to
    prepare for future negotiations with EPA for performance of
    the cleanup and reimbursement of response costs after EPA
    has issued its Record of Decision for the [Site.]”
    Participation in the Convening Group “will avoid litigation
    and significant transaction costs to you and your company.”
    The General Notice Letter was a form letter, identical to the
    one sent out to all PRPs at the Site.
    Anderson tendered the General Notice letter to St. Paul,
    again requesting that St. Paul provide a legal defense under
    its contractual duty to defend. St. Paul again refused to
    provide a defense.
    II
    Anderson sued St. Paul in district court, alleging that St.
    Paul breached its duty to defend under the Policies by
    refusing to provide Anderson with a legal defense in response
    to each of the two letters. After the parties filed cross-
    motions for summary judgment, the State of Oregon
    intervened on Anderson’s behalf in order to defend the
    constitutionality of the Oregon Environmental Cleanup
    Assistance Act, which provides a legislatively-imposed
    definition of “suit” in comprehensive general liability
    policies, as discussed below.
    The district judge granted Anderson’s motion for partial
    summary judgment from the bench, concluding that both
    letters triggered St. Paul’s duty to defend. The parties
    stipulated to the resulting damages in order to obtain a final
    judgment. St. Paul appealed.
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.       9
    Anderson then moved for attorney’s fees pursuant to 
    Or. Rev. Stat. § 742.061
    . The district court granted Anderson’s
    motion in part, awarding slightly less fees than it had
    requested. St. Paul filed a timely notice of appeal of the
    attorney’s fee award, acknowledging that the award should be
    reversed only in the event that this court were to reverse the
    district court’s judgment on the merits. We consolidated the
    appeals.
    III
    The primary question before us is whether the 104(e)
    Letter and the General Notice Letter are “suits” under Oregon
    law within the meaning of the Policies’ duty to defend. If
    either letter was a “suit,” St. Paul had a duty to defend
    Anderson, although that duty would be invoked later if only
    the second letter caused it to commence. Otherwise, St. Paul
    acted within its rights in refusing to provide Anderson with a
    defense.
    A
    The Policies here are standard-form comprehensive
    general liability policies. See Susan J. Miller & Philip
    Lefebvre, 1 Miller’s Standard Insurance Policies Annotated
    421.5 (2013 Supp.) (replicating the 1973 standard form
    comprehensive general liability policy that was in use when
    the Policies were issued). Identical policies were issued by
    insurers nationwide at the time the Policies were purchased.
    Because the EPA is engaged in Superfund remediation
    projects across the nation, it comes as no surprise that the
    question whether a letter from the EPA initiating proceedings
    under CERCLA constitutes a “suit” has been widely litigated.
    10 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    This question has divided state courts as well as federal courts
    applying contract law of the several states.
    Although the legal question here is one of state contract
    law, the nature of the federal CERCLA regime is relevant to
    the contractual interpretation issues. CERCLA imposes strict
    liability on all entities that have owned or operated
    “facilities”4 at which hazardous substances were “disposed.”
    See Carson Harbor Village, Ltd. v. Unocal Corp., 
    270 F.3d 863
    , 870 (9th Cir. 2001) (en banc); see also 
    42 U.S.C. §§ 6903
    , 9601(29) (defining “disposal”). The current owner
    of any facility at the time of cleanup is also strictly liable for
    any “release” of hazardous substances from the facility, see
    
    42 U.S.C. § 9601
    (22) (defining “release” broadly), unless the
    owner satisfies the “narrowly applicable” “innocent
    landowner” defense, Carson Harbor, 
    270 F.3d at 883
    ; see
    
    42 U.S.C. §§ 9601
    (35), 9607(a)–(b).
    “Once an entity is identified as a PRP,” the EPA has
    broad authority to compel it “to clean up a contaminated area
    or reimburse the Government for its past and future response
    costs.” Burlington Northern & Sante Fe Ry. Co. v. United
    States, 
    556 U.S. 599
    , 609 (2009); see also Pakootas v. Teck
    Cominco Metals, Ltd., 
    452 F.3d 1066
    , 1072–73 (9th Cir.
    2006) (summarizing the various tools at the EPA’s disposal
    to arrange for a contaminated site to be cleaned up at PRPs’
    ultimate expense). A PRP’s failure to cooperate with any
    reasonable order from the EPA at a contaminated site can
    result in significant civil liability. See Pakootas, 452 P.3d at
    1073. These broad powers give the EPA strong leverage to
    4
    Facility is defined so broadly as to include almost any property or
    structure from which hazardous substances are emitted. See 
    42 U.S.C. § 9601
    (9); see also United States v. Bestfoods, 
    524 U.S. 51
    , 56 (1998).
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 11
    compel PRPs to settle. Indeed, “encourag[ing] early
    settlement between [PRPs] and environmental regulators” is
    one of CERCLA’s central purposes. California Dep’t of
    Toxic Substances v. Hearthside Residential Corp., 
    613 F.3d 910
    , 915 (9th Cir. 2010); see also Interim Guidance, 53 Fed.
    Reg. at 5298.
    It is vital for a PRP to participate in settlement talks at the
    earliest possible opportunity because “[n]on-settling PRPs
    may be held jointly and severally liable for the entire amount
    of response costs minus the amount of the settlement.” United
    States v. Aerojet Gen. Corp., 
    606 F.3d 1142
    , 1152 (9th Cir.
    2010). Furthermore, non-settling PRPs may not file a
    contribution action against settling PRPs “regarding matters
    addressed in the settlement.” 
    42 U.S.C. § 9613
    (f)(2). For
    this reason, the EPA sends general notice letters to PRPs “as
    early in the process as possible”; “[e]arly receipt of the
    general notice will ensure that PRPs have adequate
    knowledge of their potential liability as well as a realistic
    opportunity to participate in settlement negotiations.” Interim
    Guidance, 53 Fed. Reg. at 5301.
    In light of the effect on a PRP of failing to voluntarily
    participate in CERCLA settlement negotiations, it is perhaps
    not surprising that the “huge majority of U.S. courts hold that
    a policyholder’s receipt of a PRP notice[5] from the U.S. EPA
    5
    We refer to EPA’s November 2009 letter as the General Notice Letter,
    because that is how it is captioned. This court and other courts, however,
    have also referred to such letters as “PRP notices” or “PRP letters”
    because general notice letters are the EPA’s method of advising an entity
    that it is a PRP. See Interim Guidance, 53 Fed. Reg. at 5300. The terms
    are interchangeable.
    12 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    . . . is the ‘functional equivalent’ of a ‘suit.’” Land O’Lakes,
    Inc. v. Employers Mut. Ins. Co. of Wis., 
    846 F. Supp. 2d 1007
    ,
    1020 (D. Minn. 2012) (quoting 2 Tod Zuckerman & Mark
    Raskoff, Environmental Insurance Litigation: Law and
    Practice § 12:33 (2011)); see also id. at nn.16–17 (collecting
    11 state supreme court decisions holding that PRP letters
    trigger “suits” and 3 state supreme courts holding to the
    contrary). Indeed, this court was one of the first courts to
    adopt that now-majority view. See Aetna Cas. & Sur. Co. v.
    Pintlar Corp., 
    948 F.2d 1507
    , 1516, 1517 (9th Cir. 1991)
    (applying Idaho law).
    In Pintlar, we held, under Idaho contract law, that a PRP
    notice “is the effective commencement of a ‘suit’
    necessitating a legal defense.” 
    Id.
     We explained that once
    the EPA has identified a possible PRP, “[i]n order to
    influence the nature and costs of the environmental studies
    and cleanup measures, the PRP must get involved from the
    outset.” 
    Id.
     Failure to cooperate with any requests by the
    EPA “may expose the insured, and potentially its insurers, to
    much greater liability, including the EPA’s litigation costs.”
    
    Id.
     Accordingly, we held that insurance coverage “should not
    Almost all of the cases addressing whether a communication from the
    EPA is a “suit” have dealt with general notice letters rather than 104(e)
    letters. This is likely because the EPA often sends the two letters
    simultaneously. See Interim Guidance on Notice Letters, Negotiations,
    and Information Exchange, 
    53 Fed. Reg. 5298
    , 5300 (Feb. 23, 1988)
    (“Interim Guidance”). At the Site, however, the EPA’s practice appears,
    at least in many instances, to have been to send 104(e) Letters to property
    owners within the Site prior to sending General Notice Letters. See, e.g.,
    Century Indemnity Co. v. Marine Group, LLC, 
    848 F. Supp. 2d 1238
    ,
    1244–45 (D. Or. 2012) (PRP received General Notice Letter two years
    after receiving 104(e) Letter).
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 13
    depend on whether the EPA may choose to proceed with its
    administrative remedies or go directly to litigation.” 
    Id.
    With these observations in mind, we turn to the
    immediate questions before us, i.e. whether there is any
    reason to reach a different result under Oregon law than the
    one we reached in Pintlar, and, if so, whether the same
    conclusion is justified with respect to the 104(e) Letter as
    well.6
    B
    In 1999, the Oregon legislature enacted the Oregon
    Environmental Cleanup Assistance Act, 
    Or. Rev. Stat. §§ 465.475
    –465.480 (“OECAA”).7 OECAA provides a
    definition for the term “suit,” and instructs courts to apply
    that definition when interpreting comprehensive general
    liability policies in cases involving administrative actions by
    the EPA. OECAA defines “suit” as follows:
    Any action or agreement by the . . . [EPA]
    against or with an insured in which . . . the
    6
    Aside from contending that Pintlar has no bearing on this case
    because it applies Idaho contract law, St. Paul also argues that Pintlar is
    factually distinct because the insured in Pintlar had received further
    communications after receiving a General Notice Letter and had agreed
    to perform a remedial study. We disagree. Pintlar clearly held that the
    duty to defend was triggered by the General Notice Letter, not by any
    subsequent communications between Pintlar and the EPA. See Pintlar,
    
    948 F.2d at 1517
     (“[A]n ‘ordinary person’ would believe that the receipt
    of a PRP notice is the effective commencement of a ‘suit’ necessitating
    legal defense.” (emphasis added)).
    7
    OECAA was amended in ways not relevant here on June 10, 2013.
    See 2013 Or. Laws. Ch. 350 (2013).
    14 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    [EPA] in writing directs, requests or agrees
    that an insured take action with respect to
    contamination within the State of Oregon is
    equivalent to a suit or lawsuit as those terms
    are used in any general liability insurance
    policy.
    
    Or. Rev. Stat. § 465.480
    (2)(b). OECAA’s “savings clause,”
    states that the definition of “suit” applies unless the intent of
    the parties is shown to be contrary to the definition provided
    by the statute. 
    Or. Rev. Stat. § 465.480
    (8). Because
    OECAA’s statutory definition of “suit” does not apply if that
    definition is contrary to the parties’ intent, we first determine
    whether the Policies demonstrate the parties’ intended
    meaning of “suit,” and whether any such intent is contrary to
    the OECAA definition.
    How to determine the meaning of a disputed term in a
    particular insurance policy is a question of state law. Like
    most states, Oregon determines the intent of parties to an
    insurance contract by looking first to the plain meaning of
    any disputed terms and then to the structure and context of
    the policy as a whole. See Gonzales v. Farmers Ins. Co. of
    Or., 
    196 P.3d 1
    , 3 (Or. 2008); Hoffman Constr. Co. of Alaska
    v. Fred S. James & Co., 
    836 P.2d 703
    , 706–07 (Or. 1992). If
    the parties’ intent cannot be determined by doing so, the
    policy is construed against the insurer, because “any
    reasonable doubt as to the intended meaning of [an
    ambiguous] term will be resolved against the insurance
    company and in favor of extending coverage to the insured.”
    N. Pac. Ins. Co. v. Hamilton, 
    22 P.3d 739
    , 742 (Or. 2001)
    (quotation marks omitted); accord Hoffman, 836 P.2d at 707.
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 15
    Fortunately, our task is made relatively simple by two
    decisions of Oregon’s intermediate appellate court that hold
    the term “suit” ambiguous as used in comprehensive general
    liability policies not materially distinguishable from the ones
    at issue here. See Underwriters at Lloyd’s London & Excess
    Ins. Co. v. Mass. Bonding & Ins. Co., 
    230 P.3d 103
     (Or. Ct.
    App. 2010), rev. denied, 
    243 P.3d 468
     (Or. 2010); Schnitzer
    Inv. Corp. v. Certain Underwriters at Lloyd’s of London,
    
    104 P.3d 1162
     (Or. Ct. App. 2005), aff’d on other grounds,
    
    137 P.3d 1282
     (Or. 2006).8
    Although one definition of “suit” is that the term refers to
    a lawsuit, Schnitzer recognized that “[o]ne of the ordinary
    meanings of the word ‘suit’ is ‘the attempt to gain an end by
    any legal process.’” 
    104 P.3d at 1168
     (quoting Webster’s
    Third New International Dictionary 2286 (unabridged ed.
    2002)); see also School Dist. No. 1, Multnomah Cnty. v.
    Mission Ins. Co., 
    650 P.2d 929
    , 937 (Or. Ct. App. 1982)
    (using the latter definition and referring to the 1976 edition of
    Webster’s New International Dictionary). Presumably
    because Oregon courts are obligated to interpret a policy in
    the policyholder’s favor when neither the plain language nor
    the structure and content of the policy evince any specific
    intended meaning by the parties, Schnitzer relied on the
    broader meaning of “suit.” 
    104 P.3d at
    1168–69. Applying
    8
    Even though Schnitzer and Massachusetts Bonding were both decided
    after OECAA was passed, neither applied OECAA’s definition of “suit.”
    In Schnitzer, the insured demanded a defense in 1991, almost a decade
    before OECAA’s enactment, so the court did not apply the statute.
    
    104 P.3d at
    1168 n.5. In Massachusetts Bonding the court relied on
    Schnitzer and St. Paul Fire & Marine Ins. Co. v. McCormick & Baxter
    Creosoting Co., 
    870 P.2d 260
     (Or. Ct. App. 1994), rather than OECAA,
    although it did state in a footnote, which was dicta, that OECAA
    “codified” McCormick & Baxter. 
    230 P.3d at
    116–17 & n.13.
    16 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    that definition, Schnitzer held that the policyholder had been
    subjected to an environmental “suit” because communications
    between itself and Oregon’s Department of Environmental
    Quality “described the factual basis on which [the agency]
    sought to hold plaintiff liable for the cost of the
    environmental cleanup.” 
    104 P.3d at 1169
    .
    Massachusetts Bonding reaffirmed Schnitzer, holding that
    [l]ike the policies at issue in Schnitzer
    Investment Corp. and McCormick & Baxter
    Creosoting, the policies here do not define
    “suit.” Nor are we persuaded that any of the
    other terms of the policies provide sufficiently
    clear contextual guidance regarding the
    parties’ intended meaning. Accordingly, we
    see no reason to reach a different
    interpretation of the term “suit” than we
    reached in our previous cases.
    
    230 P.3d at 117
    .
    The teaching of Massachusetts Bonding and Schnitzer is
    that under Oregon law, at least in environmental cases, the
    word “suit” is ordinarily ambiguous. Therefore, such a policy
    necessarily does not demonstrate any intent of the parties that
    would be contrary to OECAA’s statutory definition of the
    term. We see no reason to believe that the Oregon Supreme
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 17
    Court would hold otherwise.9 Accordingly, we apply
    OECAA’s definition of “suit” here.10
    St. Paul offers two arguments against our applying
    OECAA’s definition of “suit.” Neither is persuasive. First,
    St. Paul argues that the two letters at issue here are less
    coercive than the communications in Schnitzer and
    Massachusetts Bonding, and, therefore, they do not fit within
    the range of permissible meanings of the term “suit”
    developed in those cases. This argument misses the point of
    Schnitzer and Massachusetts Bonding. As we explained,
    these two cases establish that the term “suit” is ambiguous
    and can reasonably be interpreted to include any “attempt to
    gain an end by any legal process.” Schnitzer, 
    104 P.3d at 1168
    . The communications from Oregon’s Department of
    Environmental Quality were not interpreted as triggering
    “suits” because of their particularly coercive nature, but,
    rather, because they initiated the legal process provided under
    Oregon law for compelling a landowner to either clean up a
    9
    When, as here, Oregon Supreme Court decisions do not resolve the
    question before us we “follow the decisions of the state’s intermediate
    appellate courts where there is no convincing evidence that the state
    supreme court would decide differently.” Bills v. United States Fidelity
    & Guar. Co., 
    280 F.3d 1231
    , 1234 n.1 (9th Cir. 2002). Were the Oregon
    Supreme Court to conclude that the word “suit” has the narrow plain
    meaning proposed by St. Paul it would join the increasingly isolated
    minority of states that adhere to that view. See, e.g., Johnson Controls,
    Inc. v. Employers Ins. of Waussau, 
    665 N.W.2d 257
     (Wis. 2003)
    (overruling its prior holding that “suit” only means a lawsuit filed in
    court).
    10
    There is no evidence aside from the standard-form Policies
    illuminating Anderson and St. Paul’s intent with regard to the meaning of
    “suit”—and certainly no evidence of intent contrary to the OECAA
    definition of that term.
    18 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    hazardous waste site or pay for others to undertake clean-up
    efforts. See Schnitzer, 
    104 P.3d at
    1168–69; see also
    McCormick & Baxter, 
    870 P.2d at 266
     (holding that a suit
    was triggered where communications established the
    agency’s view that “[u]nder the statutes governing cleanup of
    environmental damage, [the insured] was going to have to
    pay”).
    Similarly, both the 104(e) Letter and the General Notice
    Letter at issue here were attempts by EPA “to gain an end by
    a[] legal process” and, therefore, were within the scope of
    ambiguity of the term “suit.” The 104(e) letter compelled
    Anderson to respond to an intrusive questionnaire the answers
    to which exposed it to extensive liability—plainly an end
    obtained through legal process. As to the General Notice
    Letter, by specifically alleging that “EPA has reason to
    believe that hazardous substances have been or are being
    released” and “encourag[ing]” Anderson to communicate
    with “other PRPs” in order to “avoid litigation and significant
    transaction costs,” it left little doubt that EPA was seeking to
    obtain Anderson’s cooperation through the legal process of
    identifying Anderson as a PRP.11 In light of the unique role
    11
    This unambiguous language, which directly accuses Anderson of
    owning property from which hazardous substances are being released,
    demonstrates the error of St. Paul’s argument that the General Notice
    Letter does not really accuse Anderson of being a PRP. St. Paul
    emphasizes the General Notice Letter’s statement that Anderson “may be
    a PRP with respect to this Site.” (Emphasis added.) In context, the EPA’s
    use of the word “may” does not suggest any actual doubt by the EPA as
    to whether Anderson is liable under CERCLA, but rather that the issue has
    not yet been adjudicated by a neutral party. Furthermore, the EPA has
    stated that the language used in the General Notice Letter was generic
    language used in every general notice letter sent by the EPA to PRPs at the
    Site. See also Century Indemnity, 848 F. Supp. 2d at 1245 (describing
    another General Notice Letter at the Site using the same language).
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 19
    settlement and coercive information demands play in
    CERCLA, there is little doubt that each letter was an attempt
    to gain an end through legal process.
    Second, St. Paul points out that the Policies’ duty to
    defend clauses distinguish between suits (which insurers must
    defend) and claims (which insurers may investigate and
    settle, but need not necessarily defend). It argues that
    interpreting the letters at issue here as having triggered a
    “suit” effectively writes the word “claim” out of the policy
    because, in St. Paul’s view, the letters at issue here are, at
    most, demand letters, and the word “claim” refers to pre-
    litigation communications such as demand letters. See, e.g.,
    Foster-Gardner, Inc. v. Nat. Union Fire Ins. Co., 
    959 P.2d 265
    , 280–81 (Cal. 1998) (accepting this argument under
    California law); Lapham-Hickey Steel Corp. v. Protection
    Mut. Ins. Co., 
    655 N.E. 2d 842
    , 847 (Ill. 1995) (same under
    Illinois law).
    We agree with St. Paul that a “claim” can include any
    communication that is “a demand of a right or supposed
    right” or “a demand for compensation, benefits, or payment,”
    Webster’s Third International Dictionary 414 (1976 ed.), and
    therefore includes most demand letters sent by a third party
    to a policyholder. St. Paul errs, however, when it suggests
    that classifying the two letters as “suits” rather than mere
    “claims” would render the term “claim” nugatory. The letters
    here are not normal demand letters. They are formal steps in
    a legal process administered by the EPA that inexorably leads
    to the EPA seeking to hold property owners strictly liable for
    environmental contamination. Therefore, treating the letters
    as “suits” does not diminish the meaning of the term “claim”
    as it is used in the Policies; “claim” continues to refer to
    normal demand letters.
    20 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    Unlike a normal demand letter, neither letter made a
    demand that Anderson was free to ignore. With respect to the
    General Notice Letter, as we explained in Pintlar:
    Unlike the garden variety demand letter,
    which only exposes one to a potential threat of
    future litigation, a PRP notice carries with it
    immediate and severe implications.
    Generally, a party asserting a claim can do
    nothing between the occurrence of the tort and
    the filing of the complaint that can adversely
    affect the insureds’ rights. However, in a
    CERCLA case, the PRP’s substantive rights
    and ultimate liability are affected from the
    start of the administrative process.
    Pintlar, 
    948 F.2d at 1516
    . Similarly, Anderson could not
    disregard the 104(e) letter. That letter expressly warns
    Anderson that its failure to respond (or its submission of an
    “incomplete, ambiguous or evasive” response) could result in
    a fine of up to $32,500 per day. No “garden variety” demand
    letter that is a mere “claim” could impose such a requirement
    upon the recipient.12 Accordingly, the Policies’ “claim or
    12
    Our approach is in harmony with a number of state supreme courts
    that have also found that letters that might simply pass for demand letters
    (and therefore, mere “claims”) in other contexts are “suits” in the context
    of a CERCLA claim. See, e.g., R.T. Vanderbilt Co. v. Cont’l Cas. Co.,
    
    870 A.2d 1048
    , 1062–63 (Conn. 2005) (“[C]oncluding that a PRP letter
    constitutes a suit does not disturb the distinction between the terms suit
    and claim in the . . . comprehensive liability policies.”); Michigan Millers
    Mut. Ins. Co. v. Bronson Plating Co., 
    519 N.W. 2d 864
    , 871 n.13 (Mich.
    1994), overruled on other grounds by Wilkie v. Auto-Owners Ins. Co., 
    664 N.W. 2d 776
     (Mich. 2003); Coakley v. Maine Bonding & Cas. Co.,
    
    618 A.2d 777
    , 786 (N.H. 1992).
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 21
    suit” language does not demand the narrow interpretation of
    “suit” that St. Paul urges.
    C
    Having concluded that Anderson and St. Paul did not
    express an intent contrary to the OECAA definition, we now
    apply the OECAA definition to that term. Under Section 2(b)
    of OECAA, a particular communication between EPA and an
    insured entity is a “suit” if it is (1) an “action or agreement”
    by the EPA (2) that is “against or with” the insured (3) in
    which the EPA “in writing directs, requests or agrees” that
    the insured “take action” (4) and that such action be “with
    respect to contamination within the State of Oregon.”13 
    Or. Rev. Stat. § 465.480
    (2)(b). We analyze each element in turn.
    First, the EPA’s sending of each letter constituted
    “action.” The word “action” has both an informal and a more
    formal, legalistic meaning. See Webster’s Third New
    International Dictionary 21 (3d unabridged ed. 2002); see
    also Black’s Law Dictionary 31 (8th ed. 2004). It is clear that
    the Oregon legislature intended that, in the context of
    OECAA, the term “action” have its less formal definition.
    Section 2(b) refers to “actions or agreements” in which the
    EPA “directs, requests or agrees” that the insured entity take
    action. 
    Or. Rev. Stat. § 465.480
    (2)(b) (emphasis added). A
    formal legal proceeding would not result in a “request” by the
    13
    We see no merit to St. Paul’s argument that Section 1(a), which
    provides a definition of the terms “‘suit’ or ‘lawsuit’” “[a]s used in this
    section,” 
    Or. Rev. Stat. § 465.480
    (1)(a) (emphasis added), is relevant.
    OECAA is perfectly clear that the definition of “suit” contained in Section
    1(a) is the definition of the term as used in the statute, whereas Section
    2(b) provides the definition that should be used to interpret the word “suit”
    as used in general liability insurance policies such as the Policies here.
    22 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    EPA that the insured act in a particular fashion. The statute’s
    use of the verb “request” makes sense only if “action” has its
    less legalistic meaning. In addition, the use of the term
    “action” elsewhere in the statute proves that “action” does not
    mean “formal legal proceeding.” Section 465.480(1)(a)
    expressly treats as separate categories “formal judicial
    proceedings” and “administrative proceedings and actions
    taken . . . under federal law.” (emphasis added). Thus, we
    construe the term “action” broadly in § 465.480(2)(b) as well.
    Applying a broad definition of “action,” we have no trouble
    concluding that the EPA’s sending of both the 104(e) Letter
    and the General Notice were “actions.”
    Second, both letters are actions by the EPA “against”
    Anderson. “Against” means “in opposition or hostility to.”
    Webster’s Third New International Dictionary 39 (3d
    unabridged ed. 2002). There is no question that each letter is
    hostile to Anderson and in opposition to its interests.
    Third, each letter also “directs” or “requests” that
    Anderson “take action.” While one might dispute whether the
    letters “direct” that Anderson do anything, there is no
    question that they “request” that it do so. The 104(e) Letter
    is explicit: “[Y]ou are hereby requested to respond to the
    Information Request attached to this letter.” (Emphasis
    added.) The General Notice Letter is slightly more
    circumspect; it “encourage[s]” Anderson to contact other
    PRPs to participate in settlement discussions. Nonetheless,
    the EPA’s not-so-veiled threat that participation in the
    convening group is necessary to “avoid litigation and
    significant transaction costs to you and your company” leaves
    little question that the General Notice Letter is (at least) a
    request that Anderson take action. See Pintlar, 
    948 F.2d at 1517
     (noting that “[l]ack of cooperation” with a PRP letter
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 23
    “may expose the insured, and potentially its insurers, to much
    greater liability, including the EPA’s litigation costs”).
    Fourth, the actions requested by the EPA in the two letters
    are plainly “with respect to contamination in the State of
    Oregon.” They concern nothing but contamination at the
    Site, Anderson’s potential liability for such contamination,
    and EPA’s efforts to clean up the contamination.
    Accordingly, we hold that both the 104(e) Letter and the
    General Notice Letter constitute “suits” within the meaning
    of OECAA.
    D
    Finally, St. Paul argues that applying OECAA’s definition
    of “suit” would violate the Contracts Clauses of the United
    States and Oregon Constitutions because the statutory
    definition would alter its contractual commitments under the
    Policies. As we have stated, however, under Oregon common
    law, if a contractual term is found to be ambiguous, it is
    generally interpreted against the insurer. See Hamilton,
    22 P.3d at 742; Hoffman, 836 P.2d at 707. Because
    OECAA’s definition of “suit” applies only when the parties
    did not have any intent with respect to the meaning of the
    word “suit,” (or when their expressed intent was not contrary
    to the OECAA definition), we reject St. Paul’s argument that
    OECAA, as applied, violates the United States and Oregon
    Constitutions’ Contracts Clauses. Absent OECAA, we would
    simply construe the Policies against St. Paul as required by
    Oregon common law. This explains why the Massachusetts
    Bonding court suggested that OECAA merely “codified” for
    environmental cases the broad common law definition of
    “suit” that Oregon courts had previously adopted in
    24 ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO.
    construing insurance contracts. 
    230 P.3d at
    117 n.13.
    Therefore, St. Paul’s rights under the Policies are not
    diminished by our resort to OECAA’s definition of “suit.”
    IV
    Alternatively, St. Paul argues that even if the letters are
    “suits,” neither triggered the duty to defend because they do
    not allege conduct covered under the Policies. St. Paul’s
    argument is based on the fact that neither letter specifically
    demands that Anderson pay compensation for the release of
    hazardous substances from its property. St. Paul’s factual
    observation is true, but its legal conclusion does not follow.
    There is no requirement under Oregon law that a suit
    against a policyholder contain a demand for specific damages
    in order to trigger the duty to defend. It is sufficient that the
    suit contain allegations that, if proven, “could impose liability
    for the conduct covered by the policies[.]” Massachusetts
    Bonding, 
    230 P.3d at 116
    . In determining whether a suit
    alleges conduct covered by the policy “[t]he insurer has a
    duty to defend if the complaint provides any basis for which
    the insurer provides coverage” and any ambiguities in the
    scope of coverage must be resolved in the insured’s favor.
    Ledford v. Gutoski, 
    877 P.2d 80
    , 83 (Or. 1994) (emphasis in
    original). The “analysis focuses on the allegations in the
    complaint rather than the claims identified in it.” Nat. Union
    Fire Ins. Co. of Pittsburgh Pa. v. Starplex Corp., 
    188 P.3d 332
    , 347 (Or. Ct. App. 2008) (quotation marks and alteration
    omitted) (emphasis in original). Thus, St. Paul’s argument
    that “[a]t no point do[] the [two letters] seek the payment of
    ‘damages’ for property damage or bodily injury” is of no
    avail. The letters need only allege facts which, if proven,
    would ultimately render Anderson liable for CERCLA
    ANDERSON BROS. V. ST. PAUL FIRE & MARINE INS. CO. 25
    damages.14 Here, interpreting any ambiguity in the letters in
    Anderson’s favor, see Ledford, 877 P.2d at 83, both letters
    triggered the duty to defend. Each letter put Anderson on
    notice of the EPA’s belief that Anderson was responsible for
    the release or disposal of hazardous substances at the Site and
    of its intent to pursue compensation for Anderson’s alleged
    role in such releases or disposals. We therefore hold that both
    letters alleged conduct covered under the policies and,
    therefore, triggered St. Paul’s duty to defend.
    CONCLUSION
    We hold that both the 104(e) Letter and the General
    Notice Letter were “suits” within the meaning of the Policies.
    In addition, the letters alleged facts sufficient to alert
    Anderson to its potential liability for environmental
    contamination under CERCLA. We therefore hold that St.
    Paul breached its duty to defend Anderson. We also affirm
    the attorney’s fee award in Anderson’s favor in light of our
    holding on the merits.
    AFFIRMED.
    14
    Significantly, St. Paul does not argue that the type of releases that the
    EPA alleges to have occurred at Anderson’s properties would not be
    potentially covered under the policy. Cf. Schnitzer, 
    104 P.3d at 1169
    (insurer argued that the administrative documents in question alleged
    damage only to the insured’s soil, which would not have been covered by
    the policy, instead of damage to the groundwater, which was covered by
    the policy).