IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

CHEMTURA CORPORATION,
Plaintiff,

)

)

)

)

v.. ) C.A. N0. N14C-12-2l0 MMJ CCLD
)

CERTAIN UNDERWRITERS AT )
LLOYD’S, et al., )
)
Defendants. )

Submitted: July 13, 2016
Decided: July 20, 2016

ORDER GRANTING LEAVE TO APPEAL
_F_ROM INTERLOCUTORY ORDER

David J. Baldwin, Esq., Michael B. Rush, Esq., Potter Anderson & Corroon LLP,
Helen K. Michael, Esq., Erica J. Dominitz, Esq., Kilpatrick Townsend & Stockton
LLP, Attorneys for Plaintiff Chemtura Corporation

John S. Spadaro, Esq., John Sheehan Spadaro, LLC, Stephen T. Roberts, Esq.,
Th0mas J. Quinn, Esq., Alexander Mueller, Esq., Mendes & Mount, LLP,
Attorneys for Defendants Certain Underwriters at L10yd’s London and Various
London Market Insurance Companies

JOHNSTON, J.

Defendant Certain Underwriters at Lloyd’s of London Subscribing to Policy
Numbers K.1l555, et al. applied under Rule 42 of the Supreme Court for an Order
certifying an appeal from two interlocutory rulings of this Court. The Opinion
dated April 27, 2016 granted Plaintiff’ s Motion to Determine Applicable Law
Regarding Allocation, and denied Defendants’ Cross-Motion for Choice of Law
Determination. The June 20, 2016 Order denied Defendants’ Motion for
Reargument. The Court finds that these holdings decide a substantial issue of
material importance that merits appellate review before a final judgment.

l. The determination of whether to certify an interlocutory appeal lies
within the discretion of the Court and is analyzed under the criteria set forth in
Supreme Court Rule 42(b). When deciding whether to certify an interlocutory
appeal, the Court must consider: (1) the eight factors listed in Delaware Supreme
Court Rule 42(b)(iii); (2) the most efficient and just schedule to resolve the case;
and (3) whether and why the likely benefits of interlocutory review outweigh the
probable costs, such that interlocutory review is in the interests of justice. If the
balance of these considerations is uncertain, the trial court should refuse to certify
the interlocutory appeal.

2. By Opinion dated April 27, 20l6, this Court heldi

There are two locations at issue in this case: Arl<ansas and Ohio. The

risk in question is the responsibility for the environmental remediation

costs. Arkansas and Ohio have the most significant relationships to
the environmental contamination and remediation. No other state has

2

a more significant relationship under [Restatement (Second) of
Conflict of Laws] Section 193.

Insurers’ reliance on case precedent involving nationwide products
liability claims, and overwhelming corporate neXus, is misplaced.
This case is an environmental dispute stemming from contamination
at two locations. lt is not a nationwide products liability case.
Further, no state has such an overwhelming corporate nexus to
overcome the law of the site presumption.

Therefore, the Court finds that Restatement (Second) of Conflict of

Laws Section l93_the law of the site_applies. Additionally,

considering the Section 188 and Section 6 factors, the Court finds that

Arkansas and Ohio, the states with environmental contamination sites,

have the most significant relationships.l

3. On May 4, 2016, Defendants moved for reargument. On June 20,
2016, the Court denied Defendants’ Motion for Reargument.

4. Defendants argue that interlocutory appeal pursuant to Supreme Court
Rule 42 is justified for several reasons. First, Defendants contend that the Court’s
choice-of-law ruling determines a substantial issue of material importance, as is
reflected by the Courts acknowledgment in the April 27, 2016 Opinion that this
ruling is "essentially case dispositive."z Defendants argue that the choice-of-law
principles to be applied on allocation of damages among Chemtura’s insurance

policies is a core issue in this case and is of critical importance,

5. Second, Defendants assert that pursuant to Supreme Court Rules

1 Chemtura Corp. v. Certain Underwriters at Lloyds, C.A. No. Nl4C-l2-2l() MMJ CCLD (Del.
ZSuper. Apr. 27, 2016) (Trans. lD 58919422).
Ia'.

42(b)(iii)(G) and (H), a review of the April 27, 2016 Opinion may terminate the
litigation or may otherwise serve considerations of justice. Defendants contend
that if the Supreme Court definitively decides the choice-of-law issue at this stage,
considerations of justice will be served because a central legal issue will be
resolved and the parties and the Court will not have to spend time and resources to
prepare that issue for trial. Further, Defendants argue that interlocutory review of
the April 27, 2016 Opinion will serve considerations of justice by potentially
providing a framework for and fostering of settlement discussions.

6. Finally, Defendants argue that pursuant to Supreme Court Rules
42(b)(iii)(B), a review of the April 27, 2016 Opinion would resolve a conflict
among the trial courts. Defendants contend that there is a conflict among
Delaware trial court decisions when applying the Restatement factors under
Sections 6, 188, and 193 to resolve choice-of-law issues in environmental coverage
disputes. In its choice-of-law analysis, this Court adopted the Section 193 "law of
the site" test. The Court held that no state had an overwhelming corporate nexus
that could overcome the law of the site presumption. Defendants argue that the
Court distinguished a line of cases3 because they involved bodily injury resulting

from nationwide products liability claims. Defendants contend that this distinction

3 Liggett Grp. Inc. v. Ajj‘iliated FMIns. Co., 788 A.2d 134 (Del. Super. 2001); Shook & Fletcher
Asbestos Settlement Trust v. Safety Nat’l Cas. Corp., 2005 WL 2436193 (Del. Super.), a]j"d, 909
A.2d 125 (Del. 2006); Hoechst Celanese Corp. v. Nat’l Um'on Fire Ins. Co. of Pz`ttsburgh, Pa.,
1994 WL 721651 (Del. Super.),

4

between environmental claims and bodily injury claims did not exist in the case
law prior to the Court’s ruling in this case. Accordingly, Defendants argue that the
Delaware Supreme Court’s guidance is needed to resolve the conflict among the
trial courts.,

7. Plaintiff agrees that certification of the interlocutory appeal is
appropriate in this case. Plaintiff states that the Court’s choice-of-law
determination presents a substantial issue of material importance because it
resolves a critical core issue for determining the scope of insurance coverage
obligations.

8. Plaintiff also is in agreement with Defendants that pursuant to
Supreme Court Rules 42(b)(iii)(G) and (H), an immediate appeal would serve
considerations of justice. Plaintiffs also contend that resolution of the choice-of-
law issue, which is central to the case, will promote judicial efficiency and other
interests of justice by promoting settlement discussions. Plaintiffs argue that
interlocutory review, which will resolve the parties’ choice-of-law dispute, will
outweigh the costs of such an interlocutory appeal.

9. Although Plaintiff agrees that interlocutory review is appropriate in
this case, it disagrees with Defendants’ contention that the Court’s April 27, 2016
Opinion created a conflict among trial court decisions regarding a question of law

that warrants appellate review. Plaintiff argues that the Court properly applied the

law of the site presumption established by Restatement (Second) Section 193 and
followed Delaware case 1aw4 that applied the law of the site presumption in other
environmental coverage disputes. Plaintiff contends that it was proper for the
Court to distinguish between bodily injury resulting from nationwide products
liability claims and from contaminated real property claims, because bodily injury
claims do not involve a risk located principally in any particular state that could
give that state a paramount interest in the resolution of a coverage dispute.

lO. The Court finds that the April 27, 2016 Opinion decided a substantial
issue of material importance that merits appellate review before a final judgment.
The Court determined that Section 193_the law of the site-applies
Additionally, upon consideration of the Section 188 and Section 6 factors, the
Court held that Arl<ansas and Ohio, the states with environmental contamination
sites, have the most significant relationships.

ll. The Court next considers the eight factors listed in Supreme Court
Rules 42(b)(iii)(A)-(H). The Court finds that its ruling_applying the law of the
site presumption established by Restatement (Second) Section 193-is consistent
with prior Delaware case law.5 No conflict between the decisions of the trial

courts exists to justify certifying an interlocutory appeal in this case on this ground

4 Burlington N. R.R. Co. v. Allianz Underwrz`ters Ins. C0., 1994 WL 637011 (Del. Super.); Clark
Equip. Co. v. Liberty Mut. Ins. C0., 1994 WL 466325 (Del. Super.); Chesapeake Utilities Corp.
v. Am. Home Assurance Co., 704 F.Supp. 551 (D. Del. 1989).

5 Del. supr. cr. R. 42(1>)(111)(/>,).

alone.6 The interlocutory rulings do not construe a statute.7 Jurisdiction is not
disputed.$ No prior decision or judgment has been reversed.g

12. However, the Court finds that interlocutory review may terminate the
litigation or otherwise serve considerations of justice.m The choice of law
determination is central in this case because it determines the scope of Defendants’
insurance coverage obligations. Because this issue is essentially case dispositive,
interlocutory review may terminate the litigation. The parties agree that
interlocutory review will promote judicial efficiency by furthering settlement
discussions in a more timely manner.

13. The Court finds that interlocutory review will be the most efficient
and just way to proceed with the instant case. The benefits of appellate review_
termination of the case and/or fostering settlement discussions_outweigh the
probable costs, such that interlocutory review is in the interests of justice.

IT IS ORDERED that the Court’s April 27, 2016 Opinion and June 20,
2016 Order are hereby certified to the Supreme Court of the State of Delaware for

disposition in accordance with Rule 42 of that Court.

  
 

ary M. Johnston\

6 D@i. supr. ct R. 42@>)(111)(13).

7 Del. supr. cr. R. 4z(b)(iii)(c).

8 D@i. supr. cr. R. 42@)@11)(13).

9 D@i. supr. cr. R. 42(1»)(111)(1~:)_(11).
1° D@l. supr. cr. R. 42(1;>)(111)(0)_(11)_

