
USCA1 Opinion

	




                            United States Court of Appeals                                For the First Circuit                                 ____________________      Nos. 96-1788,  96-1789, 96-1790, 96-1791,  96-1792, 96-1793, 96-1794, 96-      1842                                MILLIPORE CORPORATION,                                Plaintiff, Appellant,                                          v.           THE TRAVELERS INDEMNITY COMPANY, HARTFORD ACCIDENT AND INDEMNITY      COMPANY,         and INSURANCE COMPANY OF NORTH AMERICA,                                Defendants, Appellees.                                 ____________________       THE TRAVELERS INDEMNITY COMPANY and INSURANCE COMPANY OF NORTH AMERICA,                               Defendants, Appellants,                                          v.                                MILLIPORE CORPORATION,                                 Plaintiff, Appellee.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. George A. O'Toole, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________            David  A.  Guberman,  with whom  Robert  J.  Muldoon, Jr.,  Nereyda            ___________________              ________________________   _______      Garcia and Sherin  & Lodgen  LLP were  on brief, for  plaintiff-appellant      ______     _____________________      and cross-appellee Millipore Corporation.            Paul Koepff, with whom  Rosemary Boller, James Arbogast,  O'Melveny            ___________             _______________  ______________   _________      &  Myers LLP,  David  Chaffin  and  Hare &  Chaffin  were  on brief,  for      ____________   ______________       _______________      defendant-appellee  and cross-appellant Century Indemnity Company, f.k.a.      Insurance Company of North America.            James L.  Ackerman, with whom  Maura D. Sullivan  and Day, Berry  &            __________________             _________________      _____________      Howard  were on  brief, for  defendant-appellee and  cross-appellant  The      ______      Travelers Indemnity Company.            John P.  Ryan, Robert G.  Eaton and Sloane  & Walsh were on  brief,            _____________  ________________     _______________      for defendant-appellee Hartford Accident and Indemnity Company.                                 ____________________                                     May 30, 1997                                 ____________________                      LYNCH,  Circuit  Judge.   The substantial  costs of                      LYNCH,  Circuit  Judge.                              ______________            remediating  environmental  damage  under  the  Comprehensive            Environmental  Response,  Compensation   and  Liability   Act            ("CERCLA"),  42   U.S.C.      9601   et   seq.,   and   other                                                 _________            environmental  laws  have  pitted  businesses  against  their            insurers  in fierce disputes over who  will bear these costs.            That is the case here.                      Underlying  this  lawsuit is  the  cleanup  of five            hazardous waste  sites, three in Massachusetts and two in New            Jersey.    Millipore Corporation  was one  of the  sources of            waste  at the sites, and  was a defendant  in several actions            alleging violations  of federal and state environmental laws.            Millipore defended  these suits and incurred  liability as to            some  of the  sites.   It may  ultimately be  responsible for            contributing  to the remediation costs of  the other sites as            well.                      The  primary issue  here  is whether  the  district            court  erred in  entering summary  judgment for  the insurers            (and then denying reconsideration) on the ground that none of            Millipore's  CERCLA liability  is  covered under  any of  the            comprehensive  general  liability ("CGL")  policies Millipore            carried  during the  relevant periods.   In  considering this            question, we must address, among other things, the "pollution            exclusion"  provisions  of   the  insurance  policies,  which            preclude  coverage  for pollution-related  claims  unless the                                         -2-                                          2            release of pollutants was "sudden and  accidental."  Based on            recent developments in Massachusetts  environmental insurance            law, we vacate in part the grant of summary judgment.                      We  also conclude  that New  Jersey law  applies to            claims  under policies  issued  to a  New Jersey  corporation            later acquired  by Millipore,  and that summary  judgment was            properly  entered in  favor of  one of  Millipore's insurers,            Travelers  Indemnity  Company,  because  Millipore  failed to            produce evidence of an occurrence within the Travelers policy            period.    Finally, we  hold that  Millipore was  entitled to            summary  judgment   on   the  insurers'   counterclaims   for            reimbursement for defense costs paid to Millipore.                                          I.                      The insurance coverage issues involved in this case            are best understood in context.  CERCLA, which was enacted in            1980, is  the  primary federal  statutory  scheme  regulating            hazardous waste cleanups.  Some states have enacted their own            regimes as well.   CERCLA imposes liability for the  costs of            cleaning up hazardous waste sites and for the loss of natural            resources due to pollution on three categories of potentially            responsible  parties ("PRPs"):  past and  present owners  and            operators  of  hazardous  waste  sites, some  companies  that            transported   waste  to  these   sites,  and  companies  that            generated waste  disposed  of  at  these sites.    42  U.S.C.              9607(a).  Suit may be brought  against a PRP by the federal                                         -3-                                          3            government,  a  state, or  a private  party who  bore cleanup            costs.   Jerry, Understanding  Insurance Law   65,  at 459-60                            ____________________________            (2d ed.  1996).  See  generally Ostrager &  Newman, Insurance                             ______________                     _________            Coverage Disputes,    10.01, 10.02 (8th ed. 1995).            _________________                      CERCLA   creates  novel  forms   of  liability  for            environmental harm.   It is,  in general, a  strict liability            regime.    St. Paul Fire &  Marine Ins. Co. v. Warwick Dyeing                       ________________________________    ______________            Corp., 26 F.3d  1195, 1197-98  (1st Cir. 1994).   The  CERCLA            _____            cost allocation  scheme may operate retroactively  as well: a            PRP may be held  responsible for actions taken  before CERCLA            was enacted and  before the  PRP was aware  that its  actions            might lead to  environmental liability.  Jerry,  supra,   65,                                                             _____            at 459-60.   CERCLA allows joint  and several liability  when            specific  damage cannot  be  attributed  to particular  PRPs,            which is often the case at  hazardous waste sites.  Id.   65,                                                                ___            at 460.1                      Faced with environmental liability, companies began            turning to their third-party liability insurance carriers for            coverage  under CGL  policies.   Comment, The  1970 Pollution                                                      ___________________            Exclusion in  Comprehensive  General Liability  Policies,  24            ________________________________________________________            Duq.  L. Rev.  1083, 1083  (1996).   See generally  Ballard &                                                 _____________            Manus, Clearing Muddy  Waters: Anatomy  of the  Comprehensive                   ______________________________________________________            General Liability Pollution Exclusion, 75 Cornell L. Rev. 610            _____________________________________                                            ____________________            1.  CERCLA  does, however,  create  a right  of contribution.            Id.            ___                                         -4-                                          4            (1990).   CGL policies  are usually occurrence  policies that            protect insureds against most types of risk and are available            for nearly all types of business ventures.  Note, The "Sudden                                                              ___________            and Accidental" Exception  to the Pollution  Exclusion Clause            _____________________________________________________________            in Comprehensive  General  Liability Insurance  Policies,  45            ________________________________________________________            Vand. L. Rev. 161, 163-65 (1992).                      Since 1970, the standard CGL policy has contained a            pollution  exclusion clause  barring coverage  for pollution-            related  damage which should  reasonably have  been foreseen.            Id.  at  167;  see also  Greenlaw,  The  CGL  Policy and  the            ___            ________             _________________________            Pollution Exclusion Clause, 23 Colum. J.L. & Soc. Probs. 233,            __________________________            240-41  (1990).  The provision in general use from 1970 until            1985 excludes coverage for:                      bodily injury or property  damage arising                      out of the discharge,  dispersal, release                      or escape of  smoke, vapors, soot, fumes,                      acids, alkalis,  toxic chemicals, liquids                      or  gases,  waste   materials  or   other                      irritants,  contaminants   or  pollutants                      into or upon land, the atmosphere or  any                      water course or body of water . . . .            Note, supra, at 167.  However, the pollution exclusion clause                  _____            generally  "does  not  apply  if  such discharge,  dispersal,            release or escape is sudden or accidental."  Id.2                                                         ___                                            ____________________            2.  Beginning  in  1970, the  pollution exclusion  clause was            included in CGL  policies as a mandatory  endorsement, and in            1973,  the clause was inserted  into the body  of the policy.            Id.   In  1986,  the  insurance industry  replaced  the  1970            __            pollution  exclusion  clause  with  an   "absolute  pollution            exclusion."  Jerry, supra,   65, at 468.                                _____                                         -5-                                          5                      Based  on  the  language  of  their  CGL  policies,            insurers  developed  a  three-step  process  for  determining            whether  environmental liability  was  covered: "(1)  did  an            'occurrence' occur? . . .  If  so,  (2)  does  the  pollution            exclusion apply, i.e., was the injury or damage caused by one            of the named  materials in  connection with one  of the  four            events ('discharge,' etc.) in the exclusion? . . . If so, (3)            does the  exception  to the  exclusion apply,  i.e., was  the            event 'sudden  and accidental'?"  Jerry, supra,   65, at 463-                                                     _____            64.   The insurers often  argued that claims  based on CERCLA            liability were  precluded from coverage due  to the pollution            exclusion clause.3  As a result, the meaning of the exception            to the  pollution clause, and particularly  the definition of            the term "sudden and accidental," has been hotly contested.                                         II.                      Against this backdrop, the facts are recited in the            light  most favorable  to Millipore,  the party  against whom            summary judgment  was granted.  Soileau v. Guilford of Maine,                                            _______    __________________            Inc., 105 F.3d 12, 13 (1st Cir. 1997).            ____                                            ____________________            3.  Commentators  have  suggested  that  insurers  were  ill-            equipped  to deal with claims based on CERCLA liability.  The            insurance industry did not  foresee the enactment of CERCLA's            retroactive  strict  liability regime;  accordingly, insurers            did not  allocate  financial  resources  for  CERCLA  claims.            Note, supra, at 174-75.  The problem, however, was not merely                  _____            CERCLA's retroactivity.   The risk of  liability under CERCLA            is difficult to ascertain because environmental  damage often            does not  become evident until many years  after the end of a            policy  period.   Id. at  175; cf.  United States  v. Charter                              ___          ___  _____________     _______            Int'l Oil Co., 83 F.3d 510, 516 (1st Cir. 1996).            _____________                                         -6-                                          6                      Millipore is a Massachusetts  corporation primarily            engaged in manufacturing products and providing  services for            the analysis and purification of  liquids.  Millipore has its            corporate headquarters as well as a manufacturing facility in            Bedford,    Massachusetts,     with    other    Massachusetts            manufacturing facilities  in Milford and Taunton.   Millipore            disposed  of its  manufacturing wastes  at several  different            sites   in  Massachusetts,   including  the   Silresim  Waste            Reclamation and  Disposal  Facility in  Lowell,  the  Charles            George  Landfill   in  Tyngsboro,  and   the  Re-Solve  Waste            Reclamation and Disposal Facility in North Dartmouth.                      Between  December 1975  and  March 1982,  Millipore            owned  the  Worthington Biochemical  Corporation,  located in            Freehold,  New Jersey,  which produced  research enzymes  and            related  chemicals.   The  Worthington manufacturing  process            involved   the  use  of   substances  defined  as  hazardous,            including trichloroethylene and freons.  Worthington disposed            of much of  its waste materials at the  Lone Pine Landfill in            Freehold.                      All  four  of  these   sites  where  Millipore  and            Worthington  disposed  of  their  wastes have  a  history  of            contaminating  neighboring  land and  water.   These troubled            sites  share numerous similarities  involving poor design and            sloppy operations.   At  the Silresim site,  chemicals dumped            into the  disposal pit regularly seeped  through the concrete                                         -7-                                          7            lining of the pit into the ground.  In 1973, the Commonwealth            of Massachusetts required the operators of the site to find a            solution to the problem of contaminated runoff.  The landfill            operators  failed  to  do  so, and  also  committed  numerous            violations of state  regulations between 1973 and  1975.  The            Commonwealth  made   continued  operation  of   the  facility            contingent upon  regulatory compliance.  The  operators filed            for bankruptcy, leading to  the revocation of their operating            permit in 1977.   They  abandoned the site  later that  year.            Raging chemical fires swept the site  in October 1977, August            1978, and again in April 1983.                      In 1983,  Millipore received notification  from the            EPA that  it was  a PRP  with respect to  the Silresim  site.            Later that year, in December, Massachusetts initiated a legal            action  in  federal  court  under CERCLA  and  various  state            environmental laws.  See  Commonwealth v. Pace, No. 83-3883-G                                 ___  ____________    ____            (complaint filed in District of Massachusetts).  It sought to            recover cleanup costs from  more than 200 companies that  had            used  the  Silresim  site,  including  Millipore  and  Waters            Associates,  which  Millipore  had  purchased in  1980.    In            December 1983, Millipore was  also named as a defendant  in a            similar  case  brought by  the  federal  government.   United                                                                   ______            States v.  General  Chem. Corp.,  No.  92-10923-T  (complaint            _______________________________            filed  in District  of  Massachusetts).   Shortly thereafter,                                         -8-                                          8            Millipore  and others  paid  the Commonwealth  $2 million  in            settlement,andenteredinto aconsentdecreeinthe federalaction.4                      The operators  of the Charles  George Landfill also            committed   numerous   infractions  of   state  environmental            regulations.  During inspections of  the landfill in 1971 and            1975,  the Commonwealth  discovered leachate5  emanating from            the landfill.   By September 1976,  leachate had contaminated            three of the  four groundwater  basins at the  site, and  the            surrounding  wetlands  were  polluted  by  runoff   from  the            facility.  The  situation was exacerbated  when, on June  12,            1980, a  fire broke out and burned until July 9.  Millions of            gallons of water were poured  onto the landfill to extinguish            the  fire, generating  toxic leachate  and causing  the water            table to  rise temporarily.   In June 1983,  the Commonwealth            filed  suit in state court to  bring landfill operations into            compliance  with  state law.    The  landfill was  ultimately            closed by court order later in 1983.                      The  United  States   and  the  Commonwealth  filed            separate suits  in 1985  against the Charles  George Trucking            Company,  an owner-operator of the landfill, and others.  The                                            ____________________            4.  Other parties  have engaged in  litigation involving this            site as well.  Indeed, one of the two cases recently  decided            by  the Supreme  Judicial Court clarifying  the scope  of the            pollution  exclusion  under  Massachusetts law  involved  the            Silresim site.  See Nashua Corp. v. First State Ins. Co., 648                            ___ ____________    ____________________            N.E.2d 1272 (Mass. 1995).  The case is discussed below.            5.  Leachate  consists of  liquid  byproducts of  the natural            decomposition process of trash in a landfill environment.                                         -9-                                          9            complaints alleged violation of  CERCLA and other federal and            state laws, and  sought, among other things, past  and future            costs of cleaning up the landfill.  In 1986, the EPA notified            Millipore  that  it was  a PRP  with  respect to  the Charles            George site, and in  1989 Millipore was added as  a defendant            in two  consolidated cases  in the District  of Massachusetts            entitled United  States v.  Charles George Trucking  Co., No.                     ______________     ____________________________            85-2463-WD, and Commonwealth v. Charles  George Trucking Co.,                            ____________    ____________________________            No. 85-2714.  A  consent decree was ultimately entered  into,            and was upheld  in United States  v. Charles George  Trucking                               _____________     ________________________            Co., 34 F.3d 1081 (1st Cir. 1994).6            ___                      The Re-Solve site operated  as a waste  reclamation            facility from 1956 to 1980 and handled a variety of hazardous            substances.   In October  1958, an explosive  blaze destroyed            much  of the facility.  It eventually re-opened, but from the            early    1970's   on,   the   Massachusetts   Department   of            Environmental Quality Engineering (DEQE) (now  the Department            of  Environmental   Protection)  was  actively   involved  in            monitoring  the  site.   The  EPA  also  eventually began  an            investigation.    The  site   was  a  significant  source  of                                            ____________________            6.  The Charles George site has been at the center of a great            deal of  environmental litigation, both in  federal and state            court.   See, e.g., United States v.  Charles George Trucking                     _________  _____________     _______________________            Co., 823 F.2d  685 (1st  Cir. 1987); Hussey  Plastics Co.  v.            ___                                  ____________________            Continental  Cas. Co.,  No.  90-13104-WD (D.  Mass. Jun.  17,            _____________________            1993); Landauer Inc.  v. Liberty  Mut. Ins.  Co., 628  N.E.2d                   _____________     _______________________            1300 (Mass. App. Ct. 1994); Roche Bros. Barrell & Drum Co. v.                                        ______________________________            Employers Fire Ins.  Co., No. 91-6120 (Mass. Super.  Ct. Jan.            ________________________            13, 1994).                                         -10-                                          10            pollution.   The sides of the  waste lagoons at the site were            not effectively sealed, which allowed pollutants to seep out.            In addition,  rain routinely  caused the lagoons  to overflow            into the neighboring  wetlands.  Millipore  was named a  PRP,            and  the United States filed  a CERCLA action  to recover the            costs  of cleaning up the site, naming as defendants some 225            companies, including  Millipore, which had sent  waste to the            facility.  In 1988, Millipore entered into a consent decree.7                      At  the  Lone Pine  Landfill  in  New Jersey,  rain            regularly caused  contaminated runoff to  drain directly into            the  nearby  Marasquan River.    Toxic  waste  was buried  in            unlined  pits,  which  allowed seepage  into  the surrounding            soil.   In  addition,  decomposing  garbage routinely  caused            fires  and even  explosions.   After  a particularly  harmful            chemical  fire  in 1978,  New Jersey  environmental officials            issued an administrative order to mitigate the damage.  After            non-compliance  with  the  order,  the  landfill  was ordered            closed the  following year.   Millipore and  Worthington were            each designated as a  PRP, in 1985 and 1990 respectively.  In            1989, Millipore  and the  EPA entered into  a consent  decree                                            ____________________            7.  Other litigation involving this site included Hazen Paper                                                              ___________            Co.  v. United States Fidelity & Guaranty Co., 555 N.E.2d 576            ___     _____________________________________            (Mass. 1990) and  General Chemical v.  First State Ins.  Co.,                              ________________     _____________________            No.  90-5855 (Mass. Super. Ct. Sept. 18, 1992).  In addition,            Highlands  Insurance  Co. v.  Aerovox  Inc.,  676 N.E.2d  801            _________________________     _____________            (Mass.  1997),  the  second  of  the  two  recent  SJC  cases            explaining the scope of  the pollution exclusion clause under            Massachusetts law,  concerned the Re-Solve site.   Aerovox is                                                               _______            discussed later in this opinion.                                         -11-                                          11            involving on-site remediation, and in 1991, Millipore and the            EPA entered  into a second consent  decree involving off-site            remediation.                      There  were  also  environmental  problems  at  the            Worthington  plant itself.  In  1976 or 1977,  a freeze drier            line at the plant  ruptured, causing no more than  60 gallons            of trichloroethylene to be released into drains leading to an            on-site  wastewater  treatment  facility.   From  there,  the            trichloroethylene evidently  made its  way into the  soil and            groundwater and migrated off site.                      Millipore sold Worthington's assets in 1982 to Flow            General, which in 1983 sold  the assets to Cooper BioMedical,            Inc.   In 1986, Cooper performed  an environmental assessment            which disclosed trichloroethylene contamination.  Cooper took            remedial  measures, and  in 1990  instituted a  CERCLA action            against Millipore, seeking reimbursement for costs associated            with the cleanup.                      As   to  each  of  these  sites,  Millipore  sought            coverage under its CGL policies and  those of Worthington and            Waters, two potentially liable subsidiaries.  Where, as here,            CERCLA liability  arises out of  a PRP's operations  over the            course of  many years, it often  implicates general liability            policies issued  by several  different insurers.   Ostrager &            Newman, supra,     10.01,  at  404.   A  Travelers  Indemnity                    _____            Company policy issued  to Millipore covered  damage occurring                                         -12-                                          12            between  April 1975 and July  1976.  A  Hartford Accident and            Indemnity  Company policy issued  to Millipore covered damage            occurring  between July  1976 and  May 1977.   Hartford  also            issued a general liability policy covering the period between            August  1974   and  May   1977  to  Worthington   Biochemical            Corporation; Millipore  purchased Worthington  in 1975.   And            Hartford issued two one-year  liability policies covering the            period  between  January  1975  and January  1977  to  Waters            Associates, a Massachusetts company purchased by Millipore in            1980.   Finally, Insurance Company of  North America ("INA")8            issued eight general liability policies to Millipore covering            the period between May 1977 and January 1986.                      The  Hartford  and   INA  policies  contained   the            standard pollution clause, quoted above,  generally contained            in CGL  policies between 1970 and 1985.   The language of the            pollution exclusion  provision  in the  Travelers  policy  is            somewhat  different  in  ways  we need  not  address  at this            juncture.9                                            ____________________            8.  Century Indemnity is  the successor to  INA, but in  this            opinion we refer to the company as INA.            9.  The Travelers  policy states that the  insurance does not            apply:                      to bodily injury or  property damage arising out of                         _____________     _______________                      any emission, discharge, seepage, release or escape                      of any  liquid, solid, gaseous or  thermal waste or                      pollutant                           (i)  if  such  emission,  discharge,  seepage,                           release   or  escape  is  either  expected  or                                         -13-                                          13                      Millipore sent notice to the insurers regarding the            Silresim site in 1983, the Re-Solve site in 1984, the Charles            George and  Lone Pine sites in  1989, and the Cooper  site in            1990.     The  insurers   responded  that  they   planned  to            investigate whether Millipore's claims were covered under its            CGL policies.  In September 1990, INA acknowledged receipt of            Millipore's notice of loss  for the Cooper facility (formerly            the Worthington  plant)  and paid  Millipore a  share of  the            defense costs  in  the underlying  litigation, but  expressly            reserved all rights  under the policy.10   Millipore and  its            insurers then  disagreed about payment of  the costs incurred            by Millipore  in litigating  the underlying action  involving            the Charles  George site.   After lengthy  negotiations, they            entered  into an  interim  agreement in  January 1993,  under            which  the insurers would pay the  defense costs but reserved            the right to  seek reimbursement if  it was later  determined                                            ____________________                           intended from the standpoint of any insured or                                                               _______                           any person or organization  for whose acts  or                           omissions any insured is liable, or                                         _______                           (ii) resulting  from or contributed  to by any                           condition  in  violation of  or non-compliance                           with  any governmental rule, regulation or law                           applicable thereto . . . .            10.  INA forwarded $3,682 to  Millipore to pay for  its share            of the  cost  of  defending  the suit  involving  the  Cooper            facility; the  payment was accompanied by  a letter reserving            the right to reimbursement.                                         -14-                                          14            that they had  no duty  to defend  or indemnify  Millipore.11            Apparently, the  insurers paid  no defense costs  relating to            the other three sites.                      Millipore brought suit against the insurers in five            separate federal  court actions,  one for each  site, seeking            the  full   costs  of   defending  the   underlying  actions,            indemnification for its liability, and damages for unfair and            deceptive insurance practices.  All three insurers were named            as defendants in the cases involving the Silresim and Charles            George  sites.  INA and Hartford were the named defendants in            the cases involving the Lone Pine and Cooper sites, while INA            was  the only defendant named  in the case  involving the Re-            Solve site.  Otherwise,  the pleadings in all five  cases are            substantially identical.12                      The insurers responded that the pollution exclusion            provisions  in the insurance  policies defeated  coverage and            counterclaimed for reimbursement of the defense costs already            paid to  Millipore for the  Charles George and  Cooper sites.                                            ____________________            11.  Under this agreement, INA sent $115,192.10  to Millipore            for  its share  of Millipore's  defense costs,  along  with a            letter  reserving  the  right  to  reimbursement.    INA  had            previously sent $40,844.15   Travelers paid Millipore a total            of $97,922.42  for defense  fees;  accompanying each  payment            were  letters  in which  Travelers specifically  reserved the            right to seek reimbursement.            12.    In  each  complaint,  Count  I  asks  for  declaratory            judgment,  Count II asserts claims under Mass. Gen. Laws chs.            93A and 176D, and Count III alleges breach of contract.                                         -15-                                          15            The cases were  consolidated before  Judge Rya  Zobel in  the            District of Massachusetts.                      In  April 1994,  following  the close  of extensive            discovery, the insurers  moved for partial  summary judgment,            seeking  dismissal  of  Millipore's  claims  for  declaratory            relief.   Judge Zobel granted  the insurers' motion  in March            1995.    She first  rejected  Millipore's  argument that  New            Jersey substantive  law  should apply  to  the sites  in  New            Jersey.  She noted that "[t]he Massachusetts Supreme Judicial            Court has articulated a  clear preference for the law  of one            state to interpret multistate comprehensive general liability            policies," and reasoned that,  "[a]s the place of plaintiff's            incorporation   and  its   principal   place   of   business,            Massachusetts  has  the  most significant  interest  in  this            lawsuit."                      Judge Zobel also agreed with the insurers' argument            that the pollution exclusion  clauses preclude coverage.  She            stated that "a survey of the current caselaw suggests that it            is the initial release, not subsequent leakage or damage from                   _______            that release which  determines the  issue."  She  went on  to            conclude that  "the initial  releases of pollutants  into the            landfills . . . do not fall within the meaning of 'sudden and            accidental'  as defined in  the caselaw," because Millipore's            "waste disposal  practices were a routine  aspect of business            activity."   The case  subsequently was transferred  to Judge                                         -16-                                          16            George O'Toole when  Judge Zobel became  head of the  Federal            Judicial Center.                      Millipore moved for reconsideration on May 5,  1995            in light  of new Massachusetts caselaw.   On May 2, 1995, the            Supreme  Judicial Court  handed  down Nashua  Corp. v.  First                                                  _____________     _____            State Insurance Co., 648 N.E.2d 1272 (Mass. 1995), construing            ___________________            a pollution exclusion clause in a case involving an insurance            dispute between another company that disposed of waste at the            Silresim facility  and its  liability insurer.   Nashua Corp.                                                             ____________            held that,  notwithstanding the history  of routine polluting            activities by the operator of the Silresim site, the evidence            presented  of a  fire  and subsequent  explosion at  Silresim            defeated the  insurer's motion for summary  judgment based on            the pollution exclusion.  Id. at 1275-76.  The court reasoned                                      ___            that the fire and explosion caused the sudden  and accidental            release of pollutants into  the environment, thus placing the            resulting  damage   into  the  exception   to  the  pollution            exclusion clause.   Millipore argued  that the same  fire and            explosion at Silresim placed  its resulting CERCLA  liability            within the exception to the exclusion as well.                      The   district   court   denied  the   motion   for            reconsideration in  November 1995.   Judge O'Toole  held that            Nashua  Corp. did  not  represent a  change in  Massachusetts            _____________            substantive law  and therefore that  reconsideration was  not            warranted.                                         -17-                                          17                      The  insurers  then moved  for summary  judgment on            Millipore's remaining  claims  and on  the counterclaims  for            reimbursement for  Millipore's defense costs.   The  district            court  dismissed  the  breach   of  contract  and  bad  faith            insurance practices claims.13                      However,  the  district  court  ruled  against  the            insurers on their counterclaims, granting summary judgment in            favor  of Millipore, on the theory that the insurers' duty to            defend is more expansive  than their duty to indemnify.   The            court  reasoned  that  a  finding  that  an  insurer  is  not            contractually  obligated  to indemnify  an  insured does  not            necessarily relieve the  insurer of its duty  to shoulder the            burden of defense, concluding  that the insurers incurred the            defense costs in fulfilling their contractual obligations and            were thus not entitled to reimbursement.                      Millipore now appeals, arguing that New  Jersey law            governs the  two  New Jersey  sites,  and that  under  Nashua                                                                   ______            Corp., the  evidence that  fires and other  accidental events            _____            caused  the  sudden  and  accidental  release  of  pollutants            created a genuine issue  of material fact, making a  grant of            summary judgment  inappropriate.  INA and  Travelers (but not            Hartford)  cross-appeal  from the  district court's  entry of                                            ____________________            13.  The bad  faith insurance practices claims were dismissed            without  prejudice to  their  reinstatement if  the grant  of            partial  summary  judgment  for   the  insurers  were  to  be            reversed;  the   court  evidently  viewed   these  claims  as            derivative of the declaratory judgment action.                                         -18-                                          18            judgment   for   Millipore   on   their   counterclaims   for            reimbursement for defense costs.                                         III.            Choice of Law            _____________                      The parties dispute which state's law applies as to            Counts I and II,14 so we turn  to Massachusetts choice of law            principles.  Spurlin  v. Merchants  Ins. Co., 57  F.3d 9,  10                         _______     ___________________            (1st  Cir. 1995) (forum  choice of  law rules  govern federal            courts sitting  in diversity).  Millipore argues that the law            of New Jersey  should govern  the dispute  involving the  New            Jersey  sites, while  the insurers  contend  that the  law of            Massachusetts  should be  applied to  the entire  case.   Our            review of the district court's choice of law determination is            de novo.  In re  San Juan Dupont Plaza Hotel Fire  Litig., 45                      _______________________________________________            F.3d 569, 576 (1st Cir. 1995).                      The  first  step  in  performing a  choice  of  law            analysis is to determine whether there is  a conflict between            the substantive  laws of  the interested jurisdictions.   New            Jersey insurance  law recognizes  the doctrine of  regulatory            estoppel, which  in this context limits  the applicability of            the   pollution    exclusion   clause   as   a    result   of                                            ____________________            14.  Count   II  alleges   unfair  and   deceptive  insurance            practices  under  Mass.  Gen. Laws  chs.  93A  and  176D, and            therefore the question is not  which state's law applies, but            whether  plaintiff has  created a  genuine issue  of material            fact as to whether  the Massachusetts statutes are applicable            here.   Cf. Roche v. Royal Bank of Canada, 109 F.3d 820, 829-                    ___ _____    ____________________            32 (1st Cir. 1997).                                         -19-                                          19            misrepresentations allegedly made  by the insurance  industry            to  insurance regulators about  the purpose and  scope of the            clause.  Under New  Jersey law, the meaning of  the pollution            exclusion clause  is  limited  by  the  insurance  industry's            official explanation  for its 1970 revisions  to the standard            CGL policy.  Consequently,  the pollution exclusion clause is            construed to  "provide coverage identical with  that provided            under  the  prior occurrence-based  policy,  except  that the            clause  [is] interpreted  to  preclude coverage  in cases  in            which the insured intentionally discharges a known pollutant,            irrespective of  whether the  resulting  property damage  was            intended  or  expected."    Morton  Int'l,  Inc.  v.  General                                        ____________________      _______            Accident  Ins. Co.  of Am.,  629 A.2d  831, 875  (N.J. 1993).            __________________________            Within this  legal framework, Millipore would  be entitled to            coverage for its CERCLA  liability if it could prove  that it            never intentionally discharged a known pollutant.                      In  contrast,  the  pollution  exclusion  clause is            interpreted  much more  expansively under  Massachusetts law.            The  SJC  has  never  recognized  New  Jersey's  doctrine  of            regulatory  estoppel  in  this   context,  and  there  is  no            indication  that  Massachusetts  would  adopt  the  doctrine.            Indeed,  in  Lumbermens  Mutual  Casualty Co.  v.  Belleville                         ________________________________      __________            Industries,  Inc., 555 N.E.2d  568 (Mass.  1990) ("Belleville            _________________                                  __________            I"),  the SJC refused to consider the drafting history of the            _            pollution exclusion clause in  determining the meaning of the                                         -20-                                          20            term 'sudden' in  the clause.   The court  reasoned that  the            term is unambiguous and  therefore that no extrinsic evidence            is necessary  to understand its  meaning.  Belleville  I, 555                                                       _____________            N.E.2d at 573;  see also Polaroid  Corp. v. Travelers  Indem.                            ________ _______________    _________________            Co., 610  N.E.2d 912,  916 n.7  (Mass. 1993)  (striking amici            ___            curiae briefs  solely devoted to discussing  the drafting and            regulatory history of the pollution exclusion clause).  Under            the  Massachusetts interpretation of  the pollution exclusion            clause, Millipore  would need to  make a stronger  showing to            survive a motion for  summary judgment.  There is  a conflict            between   New   Jersey  and   Massachusetts   law  over   the            interpretation of the pollution exclusion clause.                      The  question  becomes whether  the  district court            correctly applied Massachusetts law to the disputes involving            the  New  Jersey  sites.   This  determination  involves  two            distinct analyses,  one for  the policies issued  by Hartford            and INA to Millipore  and the other for the policy  issued by            Hartford   to   Worthington  before   it   was  acquired   by            Millipore.15                                            ____________________            15.  All  of Millipore's potential  CERCLA liability  for the            New  Jersey sites arises out of the actions of Worthington, a            wholly  owned  subsidiary.    A  Hartford  policy  issued  to            Worthington covers these two sites.   INA policies issued  to            Millipore  also provide  coverage  to the  New Jersey  sites,            because these  policies by their terms  extended to Millipore            subsidiaries.   Hartford  also  issued a  policy directly  to            Millipore  during  the  relevant  period.    It  is  unclear,            however, whether  Millipore sought coverage for  liability at            the New Jersey sites  under this policy as well  as under the            policy  issued to  Worthington.   No Travelers  policies were                                         -21-                                          21                      Massachusetts courts take a flexible interest-based            approach  to conflict of laws issues and will consider a wide            variety  of factors in choosing the applicable law.  Cosme v.                                                                 _____            Whitin Mach.  Works, Inc., 632 N.E.2d 832,  834 (Mass. 1994).            _________________________            These  factors   include  those  listed  in  the  Restatement                                                              ___________            (Second) Conflict  of Laws: (1)  the needs of  the interstate            __________________________            and international system,  (2) the policies of the forum, (3)            the  policies  of  other  interested jurisdictions,  (4)  the            protection of justified expectations, (5) the  basic policies            underlying  the  particular  field  of  law,  (6)  certainty,            predictability  and uniformity  of  result, and  (7) ease  of            applicability.  Bushkin  Assocs., Inc. v. Raytheon  Co.,  473                            ______________________    _____________            N.E.2d  662, 669  (Mass. 1985)  (citing Restatement  (Second)                                                    _____________________            Conflict  of Laws    6 (1971)).   They  also include  factors            _________________            proposed    by   conflict    of   laws    commentators:   (1)            predictability, (2) maintaining interstate  and international            order, (3)  simplifying the judicial task,  (4) advancing the            interests  of the  forum, and  (5) applying the  better legal            rule.  Bushkin Assocs., 473 N.E.2d at 670 n.7 (citing Leflar,                   _______________            American Conflicts Law   109, at 195 (3d ed. 1977)).  The SJC            ______________________            has indicated that it "feel[s] free  . . . to borrow from any            of the various  lists to help  focus . .  . attention on  the            considerations particularly  relevant to  the case  . .  . ."            Bushkin Assocs., 473 N.E.2d at 670.            _______________                                            ____________________            involved in the suits involving the New Jersey sites.                                         -22-                                          22                      The polices issued by Hartford and INA to Millipore            are multistate CGL policies.  In addressing the choice of law            issue with respect to such  policies, the SJC has articulated            a clear preference  for looking to  the law of  one state  to            govern  the  interpretation  of  such   multistate  policies.            United Techs. Corp. v. Liberty Mut. Ins. Co., 555 N.E.2d 224,            ___________________    _____________________            227 (Mass. 1990);  W.R. Grace  & Co. v.  Hartford Accident  &                               _________________     ____________________            Indem.  Co., 555  N.E.2d  214, 221  (Mass.  1990).   The  SJC            ___________            reasoned that  the expectations  of the  parties  as well  as            commercial realities  require that  the language in  a single            set of insurance policies should mean the same thing in every            state.  United Techs., 555 N.E.2d at 227 & n.10.                    _____________                      Under Massachusetts law,  one jurisdiction's  rules            of decision must be applied to all of the sites covered under            multistate CGL policies.  Here, the state with  the strongest            interest  in seeing its substantive law applied to all of the            sites is  Massachusetts.  Massachusetts  is Millipore's state            of incorporation and its  principal place of business.   Most            of  the  policies were  negotiated  and  administered in  and            around Boston.  Three of the five sites are in Massachusetts.            We   affirm   the   district  court's   decision   to   apply            Massachusetts law to  the disputes  involving coverage  under            multistate  CGL  policies  issued  directly  to Millipore  of            liability at the New  Jersey as well as at  the Massachusetts            sites.                                         -23-                                          23                      The policy Hartford issued to Worthington before it            was acquired by  Millipore is not, however, a  multistate CGL            policy  and so is not  necessarily governed by  the choice of            law rules  set forth by the SJC  for such policies.  Instead,            we  look  again to  Massachusetts  choice  of law  rules  for            guidance  on  the  issue of  what  law  should  apply to  the            insurance disputes involving this policy.                      An  important consideration  is the  expectation of            the parties  at  the time  the  policy  was issued.    It  is            significant  that Millipore  only acquired  Worthington after            Hartford  had  issued  the  policy under  which  coverage  is            disputed.  At  the time the policy  was issued, Worthington's            principal place of  business was  in New Jersey,  as are  the            covered  sites.     Both   Worthington  and   Hartford  would            reasonably have expected New Jersey law to govern the policy.                      In addition,  New Jersey  has a strong  interest in            the  integrity  of  its  insurance regulatory  process.    In            Morton, the  highest court of  New Jersey evinced  its belief            ______            that  limiting the  scope of  the pollution  exclusion clause            advances that interest.   Morton,  629 A.2d at  875.   Morton                                      ______                       ______            also  indicates  that New  Jersey  public  policy favors  the            protection of New Jersey  insureds, id.; Worthington was such                                                ___            an  insured at the time the  Hartford policy was issued.  New            Jersey thus has a  strong interest in seeing its  law applied            to this controversy.                                         -24-                                          24                      It is true  that applying  New Jersey  law in  this            instance  would not advance  the interest in  uniformity.  At            first blush it may  seem somewhat anomalous to have  the laws            of  different  states   govern  very  similar   CGL  policies            providing coverage  to the same sites.   However, Worthington            and  Millipore  were  unrelated  entities  at  the  time  the            Hartford policy  was issued; the expectations  of the parties            and the  legitimate  interests of  New Jersey  should not  be            defeated by  the fortuity  of the  subsequent  purchase.   We            reverse the district court's decision to apply  Massachusetts            law to the  disputes involving the policy Hartford  issued to            Worthington,  and we hold that New Jersey law applies to that            policy.  Thus, as to  the New Jersey sites covered  under the            policy  Hartford issued  to Worthington,  we remand,  without            further discussion  of the  facts concerning the  releases or            the policy language, for consideration of liability on Counts            I and III under New Jersey law.            Travelers' Coverage Argument            ____________________________                      Travelers'  primary  argument  in  support  of  its            motion  for summary  judgment is  distinct  from that  of the            other two insurers.  This argument involves the first step in            determining whether  CERCLA liability is covered  under a CGL            policy, that is, whether there was an "occurrence" within the            meaning  of the policy.  That  determination is distinct from            the  determination   of  whether  there  was   a  sudden  and                                         -25-                                          25            accidental  event  within   the  meaning  of  the   pollution            exclusion clause:  the  focus in  the  former inquiry  is  on            whether there  was property damage during  the policy period,            while  in  the  latter it  is  on  the  circumstances of  the            release.    Belleville I,  555  N.E.2d  at 571  (noting  that                        ____________            failure to appreciate this  distinction has led to analytical            confusion).                      The language of the  policy states that coverage is            provided for damages  as a result of "bodily injury  or . . .            property damage to which this insurance applies, caused by an            occurrence."   The  policy limits  property damage  to damage            occurring within  the policy  period.  Travelers  argues that            there was no property damage during its policy period.                      The Travelers policy only  insured the Silresim and            Charles George  sites, and only  for the period  lasting from            April 1975  until  July  1976.   Travelers  points  out  that            Millipore seeks  coverage for  damages arising out  of events            taking  place at the Silresim site between 1977 and 1983, and            at  the  Charles  George site  in  1980.   These  occurrences            postdated  the  end  of  the  Travelers  policy  period,  and            Travelers argues that there could  have been no damage during            the policy period.                      The issue is complicated  somewhat by the fact that            Massachusetts has  not yet ruled  on the  proper approach  to            take in  determining whether  there has been  actual property                                         -26-                                          26            damage  during  the  policy period.    This  was  one of  the            questions  certified to  the SJC  in  Belleville I,  but that                                                  ____________            court declined to answer the  question due to an insufficient            factual record, and  the issue remains  open.  Belleville  I,                                                           _____________            555  N.E.2d at 575  & n.9.   The Belleville I  court did note                                             ____________            that there  are five  viable approaches: the  release theory,            the  injury-in-fact theory,  the  manifestation  theory,  the            first discovery theory,  and the  continuous trigger  theory.            Id.  at 575-76.   Here,  we need  not predict  which approach            ___            Massachusetts would adopt, as Millipore has not  demonstrated            that there  were any occurrences during  the Travelers policy            period under any of the possible approaches.                      The insured  bears the burden of  proving coverage,            see,  e.g., United States Liab.  Ins. Co. v.  Selman, 70 F.3d            __________  _____________________________     ______            684, 688 (1st Cir.  1995), and Millipore essentially conceded            at oral argument  that it had not  met its burden  of proving            that any damage occurred  during the Travelers policy period.            Instead, Millipore argued that it should be allowed on remand            to  put  in  additional  evidence of  abrupt  and  unexpected            events, such  as fires,  that occurred before  or during  the            policy  period and  that could  have caused  harm during  the            policy period.16   Millipore, however, had ample  opportunity                                            ____________________            16.  Due to  the retroactive  strict liability nature  of the            CERCLA  regime,  a company  may  be  responsible for  damages            occurring before  it began shipping waste to  a site.  As the            SJC explained in Aerovox:                             _______                                         -27-                                          27            to  create  a  record,  and  there has  been  no  intervening            clarification of  the governing law.   Travelers first raised            the  "occurrence" argument  in its  answer to  the complaint,            putting Millipore  on notice  that it was  contesting whether            there was harm  during the policy period.17   Accordingly, we            affirm the grant of summary judgment in favor of Travelers.            The Pollution Exclusion Clauses Under Massachusetts Law            _______________________________________________________                      To analyze INA and  Hartford's argument, we turn to            the  pollution  exclusion  clause  under  Massachusetts  law,            particularly in light of the recently decided cases of Nashua                                                                   ______            Corp.  v. First State  Insurance Co., 648  N.E.2d 1272 (Mass.            _____     __________________________            1995) and Highlands Insurance Co. v. Aerovox Inc., 676 N.E.2d                      _______________________    ____________            801 (Mass. 1997).  Nashua Corp. was decided after Judge Zobel                               ____________            granted summary  judgment against  Millipore;   Aerovox while                                                            _______            this  appeal was pending.  Prior to Nashua Corp. and Aerovox,                                                ____________     _______                                            ____________________                      [Under CERCLA,] the allocation of damages                      is not differentiated by the time  when a                      particular PRP sent contaminated waste to                      the site or by  the waste of a particular                      PRP.   Thus, the fact that  [the insured]                      did not ship  waste to [the  site] before                      1973,  fifteen years after the fire, does                      not  preclude  the possibility  that some                      fraction of the damages [the insured] was                      asked to pay resulted from the 1958 fire.            Aerovox, 676 N.E.2d at 806.            _______            17.  While it is true  that Travelers erroneously termed this            argument an affirmative defense,  suggesting that it bore the            burden of  proof  on the  issue,  this  area of  the  law  is            sufficiently well  settled that  Millipore should  have known            that  it would have to bear the burden of proving that damage            occurred during the policy period.                                         -28-                                          28            the  SJC  had issued  several decisions  construing pollution            exclusion  clauses  in   insurance  contracts,   establishing            general  principles.   However,  it  was  unclear under  what            circumstances  damage due  to  the release  of pollutants  on            particular occasions  would be  covered under the  sudden and            accidental exception to the pollution exclusion clause if the            insured had also  engaged in pollution-generating  activities            not subject to the exception over a longer period.                      The SJC had ruled that "[t]he sudden event to which            the  exception  in  the  pollution  exclusion  clause applies            concerns  neither the cause of the release of a pollutant nor            the  damage caused  by  the release.   It  is the  release of            pollutants itself  that must  have occurred suddenly,  if the            exception is to apply . . .  ."  Belleville I, 555 N.E.2d  at                                             ____________            571.18   The focus is  therefore on the  circumstances of the            release.  Id.                      ___                      As to the meaning of the term "sudden" the word has            a  temporal element, and so the release of pollutants must be            abrupt (as well as accidental) for there to be coverage.  Id.                                                                      ___                                            ____________________            18.  The  SJC   later   clarified  that   the   circumstances            surrounding the event causing  the release may be informative            in  determining whether  the  release itself  was sudden  and            accidental.  Goodman  v. Aetna  Cas. & Sur.  Co., 593  N.E.2d                         _______     _______________________            233,  235 (Mass.  1992).   This court  later held  that, when            waste is poured directly into the ground (as opposed to first            being placed  in a  container), "the relevant  discharge from            which  the  damage arose  is  clearly the  disposal  of waste            containing hazardous substances into  the landfill."  Warwick                                                                  _______            Dyeing, 26 F.3d at 1204;  cf. Patz v. St. Paul Fire  & Marine            ______                    ___ ____    _______________________            Ins. Co., 15 F.3d 699, 703-03 (7th Cir. 1994).            ________                                         -29-                                          29            at  572.    The  SJC  further   explained  that  a  discharge            continuing over an extended period of time would likely cease            to be sudden.  Liberty Mut. Ins. Co. v. SCA Servs., Inc., 588                           _____________________    ________________            N.E.2d 1346, 1350 (Mass. 1992).                      With  respect  to  the word  "accidental,"  the SJC            ruled  that, even if the insured did not intend the discharge                                     _______            of  pollutants, releases  of  pollutants are  not sudden  and            accidental  when the insured turned the waste over to a waste            processor  who  intentionally   discharged  the   pollutants.            Polaroid  Corp., 610 N.E.2d at 915-16.  This court held that,            _______________            under Massachusetts  law, events  "not  clearly beyond  . . .            long-range  reasonable  expectation[s]" cannot  be considered            accidental.   Lumbermens Mut. Cas. Co.  v. Belleville Indus.,                          ________________________     __________________            Inc., 938  F.2d 1423, 1427  (1st Cir. 1991)  (Belleville II).            ____                                          _____________            The Belleville  II court raised  but declined  to answer  the                ______________            question at the heart of this case: "When, in the  case of an            insured whose  operations involve a  likelihood of continuing            polluting releases, a court  might properly identify a sudden            release so beyond the pale of  reasonable expectability as to            be considered 'accidental,' we need not decide."  Id.                                                              ___                      Relying  on  this  body  of  caselaw,  Judge  Zobel            sensibly  concluded  that  the  exception  to  the  pollution            exclusion clause is not  applicable if the harm is  caused by            waste  intentionally sent  to  a landfill.   However,  Nashua                                                                   ______            Corp.  and Aerovox,  decided after  her decision,  make clear            _____      _______                                         -30-                                          30            that the exception to the pollution exclusion clause may have            some  force  even  in   the  context  of  a  "pollution-prone            industry."  Aerovox, 676 N.E.2d at 806 n.10.                        _______                      In    Nashua   Corp.,    the   SJC    ruled   that,                            ______________            notwithstanding  a company's history  of routinely delivering            hazardous  waste  to a  landfill,  evidence  of a  subsequent            unexpected  and abrupt  release  of a  significant amount  of            pollutants  into  the environment  may  sometimes  defeat the            insurer's motion for summary  judgment based on the pollution            exclusion clause.   Nashua Corp.,  648 N.E.2d at  1276.   The                                ____________            test  set forth  in Nashua  Corp. draws  on the  reasoning in                                _____________            Belleville II and focuses on the whether the triggering event            _____________            is common or uncommon.   Id.  Specifically, the  Nashua Corp.                                     ___                     ____________            court found  that evidence of a  burst tank seal at  one site            and  a   fire  and  subsequent  explosion   at  another  site            (Silresim) created  a genuine  issue of  material fact as  to            whether  the relevant  releases  were sudden  and accidental.            Id.            ___                      The court  in Aerovox reaffirmed the principles set                                    _______            forth  in Nashua Corp.,  explaining that the  test is whether                      ____________            the triggering  event is  "so beyond  the pale  of reasonable            expectability as to  be considered  'accidental.'"   Aerovox,                                                                 _______            676  N.E.2d  at 806  n.10.   Aerovox  further held  that "the                                         _______            insured   must  bear   the   burden  of   proving  that   the                                         -31-                                          31            contamination was caused by a sudden and accidental release."            Id. at 805.19            ___                      Aerovox  focused on  whether  the damage  resulting                      _______            from  a release  which might meet  Nashua Corp.'s  sudden and                                               ____________            accidental test in fact led  to any identifiable damages that            were more than  de minimis.   After Aerovox,  an insured,  to                                                _______            survive a motion  for summary judgment, must "raise a factual            issue as to whether the sudden and  accidental release caused            an appreciable amount  of the  damage for which  it is  being            held liable."  Aerovox, 676 N.E.2d at 806.                           _______                      In light of these intervening cases, we think there            was error  in the denial  of the motion  for reconsideration.            Nashua Corp.  and Aerovox are significant  decisions, raising            ____________      _______            the possibility of at  least partial insurance recovery where            many thought,  based on prior  law, that no  such possibility            existed.  Aerovox  arguably requires a new level of precision                      _______            in proving a causal connection between a particular event and            particular damages.  The  parties are entitled to have  their            arguments viewed in this new light.                                            ____________________            19.  Judge  O'Toole   apparently   denied  the   motion   for            reconsideration on  the premise that Judge  Zobel had applied            the  correct  legal  standard  but  had  concluded  that  the            plaintiff's factual showing had been insufficient to defeat a            motion  for summary  judgment.   However,  we understand  the            Zobel opinion differently, as  having been issued before, and            without the assistance  of, Nashua Corp. and Aerovox.   Judge                                        ____________     _______            O'Toole did not have the assistance of Aerovox.                                                   _______                                         -32-                                          32                      The insurers ask  that we  nevertheless affirm  the            grant of summary  judgment based on the factual  record which            was submitted to Judge Zobel  before the clarification of the            law  occasioned by  Nashua Corp. and  Aerovox.   The insurers                                ____________      _______            rely  on the fact  that in Aerovox,  the SJC, as  a matter of                                       _______            state law, granted summary judgment against the insured, even            though the record  was compiled before  that parties had  the            benefit  of the Nashua  Corp. decision.   The  insurers argue                            _____________            with some  merit that  the affidavits submitted  by Millipore            relating to the three Massachusetts sites are no more precise            than  those found wanting by  the SJC in  Aerovox; they argue                                                      _______            with less merit that affidavits Millipore submitted as to the            New Jersey sites suffer from similar weaknesses.                      We   decline  the  insurers'   invitation  for  two            reasons.  The first is that these initial judgments as to the            adequacy of a record  on summary judgment are better  made by            the trial court in  the first instance.  See,  e.g., Vicknair                                                     __________  ________            v. Formosa Plastics Corp.,  98 F.3d 837, 839 (5th  Cir. 1996)               ______________________            (vacating and  remanding for  prudential reasons in  light of            changed law to  afford the trial court the  first opportunity            to apply new law to the  facts of the case); Satcher v. Honda                                                         _______    _____            Motor  Co., Ltd.,  993  F.2d 56,  57  (5th Cir.  1993)  ("The            ________________            district court, with its extensive knowledge of the facts and            proceedings  in this case, is  in a far  better position than            are  we to  address and  to first  apply" new  caselaw.); cf.                                                                      ___                                         -33-                                          33            Thomas v. American Home  Prods., Inc., 117 S. Ct.  282 (1996)            ______    ___________________________            (mem.)  (explaining  the  Court's  practice  of vacating  and            remanding  in light of changed state law).  The second reason            for remand is that we think the better, fairer outcome  is to            permit  the parties to make new submissions, if they wish, in            light  of the  significant intervening  clarification of  the            law.   See, e.g., Naturist Society, Inc. v. Fillyaw, 958 F.2d                   _________  ______________________    _______            1515,  1524 (11th  Cir. 1992)  (finding it  "inapproriate" to            consider parties claims' without further factfinding in light            of newly amended state regulations); Brinley v. Commissioner,                                                 _______    ____________            782 F.2d 1326  (5th Cir. 1986) ("justice requires"  remand to            allow  submission of  additional evidence  in light  of newly            announced legal standard).   The district  court may wish  to            keep  the parties on  a short leash  as to the  timing of any            further  submissions.  We do not suggest that the parties are            entitled to  any more  discovery: after  almost six years  of            litigation, they should know their  cases and be prepared  to            make their best showings.                      We  wish to be clear.   To survive  the motions for            summary  judgment, Millipore  must present  specific evidence            creating a genuine issue  as to whether the incidents  at the            sites  were sudden and accidental  and caused more  than a de            minimis  release of  pollutants  into the  environment.   See                                                                      ___            Aerovox, 676 N.E.2d  at 806.   To the  extent that  Millipore            _______            chooses  to rely on expert  opinions, they must  be more than                                         -34-                                          34            "conclusory assertion[s] about ultimate legal issues."  Hayes                                                                    _____            v. Douglas Dynamics, Inc., 8 F.3d 88, 92 (1st Cir. 1993).  We               ______________________            are "not willing  to allow  the reliance on  a bare  ultimate            expert conclusion to become a free pass to trial."  Id.                                                                ___                      Whether this  partial  victory proves  Pyrrhic  for            Millipore remains  to  be  seen  -- the  costs  of  insurance            coverage litigation  may sometimes outstrip the  small amount            of  damages that an insured may be  able to prove lie outside            the pollution  exclusion clause.   The  parties  may wish  to            consider whether their  best interests lie  in a solution  by            agreement.            Reimbursement for Defense Costs            _______________________________                      Finally,  there are the insurers' counterclaims for            reimbursement  for money  paid to  Millipore for  its defense            costs in the underlying Charles George and Cooper suits.  INA            and Travelers  contend that the district  court's decision to            enter judgment in favor of Millipore on the counterclaims was            based  on the  erroneous assumption  that the insurers  had a            duty to defend Millipore until the  district court issued its            opinion stating that the pollution exclusion clause precluded            coverage here.  The insurers argue that, since they never had            a  duty  to defend  or  indemnify Millipore,  and  since they            reserved  the right  to reimbursement  for any  defense costs            paid to Millipore, they  are entitled to recover in  full the            sums they paid to Millipore.                                         -35-                                          35                      Under  Massachusetts  law,  an  insurer's  duty  to            defend  an  insured  is  more  expansive  than  its  duty  to            indemnify.   Boston  Symphony  Orchestra v.  Commercial Union                         ___________________________     ________________            Ins. Co., 545  N.E.2d 1156, 1158  (Mass. 1989).  The  duty to            ________            defend  is antecedent  to, and  independent of,  the duty  to            indemnify; the  obligation of the  insurer to  defend is  not            determined  "by  reference  to  the facts  proven  at  trial.            Rather,  the duty to defend is based  on the facts alleged in            the complaint . . . ."  Id.                                    ___                      The test  for determining whether an  insurer has a            duty  to defend is well-established.  Whether there is such a            duty is decided by:                      matching  the third-party  complaint with                      the policy provisions: if the allegations                      of   the    complaint   are   'reasonably                      susceptible'  of  an interpretation  that                      they state  or adumbrate a  claim covered                      by the  policy  terms, the  insurer  must                      undertake the defense . . . .            Liberty  Mut. Ins. Co. v.  SCA Servs., 588  N.E.2d 1346, 1347            ______________________     __________            (1992) (quoting Sterlite Corp. v. Continental Cas. Corp., 458                            ______________    ______________________            N.E.2d  338,  340 (Mass.  App. Ct.  1983)).   Another  way of            putting the point is that  there is no duty to defend  if, at            the  time  the  claims  were  advanced,  the  insurer  "could            reasonably have concluded that no aspect of the . . . claims"            fell  within the  scope  of coverage.    Polaroid Corp.,  610                                                     ______________            N.E.2d at 916.                                         -36-                                          36                      We  agree  with   the  district   court  that   the            complaints against Millipore involving the Charles George and            Cooper  sites are  reasonably  interpreted as  stating claims            covered under the INA policies.  The complaints allege claims            pursuant  to  CERCLA and  other  federal  and state  statutes            arising  out of  Millipore's generation  of hazardous  wastes            disposed  of at the Charles  George site and  the spillage of            trichloroethylene  at  the Cooper  site.    These events  are            clearly  occurrences under  the INA  policies, and  while the            resulting damage  is pollution related, it  at least arguably            falls under the exception  to the pollution exclusion clause.            This  conclusion is a corollary of our decision to vacate the            grant of  summary judgment and remand to  the district court.            The possibility of coverage is sufficient to trigger the duty            to defend.  Sterlite Corp., 458 N.E.2d at 341.                        ______________                      Travelers' counterclaim presents  a more  difficult            question, but on balance we  agree with the district  court's            finding  that Travelers had a duty to defend Millipore in the            underlying  Charles George  action.   The  amended complaints            filed  by  the United  States  and  the  Commonwealth in  the            underlying  Charles George  action  allege  that between,  at            least 1971 and 1983,  a landfill was operated at  the Charles            George  site,  and that,  between  at  least 1973  and  1976,            hazardous wastes  were disposed  of there.   Millipore, among                                         -37-                                          37            others,  is  alleged to  have generated  hazardous substances            that were disposed of at the site.                      The  Travelers  policy  provides coverage  for  the            period between April 1975 and July 1976, and thus,  according            to the complaints of the  United States and the Commonwealth,            covers part  of the time  during which hazardous  wastes were            shipped  to the landfill.  The facts alleged in the complaint            raised  the possibility that  some of the  property damage at            the Charles  George site  occurred within the  policy period.            The later determination that Millipore has not met its burden            of  showing an occurrence  during the policy  period does not            negate the duty to defend, which grows out of the allegations            in  the  complaint  against  the insured.    Boston  Symphony                                                         ________________            Orchestra, 545 N.E.2d  at 1158; Nashua Corp.  v. Liberty Mut.            _________                       ____________     ____________            Ins.  Co., 1997  WL 89163  (Mass. Super.  Ct. Feb.  18, 1997)            _________            ("[W]here a complaint is susceptible on its face of a reading            that brings the claim within  the polciy, the insurer  cannot            rely on facts outside  the complaint to justify a  unilateral            refusal  to defend.").    And the  complaints are  reasonably            susceptible to an interpretation  under which the releases of            pollutants were not, in the language of the Travelers policy,            "either  expected  or intended  from  the  standpoint of  any            insured,  or any  person or  organization for  whose acts  or            omissions any insured is liable."                                         -38-                                          38                      It is true  that the Travelers pollution  exclusion            clause also precludes coverage  for damage "resulting from or            contributed  to by  any  condition in  violation  of or  non-            compliance with  any governmental  rule,  regulation, or  law            applicable thereto."  The  government complaints refer to the            Commonwealth's action  against the  operators of  the Charles            George Landfill  for violations  of state  environmental laws            and  regulations, and to  improper disposal  of waste  at the            site.   This raises the distinct possibility that some of the            claims  would  be  precluded  from coverage  on  this  basis.            However,  although the  question is  a close  one, we  do not            believe  that   the  complaints  could  reasonably  have  led            Travelers  to  conclude that  no  aspect of  the  claims fell            within the scope of coverage.  See Polaroid Corp., 610 N.E.2d                                           ___ ______________            at 916.                                         IV.                      The decision  of the district court  is affirmed in                                                              ___________            part,   reversed  in   part  and  remanded   for  proceedings            ____    ___________________       ________            consistent with this opinion.  We affirm the district court's            ruling that Massachusetts law applies to all claims under the            multistate  CGL   policies  issued  directly   to  Millipore.            However,  we hold  that  New  Jersey  law applies  to  claims            brought under the policy  Hartford issued to Worthington, and                                         -39-                                          39            remand  for consideration  of those  claims under  New Jersey            law.                      With  respect  to  the  claims  brought  under  the            multistate CGL  policies  issued  directly  to  Millipore  --            claims which involve all five sites and which are governed by            Massachusetts law -- we affirm the district court's  grant of            summary judgment  in favor  of Travelers  but we reverse  the            grant of summary judgment in favor of INA and Hartford on all            three counts.20   We remand  to allow the  parties to  submit            renewed affidavits  in light of the  standards articulated by            the  SJC in  Aerovox  and Nashua  Corp.   And  we affirm  the                         _______      _____________            district  court's grant  of summary  judgment  in Millipore's            favor  on the  insurers' counterclaims  for reimbursement  of            defense costs.                                            ____________________            20.  We  also reverse with respect to the claims based on the            Hartford policies issued by  Hartford to Waters Associates, a            Massachusetts company acquired by Millipore in 1980.                                         -40-                                          40
