Who gains from saving nature
Ledger 1 : 33 — For each dollar financing nature-based solutions in 2023, about $33 financed activities harmful to nature. (UNEP)
Cases / Insurance declined or withdrawn · United States · 1987–2010

Shell Rocky Mountain Arsenal insurance case

Nature's voice · report
No measurement of the harm done to me here is on record.
Did nature suffer? Not measured.
What the record lacks: 1 none on record · 1 not measured · 3 disputed · 2 unclear See the gaps

Shell Oil's coverage case over the Rocky Mountain Arsenal in Colorado reached a California appeals court in 1993. The court upheld the insurers for policies with pollution exclusions and sent the 'expected damage' question back for retrial.

$2.1bnCleanup paid by the US Army and Shell at the Rocky Mountain Arsenal, 1987–2010
Combined total; the split between the Army and Shell is not given in the source.

Status As of the 1993 appeal ruling, the exclusions were upheld and the 'expected' issue remanded; the final settlement is not confirmed.

What?
Shell Oil sued its insurers over coverage for Rocky Mountain Arsenal liabilities; a California appeals court upheld the insurers for policies with pollution exclusions and remanded the 'expected damage' question. California Court of Appeal (via vLex)
Where?
Rocky Mountain Arsenal, Colorado; coverage case decided by the California Court of Appeal. US Army, Fort Carson
When?
Cleanup 1987–2010; appeal decision on 21 January 1993; jury verdict about 1988 (unconfirmed). California Court of Appeal (via vLex)
Who?
Gained
Lost
Harmed
  • The Arsenal site and its groundwater — Cleanup cost $2.1bn between 1987 and 2010; groundwater treatment continues. US Army, Fort Carson
Why?
The insurers argued that Shell knew or should have known its Arsenal operations created a substantial probability of environmental damage, and relied on pollution exclusions and late notice. California Court of Appeal (via vLex)
How?
Coverage litigation: jury trial, then appeal; the Court of Appeal ruled on the definition of "expect", late notice and the exclusions. California Court of Appeal (via vLex)
6 of 6 questions answered from the record

What happened

The record, in order.

Shell Oil and the US Army paid $2.1bn between 1987 and 2010 for cleanup of the Rocky Mountain Arsenal in Colorado. The site became a wildlife refuge of about 15,000 acres, and groundwater treatment continues, according to the Army.

Shell sued its insurers over coverage for liabilities arising from its Arsenal operations (Shell Oil Co. v. Winterthur Swiss Insurance Co., 12 Cal.App.4th 715). The insurers argued that Shell knew or should have known that its Arsenal operations created a substantial probability of environmental damage, so the damage was expected; they also relied on pollution exclusions and on late notice.

A jury found against Shell. On 21 January 1993 the California Court of Appeal ruled that the definition of "expect" given to the jury was wrong and reversed the judgment in part, remanding the matter. It held that the late-notice defence failed because the insurers showed no actual prejudice. It affirmed the judgment for policies with pollution exclusions, which it held "preclude coverage".

The year of the jury verdict (about 1988) and the final settlement of the coverage dispute are not confirmed.

  1. 1987Cleanup spending by the Army and Shell begins (1987–2010, $2.1bn in total)
  2. 199321 Jan: California Court of Appeal decides Shell v. Winterthur Swiss: exclusions upheld, 'expect' instruction reversed, late notice rejected
  3. 2010End of the period in which the Army and Shell paid $2.1bn for cleanup

What was said

Claims, in the words of those who made them.

“Shell knew or should have known that its Arsenal operations created a substantial probability of environmental damage”

“preclude coverage”

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Was the environmental damage at the Arsenal 'expected' by Shell, defeating coverage?
Company or project
Winterthur Swiss Insurance Co. and other insurers

"Shell knew or should have known that its Arsenal operations created a substantial probability of environmental damage."

California Court of Appeal (via vLex)
Courts
California Court of Appeal

The definition of "expect" given to the jury was wrong; the judgment was reversed in part and remanded.

California Court of Appeal (via vLex)
Do pollution exclusions bar coverage for the Arsenal liabilities?
Company or project
Insurers

Pollution exclusions applied.

California Court of Appeal (via vLex)
Courts
California Court of Appeal

Affirmed the judgment for policies with pollution exclusions, which "preclude coverage".

California Court of Appeal (via vLex)
Did late notice defeat the claim?
Company or project
Insurers

Shell gave late notice.

California Court of Appeal (via vLex)
Courts
California Court of Appeal

The defence failed because the insurers showed no actual prejudice.

California Court of Appeal (via vLex)

How it looked

What was shown, beside what was recorded.

Shown

  • The Rocky Mountain Arsenal has become a wildlife refuge of about 15,000 acres, and groundwater treatment continues.
    US Army · US Army, Fort Carson

Recorded

  • The Army and Shell paid $2.1bn for Arsenal cleanup between 1987 and 2010.
    US Army, Fort Carson
  • The Court of Appeal affirmed the judgment for the insurers on policies with pollution exclusions, rejected the late-notice defence, and reversed in part on the jury's definition of "expect".
    California Court of Appeal (via vLex)

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
No figure published.

Gained elsewhere

Not totalled
Currency: USD · Window: 1987–2010. All figures cover the same period. * Estimate built from cited figures.

Responses on record

  • Winterthur Swiss Insurance Co. and other insurers (1993 (appeal)): Argued that Shell knew or should have known its Arsenal operations created a substantial probability of environmental damage, relied on pollution exclusions, and pleaded late notice. · California Court of Appeal (via vLex)

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

  1. 1993-01-21Outcome not on record
    Shell Oil Co. v. Winterthur Swiss Insurance Co., 12 Cal.App.4th 715
    California Court of Appeal · Appeal · Shell Oil → Winterthur Swiss Insurance Co. and other insurers

    A jury found against Shell. The Court of Appeal held that the "expect" instruction was wrong and reversed in part, rejected the late-notice defence for lack of actual prejudice, and affirmed the judgment for policies with pollution exclusions. The year of the jury verdict (about 1988) and the final settlement are not confirmed. California Court of Appeal (via vLex)

Insurers

  1. 1993In litigation
    Winterthur Swiss Insurance Co. and other insurers (not all named in the record) → Shell Oil
    Stated reason: Expected damage, pollution exclusions and late notice.

    Coverage was precluded for policies with pollution exclusions; the 'expected' issue was remanded; late notice failed. No insurance payment amount is recorded. California Court of Appeal (via vLex)

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

Cleanup paid by the Army and Shell
$2.1bn
1987–2010, combined
Site use today
About 15,000 acres of wildlife refuge
Groundwater treatment continues (US Army)
Insurance money traced to cleanup
None found
The record gives no insurance payment amount

What we don't know

Undisclosed, unproven, untried: recorded as data.
Court ruling exists

Nature

  • Not measured Harm to nature: The record holds no measurement of harm to nature.

Court

  • Unclear Shell Oil Co. v. Winterthur Swiss Insurance Co., 12 Cal.App.4th 715: outcome not on record.

Accounts

  • Disputed Was the environmental damage at the Arsenal 'expected' by Shell, defeating coverage?
  • Disputed Do pollution exclusions bar coverage for the Arsenal liabilities?
  • Disputed Did late notice defeat the claim?

Record

  • Unclear Whether insurers contributed to the $2.1bn cleanup: no insurance payment is recorded.
  • None on record The year of the jury verdict (about 1988) and the final settlement of the coverage case are not confirmed.

Did the harm stop?

Cleanup spending by the Army and Shell ran from 1987 to 2010; groundwater treatment continues, according to the Army.

Who paid?

The Army and Shell paid $2.1bn for cleanup. The record does not show any insurance contribution.

Sources

Voices on record: — Company or project✓ Government and regulators✓ Courts— Press and investigations— Communities and civil society— Researchers

Government and regulators

  1. Rocky Mountain Arsenal overview
    US Army, Fort Carson · n.d.

Courts

Connected cases

Related matters, and cases linked to this one through the same organisations, with the role each played in both.
Terms used on this page

Science and environment

Groundwater
Water held underground in soil and rock, drawn through wells.

Law and courts

Arbitration
A private dispute process in which an appointed arbitrator, instead of a court, decides the case.

Insurance

Underwriter
An insurer, or a person at an insurer, who assesses a risk and decides whether and on what terms to insure it.
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