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4th Circuit Finds Insurance Carrier Not Liable for Company's Iraq Abuse
The National Law Journal
May 15, 2009
The insurance carrier for a company whose employees are accused of torturing detainees at Abu Ghraib is not obliged to defend the business because the allegations happened in Iraq, outside the coverage area, the 4th U.S. Circuit Court of Appeals ruled Thursday in a split decision.
The company, CACI International, was sued in U.S. District Court for the Eastern District of Virginia in 2004 by two groups of former Iraqi detainees and their survivors who allege CACI employees engaged in torturous behavior at Abu Ghraib and other prisons in Iraq. District Judge Leonie Brinkema ruled in favor of the carrier, St. Paul Fire and Marine Insurance Co., last summer. Hunton & Williams represents the carrier.
A lawyer for CACI, Kelley Drye & Warren partner John Heintz, argued in the 4th Circuit that underlying claims -- including hiring and training issues -- implicate events that happened in the United States and that other claims are covered because they are part of the exception for employees who are away from the coverage area for a short time. Heintz chairs the firm's insurance recovery practice.
Circuit Judge J. Harvie Wilkinson III, joined by Senior Judge David Faber of the Southern District of West Virginia, who was sitting by designation, dismissed CACI's claims in a 16-page opinion.
"We agree with the district court that the underlying complaints cannot be read to allege events that happened in the coverage territory," Wilkinson wrote. "Under well-established principles of insurance law, the place of the injury -- not the place of some precipitating cause -- determines the location of the 'event' for coverage purposes."
Wilkinson further said CACI's presence in Iraq was more than a brief visit. The judge wrote that the "process of interrogation alleged in the underlying complaints is not one that was quickly terminated. Rather, it relied on interrogators who became more skilled as time went by and who came to know the detainees -- and each other -- more personally."
Circuit Judge Dennis Shedd wrote in dissent, saying: "None of the factual allegations in these complaints forecloses the possibility that one or more CACI employees traveled to Iraq for a short time and caused covered injuries to the plaintiffs, a scenario covered by the insurance policies' 'short time' exception." Shedd said that "possibility" requires the appellate court to reverse and remand for further discovery.
Hunton & Williams partner Walter Andrews, who represented the insurance carrier, was not immediately available for comment Friday. Heitz, for CACI, also was not immediately reached for comment.
This article first appeared on The BLT: The Blog of Legal Times.
