Cases & Deals

Schnitzer Steel Industries and MMGL win unanimous federal jury verdict against Continental Casualty Company and Transportation Insurance Company

Clients Schnitzer Steel Industries, Inc. and MMGL Corp.

Jones Day won a unanimous jury verdict and equitable award for Schnitzer Steel Industries, Inc. and MMGL Corp. (formerly known as Schnitzer Investment Corp.), in a two-week jury trial held in the United States District Court for the District of Oregon (Portland). The jury returned a unanimous verdict in favor of plaintiffs Schnitzer Steel Industries, Inc. and MMGL Corp. (formerly known as Schnitzer Investment Corp.) and against defendants Continental Casualty Company and Transportation Insurance Company in the amount of $8,601,700 on April 24, 2014. The Schnitzer plaintiffs claimed that its insurers had breached the insurance contract by reimbursing defense costs at unreasonably low rates, by reimbursing on a habitually late basis, and by refusing to reimburse entirely for some claimed defense costs. A large percentage of the unreimbursed defense costs had been incurred by Schnitzer's environmental defense counsel, who are defending Schnitzer against Superfund claims at the Portland Harbor Superfund Site.

On June 18, 2014, the District Court denied post trial motions and on June 19, 2014 entered a judgment in the amount of $11,065,567, which includes prejudgment interest of $2,463,867 million. In addition, the underlying proceeding (at the Portland Harbor) is still pending. For the purpose of prospective relief, the District Court exercised its equitable power to grant broad declaratory and future relief to the Schnitzer parties, including the following terms:

• Continental is jointly and severally liable for Schnitzer's defense costs;
• Continental must pay promptly and in no event later than 90 days;
• Continental must implement a reasonable process for the review, submission and payment of defense costs;
• Continental must reimburse standard rates of Schnitzer's defense counsel;
• The parties designate officers to whom communications on defense costs should be sent; and
• A Special Master will be appointed to hear disputes on an annual basis, unless the parties agree to some other ADR

The Jones Day team representing Schnitzer was led by John Iole (partner), and included Rebekah Kcehowski (partner) and Allison Parker (associate), all in Jones Day's Pittsburgh office.

Schnitzer Steel Industries, Inc. et al v. Continental Casualty Company et al., Case 3:10-cv-01174-MO (D. Oregon)

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