Happy 40th B-day To Keene: The Case That Started It All

Forty years ago this past Friday, I was 14-years-old, had a Mike Schmidt poster in my room, played Pac-Mac after school and was a defensive linebacker on the JV football team. [OK, I made that last one up.] 

One-hundred and fifty miles away from my home in Philadelphia, in the nation's capital, the District of Columbia Court of Appeals issued a decision that would have a profound impact on my career and many of those reading this. The court handed down its decision in Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 1034 (D.C. Cir. 1981). The tribunal examined the exposure and manifestation trigger theories and concluded that each one was appropriate, but not exclusive, for purposes of determining which policies were obligated to provide coverage for purposes of asbestos bodily injury: "[I]nhalation exposure, exposure in residence, and manifestation all trigger coverage under the policies. We interpret 'bodily injury' to mean any part of the single injurious process that asbestos-related diseases entail."

Viola. The continuous or triple trigger was born. Keene provided a mechanism for long, and sometimes very long, expired insurance policies to provide coverage for asbestos bodily injury – and then environmental property damage, on the same theory. This led to billions of dollars of exposure for insurance companies. The continuous trigger also spawned numerous other hotly contested coverage issues, including, most significantly, allocation. 

But Keene was more than just one of the first shots – and certainly loudest -- in the environmental coverage wars of the 1980s and 1990s and onward. Keene, and the resulting coverage battles, led to the formation of insurance coverage as a stand-alone practice discipline. Two distinct bars – one representing insurers and one representing policyholders – came to be developed. And with it, insurance coverage became the "us vs. them" culture that persists today.

Keene had another impact. It changed the general thinking of the interpretation of a general liability policy. If asbestos bodily injury and environmental property damage could trigger numerous years of prior coverage – on the basis that bodily injury and property damage were taking place, even if nobody knew it – then maybe this approach could apply to other types of claims. An "all the world's a continuous trigger" though process was developed by those seeking coverage. Whether successful or not, the possible impact of a continuous trigger – or a mechanism of some type to trigger multiple years of coverage -- now plays a part in a variety of claims.    
  
Keene was represented by Gene Anderson and Jerry Oshinsky of Anderson, Kill & Olick and Hal Murray of Clifford and Warnke. I reached out to Jerry, now with Kasowitz Benson Torres LLP in Los Angeles, for a comment on Keene's anniversary.

Jerry shared a remarkable fact about the case: "The real key to understanding Keene," he told me, "is that it is a burden of proof case. In fact, insurers sought U.S. Supreme Court review as to whether placing the burden of proof on the insurers, to prove that injury did not occur during their policy period, violated their due process rights."

Of course, SCOTUS did not take the case. But three of the eight justices considering the cert petition would have granted it.  

Jerry put it very simply: "Keene was the case that transformed insurance into a national pastime. If the Supreme Court had taken and decided national rules on trigger and allocation, how would our legal lives have been affected? We will never know."