The aftermath saw more than 35,000 individual plaintiffs and over 250 businesses consolidated into a single state court case in February 2016, as they sought damages not only for the 2015 leak but also alleged previous leaks. Finally, in September 2021, Sempra and SoCalGas reached a groundbreaking $1.78 billion settlement with the consolidated plaintiffs.
The lawsuit against Continental and Associated Electric & Gas Insurance Services Ltd. was initiated in March 2019. Sempra and SoCalGas asserted that Continental owed $50 million in contributions under policies issued by its predecessor. Their claim was that Continental had unreasonably prolonged its investigation and acted in bad faith by refusing to cover the settlement without clearly denying coverage. The insurer’s repeated requests for information that had already been provided and its delayed response to coverage inquiries were among the company’s grievances.
The insurer’s denial was primarily rooted in an unreasonable interpretation of the underlying facts. Between December 2019 and July 2020, Sempra and SoCalGas furnished Continental with statements from “tens of thousands” of plaintiffs, some of whom claimed injuries dating as far back as 1972. Yet, as of October 2020, the insurer persisted in its position that all the underlying claims had arisen from the 2015 leak.
