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Fourth Circuit rules insurer not liable for alleged Iraq abuses by military contractor

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The US Court of Appeals for the Fourth Circuit ruled Thursday that the insurance company for defense contractor CACI International's has no duty to defend or indemnify CACI against claims of torture at Iraq prisons such as Abu Ghraib. CACI conceded that its insurance policy from St. Paul Fire & Marine Insurance Co. generally covered the intelligence contractor only in the US, Canada, and Puerto Rico but argued that its policy covered some claims involving CACI employees who were abroad for a "short time" on business. The Fourth Circuit affirmed a district court decision, writing that St. Paul would have a duty to defend CACI from lawsuits "if there is any potential that the policies would cover the claims alleged in the underlying complaints." The court determined that abuses and injuries alleged in Iraq in two complaints filed against CACI did not occur in the territory CACI's policy covered because "it is the location of the injury - not of some precipitating cause - that determines the location of the event for purposes of insurance coverage." The court also determined that the complaints' allegations "make it difficult to infer that those engaged in activities were present in Iraq only for a few days." Thus, the complaints' allegations "foreclose the possibility of coverage under the territorial provision or 'short time' exception of the policies." In 2003, CACI contracted with the US government to provide intelligence services in Iraq. CACI agreed to interrogate prisoners at Abu Ghraib. CACI took out an insurance policy with St. Paul that indemnified CACI for up to $2 million. In 2004, two groups of former Iraq detainees sued CACI. One complaint alleged CACI engaged in a conspiracy to commit torture, and the other complaint alleged CACI engaged in a "multi-year pattern of criminal conduct." CACI has faced several lawsuits from detainees. In March, a judge in the US District Court for the Eastern District of Virginia ruled that CACI is not immune from a lawsuit brought in 2008 by Abu Ghraib detainees, denying CACI's motion to dismiss.

Full post as published by JURIST - The Paper Chase on May 15, 2009 (boomark / email).