Clean Harbors Inc - Current report filing (8-K)
April 21 2008 - 5:25PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 16, 2008
CLEAN
HARBORS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts
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0-16379
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04-2997780
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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42 Longwater Drive, Norwell,
Massachusetts
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02061-9149
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(781) 792-5000
Not Applicable
(Former name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01
Other
Events.
On April 17, 2008, Clean Harbors, Inc.
(the Company) learned that Pacific Employers Insurance Company (PEIC), a
subsidiary of ACE American Insurance Company, had filed a complaint (the PEIC
Complaint) in the United States District Court for the Northern District of
Illinois ( the District Court) against Clean Harbors Environmental Services, Inc.
(CHES), which is a wholly-owned subsidiary of the Company. Although CHES has
not yet been served in the action, it understands that the suit was filed on April 16,
2008. The PEIC Complaint seeks a
declaratory judgment from the District Court that, under the terms of the
general liability insurance policy which PEIC issued to CHES for the period
from November 1, 2000 to November 1, 2001 (the PEIC Policy), PEIC has
no obligation to defend or indemnify CHES from or against claims allegedly
resulting from any injury alleged in the amended complaint which was filed
against CHES by Mr. Eddie Lopez and Ms. Sandy Lopez in the lawsuit
described below. The PEIC Complaint
alleges that any such injury would have arisen from pollution at a Clean
Harbors facility in Chicago, Illinois (the Chicago Facility) at which the
injury to Mr. Lopez allegedly occurred, and that the pollution exclusion
contained in the PEIC Policy therefore bars coverage for the claims asserted
against CHES in the Underlying Lawsuit.
The Underlying Lawsuit is derived from a
complaint re-filed by Mr. and Mrs. Lopez against CHES on June 30,
2004, which was subsequently removed in 2005 to the District Court, where it
presently is pending (the Underlying Lawsuit). Mr. and Mrs. Lopez filed an amended
complaint on December 3, 2007. The
amended complaint alleges that on or about April 6, 2001, and prior
thereto, Mr. Lopez (who was then employed as a driver by a waste hauler
not affiliated with the Company) was at the Chicago Facility for the purpose of
removing dumpsters containing crushed drums, for delivery to a landfill, and
that, while he was at the Chicago Facility, he was exposed to and inhaled toxic
fumes that were emitted from the dumpsters and thereby sustained severe and
permanent injury to his body, organs and nervous system. The amended complaint
seeks damages in an unspecified amount for personal injury, loss of income and
loss of consortium.
Upon the filing on June 30, 2004 of the complaint
by Mr. and Mrs. Lopez, CHES gave notice to the insurance broker
through which CHES had obtained its insurance program. At the same time, CHES also provided notice
to an affiliate of PEIC, which is the risk management firm that investigates
and processes CHES insurance claims.
The Company believes that the claims against
CHES in the Underlying Lawsuit are defensible on the merits and intends to
vigorously defend the Underlying Lawsuit.
CHES believes that the alleged damages claimed by Mr. Lopez were
not caused by any exposure to toxic chemicals at the Chicago Facility. Rather,
the Company believes the alleged damages claimed by Mr. Lopez were caused
by infectious meningoencephalitis. This belief is based, in part, upon the
diagnosis issued by two of Mr. Lopezs treating physicians and was
affirmed by the plaintiff as part of his workers compensation settlement which
Mr. Lopez reached with his former employer (which resulted in a payment of
$50,000 to Mr. Lopez). In that
settlement, Mr. Lopez relied in part on a report attached to the
settlement from one of his treating physicians, which diagnosed his condition
as likely to be infectious meningitis. Additionally,
two of
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Mr. Lopezs treating
physicians have also testified in deposition that they have diagnosed his
condition as likely to be infectious meningitis.
On March 25, 2008, the District Court vacated
the jury trial date in the Underlying Lawsuit set for April 28, 2008. A status hearing is currently set for April 22,
2008. No new trial date has yet been
set.
Steadfast
Insurance Company (Steadfast), an affiliate of Zurich North America, has provided
an environmental impairment liability insurance policy to CHES. By letter dated
March 28, 2008, Steadfast reserved its rights with respect to its
obligations to defend and indemnify CHES under such policy from and against the
claims asserted against CHES in the Underlying Lawsuit based upon alleged lack
of proper notice. On April 7, 2008,
National Union Fire Insurance Company, which issued an umbrella liability
insurance policy to CHES, excess to the general liability PEIC Policy, also issued
a reservation of rights letter to CHES as to its duty to defend and indemnify
CHES under its umbrella liability insurance policy, based upon a pollution
exclusion and alleged lack of proper notice.
The
Company is now engaged in investigations and ongoing discussions with its
insurance carriers concerning its rights to coverage for any potential
liabilities which may arise out of the Underlying Lawsuit, and the Company
intends to vigorously assert its rights to such coverage based on such
investigations and discussions. However, in the event that the plaintiffs were
to prevail in the Underlying Lawsuit and CHES general liability insurance
carrier, umbrella liability carrier and environmental impairment liability
insurance carrier were to successfully deny coverage, then the Company could be
faced with potential significant liabilities.
In such an event, the Company would vigorously pursue remedies against
various third parties relating thereto.
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SIGNATURES
Pursuant to the requirements of the
Securities and Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
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Clean
Harbors, Inc.
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(Registrant)
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April 21,
2008
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/s/
James M. Rutledge
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Executive
Vice President and
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Chief
Financial Officer
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