An Allegheny County jury found an $80 million global settlement of more than 500 claims relating to the release of radiation at two Armstrong County nuclear facilities was fair and reasonable, paving the way for the insurance company to cover the settlement paid out by two companies that ran the plants.

The insurance company had argued the defendants never should have settled, particularly without the insurer's consent, because the plaintiffs' claims were based on "junk science" and the defendants would have won at trial.

The trial before Judge Robert J. Colville began in earnest Sept. 6 and went to the 12-member jury Sept. 19. They deliberated for two hours before coming back 11-1 with a finding the settlements were fair and reasonable.

The underlying case involved in Babcock & Wilcox v. American Nuclear Insurers has a long and storied past that resulted this month in a three-week trial, consisting mainly of litigators testifying as to why settlements are made and why this one in particular was or was not fair and reasonable.

In 1971, Babcock & Wilcox purchased two nuclear power plants -- one in Apollo, Pa., and the other in Parks Township, Pa., from Atlantic Richfield Co. (ARCO). The seller agreed to indemnify B&W for obligations arising from events before 1971.

In 1994, the parents of Tina Hall, a 24-year-old who died of cancer allegedly from radiation exposure, sued B&W and ARCO along with four other plaintiffs for bodily injury, property damage, medical monitoring and punitive damages.

Over more than a decade, the claims grew to 245 additional personal injury plaintiffs, 100 property damage plaintiffs and several derivative claims from family members. The two companies were insured by American Nuclear Insurers, or ANI.

The insurer initially hired Pepper Hamilton to defend both companies, over the objections of the two companies, which said they may have disputes among themselves as to indemnification of the claims.

A bellwether case of eight plaintiffs was tried in the U.S. District Court for the Eastern District of Pennsylvania in 1998. During pretrial proceedings, the plaintiffs offered to settle the case for $100 million for all claimants, but, according to B&W's court papers, ANI would not entertain the possibility of a settlement.

The jury in the bellwether case awarded the eight claimants $36.7 million. The plaintiffs, who were represented by the late Fred Baron of Baron & Budd, increased their settlement demand to $125 million plus $10 million in punitives. ANI again refused to settle and the parties were ordered to mediation by the judge, according to court documents.

ANI then sued B&W and ARCO in New York regarding its coverage requirements.

In 1999, a Western District of Pennsylvania judge granted B&W and ARCO's request for a new trial, but based on what the companies said were "narrow evidentiary grounds."

"When we tried our case over the last few weeks, that was a significant bone of contention as to the significance of that [bellwether] trial as a predictor of future litigation risk, because ANI's position was the trial was set aside and was not much of a predictor," K&L Gates' Neal Brendel, counsel for B&W in the latest trial, said.

A second trial never happened however, because B&W entered bankruptcy in Louisiana in 2000 because of mounting asbestos claims.

By the time B&W came out of bankruptcy, ANI had allowed B&W to pick separate counsel, so B&W was represented by Paul Hastings and ARCO by Dechert.

Another mediation was held, but ANI was removed for failure to meaningfully participate, according to court papers. ARCO and B&W decided to settle the claims on their own and out of their own pockets.

In 2008, B&W paid $52.5 million and ARCO paid $27.5 million and the two companies settled any claims against one another. The settlement was approved in the Western District in April 2009.

The two companies then looked to be reimbursed by ANI. In 2001, through a declaratory judgment action, Allegheny Common Pleas Court Judge R. Stanton Wettick Jr. determined a total of $320 million in insurance coverage may be available for the Hall family litigation.

In a July 2011 opinion in advance of the B&W trial, Judge Wettick said, "The issue that I address is under what circumstances will a court require an insurance company, whose policy is found to provide coverage, to reimburse an insured that settled the underlying litigation over the objections of the insurance company."

ANI argued the insureds needed to prove bad faith, where the insureds argued the settlement just had to be fair and reasonable. Judge Wettick sided with the insureds.

An attorney for ANI, Jon Hogue of Murray Hogue & Lannis in Pittsburgh, did not return a call for comment. The company was also represented by attorneys at Simpson Thacher & Bartlett. James A. Dattilo of Dattilo & Associates in Pittsburgh represented ARCO.

He said the case is not over yet, "but the verdict puts B&W and ARCO in a much better position." B&W and ARCO filed post-trial motions Thursday seeking more than $11 million in prejudgment interest.

Mr. Brendel said they would also be seeking attorney fees and costs that hadn't already been paid by ANI. The insurer had paid $44 million to cover some of Paul Hastings and Dechert's fees and costs, but the insurer had refused to pay for anything related to the bankruptcy or settlement negotiations, Mr. Brendel said.