Minnesota Insurer Off the Hook in Peru Pollution Case

ST. LOUIS (CN) – The Missouri Supreme Court ruled Tuesday that a Minnesota insurance company does not have to defend a lead mining company from multiple lawsuits in which Peruvian children accuse it of releasing toxic chemicals that permeated their entire community.

Doe Run Resources Corp. was sued in 2007 by more than 25 children, claiming they suffered injuries from toxic pollution released by Doe Run’s smelting plant in La Oroya, Peru.

Each lawsuit is nearly identical and accuses Doe Run of releasing lead, arsenic, cadmium and sulfur dioxide from the plant.

The children claimed these emissions created a dust that seeped into the air and water of their community, “enter[ing] and settl[ing] inside the minor plaintiffs’ houses and…on…[their] furniture, clothing, water, and crops,” court records show.

In response, Missouri-based Doe Run sued four insurance companies in 2010 in St. Louis County Circuit Court, seeking reimbursement of costs for defending against the personal-injury lawsuits.

Minnesota-based St. Paul Fire and Marine Insurance Co. was added to Doe Run’s suit in 2012.

St. Paul denied any responsibility for defending the allegations, claiming coverage was barred under the insurance policy’s pollution exclusion.

The insurance company provided general liability insurance to the lead mining company beginning in December 2005 through November 2007. The policy covered bodily injuries and property damage for any event outside the United States, according to court records.

St. Paul said it also denied coverage under the policy’s “other insurance” provision, which it says releases it from having to provide defense when the policy provides excess, rather than primary, coverage.

The trial court ruled in favor of Doe Run, finding that the pollution exclusion was ambiguous and St. Paul was Doe Run’s primary insurer. It awarded the mining company $2.1 million in damages.

On appeal, St. Paul again made the same two arguments for why it has no obligation to provide any defense to Doe Run: the pollution exclusion is unambiguous and the other insurance provision excludes defense coverage.

Doe Run had argued that the alleged injuries sustained by the Peruvian children were caused by its commercial products, and that because these commercial products – lead or lead concentrates – were not listed in the pollution exclusion, the policy is ambiguous because an insured company would not construe it to exclude the very business operations for which it would need coverage.

However, on Tuesday, Missouri Supreme Court Judge Mary R. Russell sided with St. Paul, finding that lead in its particulate form is unambiguously a pollutant and that the children do not allege any injuries caused by Doe Run’s business products.

Reversing the lower court, Russell rejected Doe Run’s argument that lead is not unambiguously a contaminant or irritant.

“The argument is incorrect. Though lead does have commercial value – particularly to Do Run, a lead mining and smelting corporation – it is undoubtedly an irritant or contaminant when released as particulate matter into the environment,” the judge wrote in a 13-page opinion.

Russell continued, “The plaintiffs allege toxic chemicals are present in the air, water, and surrounding environment and these toxic chemicals are harmful to the individuals who breathe them. These claims certainly allege the existence of an irritant or contaminant under the ordinary meanings of the words; these emissions could be understood to both ‘produce irritation’ and ‘corrupt’ the breathable air, making it ‘unfit for use.’ Accordingly, the toxic emissions expelled from Doe Run’s facilities are unequivocally a pollutant under the plain meaning of the term.”

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