Smelter Loses Bid to Stay Peruvian Pollution Suit

ST. LOUIS (CN) - The 8th Circuit refused to halt proceedings against the operator of Peruvian smelting facility whose pollution allegedly injured 35 children.

Two St. Louis area nuns filed several complaints in 2008 on behalf of 35 children who allegedly developed lead poisoning from a smelter in La Oroya, Peru, operated by Doe Run Resources and the Renco Group. They say the plant placed La Oroya among the top 10 most polluted cities in the world, with conditions similar to Chernobyl, Russia.

In the meantime, Renco entered into arbitration determine whether Peru is obligated to hold the company harmless and clean up the area.

Doe Run sought to halt the civil lawsuit pending the outcome of that arbitration, but a federal judge refused to enter a stay. A three-judge panel of the 8th Circuit affirmed Tuesday.

"The factual allegation underlying this case is that the defendants negligently operated the facility," Judge Duane Benton wrote for the fcourt. "The factual allegation underlying the arbitration is breach of contract: Renco alleges that Peru breached its duty to defend and indemnify. Courts frequently address indemnification in separate proceedings from those determining liability. Renco asserts that the agreement provides more than mere indemnification because Peru also must step in and defend the claims. Even so, that fact affects damages in the breach of contract suit, but does not preclude the children from continuing this case."

Judges Michael Melloy and Kristine Baker joined the opinion.

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