Missouri Supreme Court rules in favor of insurer on ‘pollution exclusion’ in Peru mine claims

Source:, November 10, 2017
By: Sam Knef

The Missouri Supreme Court has sided with an insurer that appealed a judgment entered by a St. Louis County judge over pollution claims at a smelting facility in Peru that is owned by a company it covers.
In a unanimous opinion filed Oct. 31, the high court reversed St. Louis County Circuit Judge Thomas J. Prebil’s summary judgment in favor of Missouri-based Doe Run Resources Co., which had sued St. Paul Fire and Marine Insurance Co. for reimbursement of defense costs.
Doe Run had faced a class action on behalf of plaintiffs who claimed injury from toxic pollution released from its metallurgical industrial complex in La Oroya, Peru, the opinion states. Doe Run produces lead and lead concentrate through its mining, milling and smelting operations.
After the class action was voluntarily dismissed, more than 25 minor plaintiffs filed individual suits, each one alleging Doe Run released harmful substances such as lead, arsenic, cadmium and sulfur dioxide into the environment, the ruling states.
Specifically, the suits, identified as the “Reid lawsuits,” alleged that emissions created a dust that permeated the air and water and settled inside their homes, on furniture, clothing and in water and on crops. The litigation is ongoing, the ruling indicates.
St. Paul had denied defense coverage to Doe Run, arguing that coverage was barred under the insurance policy’s “pollution exclusion.”
However, Prebil had found that the pollution exclusion was “ambiguous and unenforceable,” the ruling states.
In an opinion written by Justice Mary R. Russell, the high court disagreed, finding that St. Paul’s pollution exclusion “unambiguously bars coverage” and the insurer does not have a duty to defend Doe Run for the Reid lawsuits.
“The effect of the pollution exclusion is clearly to proscribe the types of claims raised in the Reid lawsuits,” the opinion states. “The basic allegations are clear: toxic substances were in the air surrounding the La Oroya facility; these substances harm people who breathe them; and plaintiffs breathed this impure air. There is no question this type of pollution is the exact type of damage excluded from coverage under St. Paul’s policy.”

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