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A natural resources company cannot re-open coverage litigation filed against a Travelers Corp. unit that the Missouri Supreme Court has already ruled upon, a federal appeals court said Thursday, in affirming a lower court ruling.
The operations of St. Louis-based Doe Run Resources Corp., which mines, mills and smelts lead and lead concentrate, include a metallurgical plant in La Oroya, Peru, owned and operated by Doe Run subsidiary Doe Run Peru, according to the ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in Doe Run Resources Corp. v. St. Paul Fire & Marine Insurance Co.
Since 2007, 32 lawsuits have been filed against Doe Run by area residents in Peru who allege the company was responsible for the release of toxic chemicals including lead, arsenic, cadmium and sulfur dioxide into the environment.
Travelers unit St. Paul had issued a general liability policy to Doe Run with consecutive coverage periods from Dec. 31, 2005, to Nov. 1, 2007, that was subject to various exclusions, including a pollution exclusion.
In 2010, Doe Run filed suit against four insurance companies in Missouri state court, then added St. Paul to the litigation in 2012, alleging the insurer had breached its insurance contract and unreasonably refused to pay its claims. It sought a declaration that St. Paul was obligated to provide full coverage for defense costs and expenses in connection with the underlying suits.
The trial court and the Missouri Court of Appeals ruled in Doe Run’s favor but were reversed in 2017 by the Missouri Supreme Court, which ruled that St. Paul’s pollution exclusion “unambiguously” barred coverage, and that it had no duty to defend Doe Run in the underlying litigation.
Nine additional lawsuits were filed against Doe Run after that ruling, including one that charged “negligent performance of a contract or undertaking,” which was based on the allegation that the company had been negligent in performing its services as a contractor for Doe Run Peru.
“Believing that this new claim implicated an exception to the pollution exclusion … Doe Run tendered a claim for defense coverage against St. Paul,” which again denied the claim, the ruling said.
Doe Run filed suit in state court, again asserting claims of breach of contract and an unreasonable refusal to pay and seeking a declaration the insurer had a duty to defend it.
St. Paul removed the lawsuit to U.S. District Court in St. Louis, which granted the insurer’s motion to dismiss and was affirmed by a three-judge appeals court panel.
“Because the parties remained the same between the two actions and there is nothing in the record suggesting that Doe Run did not have a full and fair opportunity to be heard in the prior state action, we conclude, as did the district court, that Doe Run had ‘a full and fair opportunity to litigate’ in the prior action,” the panel said, in affirming the lower court.
Attorneys in the case did not respond to requests for comment.