A natural resources company cannot reopen coverage disputes filed against a Traveler Corp. unit that the Missouri Supreme Court has already ruled on, a federal appeals court said Thursday, upholding a lower court ruling.
The business in St. Louis-based Doe Run Resources Corp., which mines, mills and smelts lead and lead concentrate, includes a metallurgical facility 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 i Doe Run Resources Corp. v. St. Paul Fire & Marine Insurance Co.
Since 2007, 32 lawsuits have been filed against Doe Run by residents of Peru who claim the company was responsible for releasing toxic chemicals including lead, arsenic, cadmium and sulfur dioxide into the environment.
The travel agency St. Paul had issued a general liability policy to Doe Run with consecutive coverage periods from Dec. 31, 2005, to November 1, 2007, which was subject to various exemptions, including a pollution exemption.
In 2010, Doe Run filed suit against four insurance companies in Missouri State Court, then added St. Paul to the lawsuit in 2012, alleging that the insurer had breached its insurance contract and unreasonably refused to pay its claims. It sought an explanation that St. Paul was required to provide full coverage for defense costs and expenses in connection with the underlying proceedings.
The trial court and the Missouri Court of Appeals ruled in Doe Run’s favor but were overturned in 2017 by the Missouri Supreme Court, which ruled that St. Paul’s pollution exclusion “unequivocally” 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 alleging “negligent performance of a contract or undertaking,” which was based on the claim that the company had been negligent in performing its services as a contractor for Doe Run Peru.
“Believing that this new claim constituted an exception to the pollution exclusion … Doe Run filed a claim for defense coverage against St. Paul,” again denying the claim, the ruling said.
Doe Run sued in state court, again asserting claims for breach of contract and an unreasonable refusal to pay and seeking a declaration that the insurer was obligated to defend it.
St. Paul removed the lawsuit to the U.S. District Court in St. Louis, which granted the insurer’s motion to dismiss and was affirmed by a three-judge panel of the Court of Appeals.
“Because the parties remained the same between the two actions and there is nothing in the record to indicate that Doe Run did not have a full and fair opportunity to be heard in the earlier 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, affirming the lower court.
Attorneys in the case did not respond to requests for comment.