Insurers hit with $9M Doe Run cleanup costs

A group of London insurers must pay Doe Run Resources $5 million for the cost of cleaning up lead contamination around six old lead milling sites in St. Francois County, plus a 10 percent statutory penalty for their refusal to pay and $3.6 million in attorney fees.

St. Louis County Circuit Judge Mark D. Seigel issued the judgment in mid-November, 11 weeks after a jury determined the London Market Insurers are liable for the cleanup costs.

On Aug. 30, after a six-day trial, the jury determined Doe Run’s remediation costs totaled $62.5 million. But Seigel’s judgment reflects the number of years the excess insurance policies were in place. The policies were in place for six years at three sites and for nine years at the other three sites.

Doe Run Resources, operating under the name St. Joseph Lead Co., was covered under the London Market Insurers from 1952 until 1961. (London Market Insurers is listed on the Case.net docket as Certain Underwriters at Lloyd’s London.)

The judge had previously determined that under New York law there was no coverage under the 1958 policies for three of the sites.

“The jury acknowledged a larger sum of damages to Doe Run, but the Court’s prior rulings capped the potential damages. We plan to appeal those rulings,” Halpern, of Abelson | Herron in San Diego, said in an emailed statement in September. The lawyers knew then that the final judgment would be a fraction of the remediation costs.

Eleven jurors signed each verdict.

Doe Run Resources was on the Environmental Protection Agency’s national priorities list in 1992 for contamination at its Big River/Desloge site. The EPA investigated and in 1993 issued an order for Doe Run to remediate the site, the plaintiff’s attorney, Vincent Herron, of Abelson | Herron’s Los Angeles office, told the jury in August when the trial began. Other orders, both unilateral and by consent, were issued in the ensuing years for the other five sites: Bonne Terre, Elvins, Leadwood, National and Federal.

The contamination occurred as a result of wind and water erosion. Chat piles, or piles of ground-up waste from the mining process, tower roughly 300 feet at each of the sites, even though no chat was added to them since the 1930s. During that time, the process of separating lead from rock changed to a wet process, and a finer powdery substance, called tailings, was distributed in tailing ponds or dams. As the tailing ponds dried up, the substance hardened.

Defense attorney John T. Williams, of Hinkhouse Williams Walsh in Chicago, told the jury erosion, and the damage caused by erosion, was an expected occurrence and, therefore, not covered by the policies.

The Doe Run name was in the news this summer when a jury in the city of St. Louis issued a verdict ordering the former owners of the Herculaneum lead smelter to pay 16 plaintiffs $358.5 million in actual and punitive damages. Doe Run Resources is the current owner of the smelter and is not responsible for the verdict.

The case is Doe Run Resources v. Certain Underwriters at Lloyd’s London, 2107CC-00613.