$2 Million ‘Rock Fines’ Clean Up Classified as Pollution in Concrete Case

Eastern Concrete operates rock quarries in New Jersey. Its parent company, U.S. Concrete, has its principal place of business in Texas, where two of Eastern Concrete’s officers reside. U.S. Concrete procured a commercial umbrella insurance policy with Great American Insurance Company through a Texas broker. The policy insured Eastern Concrete as well as other subsidiaries. In the summer of 2017, Eastern Concrete accidentally pumped rock fines into Spruce Run Creek and caused physical damage to the stream. The New Jersey Department of Environmental Protection issued violations to Eastern Concrete and required it to remove the rock fines. After Eastern Concrete cleaned up the rock fines,to the tune of over $2 million,  it turned to GAIC for reimbursement under the umbrella policy. GAIC filed a declaratory judgment with the Northern District of Texas that it had no duty to defend or indemnify due to the Policy’s pollution exclusion. Eastern Concrete filed a motion to dismiss on the grounds that Texas had no jurisdiction and that rock fines are not pollution. The District Court confirmed the pollution exclusion applied, and the Fifth Circuit Court of Appeals affirmed their decision. Find out why here.