Gold Coast v. Crum & Forster Spclt, No. 22-60247 (5th Cir. 2023)Annotate this Case
Gold Coast Commodities, Inc. makes animal feed using saponified poultry and plant fats at its Rankin County, Mississippi facility. Because its production process involves, among other things, old restaurant grease and sulfuric acid, Gold Coast is left with about 6,000 gallons of oily, “highly acidic,” and “extremely hot” wastewater each week. The City of Brandon, Mississippi, told a state agency that it believed Gold Coast was “discharging” that “oily, low-pH wastewater” into the public sewers. As a result, the Mississippi Department of Environmental Quality launched an investigation. Two months before the Department’s investigation, Gold Coast purchased a pollution liability policy from Crum & Forster Specialty Insurance Company. After the City filed suit, Gold Coast—seeking coverage under the provisions of its Policy—notified the insurer of its potential liability. But Crum & Forster refused to defend Gold Coast. The insurer insisted that because the Policy only covers accidents. The district court agreed with Crum & Forster—that the City wasn’t alleging an accident.
The Fifth Circuit affirmed. The court wrote that here, the Policy is governed by Mississippi law. In Mississippi, whether an insurer has a duty to defend against a third-party lawsuit “depends upon the policy's language.” The district court found that the “overarching” theme of the City’s complaint, regardless of the accompanying “legal labels,” is that Gold Coast deliberately dumped wastewater into the public sewers. The court agreed with the district court and held that Gold Coast isn’t entitled to a defense from Crum & Forster.