ELR Citation: ELR 21329
No(s). 93-4845 (5th Cir. Jun 29, 1994)

The court holds that under Louisiana law, the owned property and alienated property exclusions in the comprehensive general liability (CGL) insurance policies of a weapons manufacturer that formerly owned a contaminated site bar its claims against its insurers and earlier site owners for indemnification of remediation costs at the site. The court first holds that the district court properly dismissed the manufacturer's claims under the Louisiana Environmental Quality Act (LEQA) against the earlier site owners. The LEQA authorizes a responsible party to bring suit against another responsible party only if the Louisiana Department of Environmental Quality has made a written demand that the would-be defendant take remedial action or has filed suit against that party, neither of which conditions are present here. The court next holds that the manufacturer's remediation costs are not covered by its CGL policies. The policies exclude from coverage damage to property owned by or alienated by the manufacturer, which includes the entire site. Although the groundwater beneath the site may belong to the state and thereby constitute third-party property, the groundwater has never been tested for contamination. Thus, there is no evidence of actual property damage. Without deciding whether groundwater constitutes third-party property or whether coverage is available for the costs of mitigating a threat of harm to third-party property, the court holds that the manufacturer is not entitled to relief for the costs of mitigating any threat of harm to third-party property because it failed to provide any evidence that the cadmium on the property could leach into the groundwater.

Counsel for Plaintiff
Sidney Shushan
Guste, Barnett & Shushan
One Poydras Plaza
639 Loyola Ave., 25th Fl., New Orleans LA 70113
(504) 529-4141

Counsel for Defendants
Dennis Sullivan
Sullivan & Ave
3535 Travis at Lemmon, Ste. 130, Dallas TX 75204
(214) 528-9560

Before POLITZ, Chief Judge, DAVIS and WIENER, Circuit Judges.