Brownsville mineral company sued by its own insurance carrier

May 3—An insurer to a controversial heavy industrial company located in Brownsville has asked a federal judge to rule that the insurer, The Burlington Insurance Company, is not legally bound to defend the company, Milwhite Inc., against a class-action lawsuit by residents of an adjacent neighborhood.

Burlington's attorneys filed a lawsuit against Milwhite and the 11 plaintiffs in the underlying class action suit in Brownsville federal court on Monday. Burlington argues that under a commercial general liability insurance policy it issued, effective between Oct. 17, 2022, and Oct. 17, 2023, which amended its "insuring agreement" with Milwhite, it has no "duty to defend or indemnify" the company against the plaintiffs' claims in the current class-action suit.

Burlington's amended policy included a "total pollution exclusion." The 11 plaintiffs in the class action suit, all residents of the Rey Jaime neighborhood, filed suit against Milwhite in the 107th state District Court of Cameron County on Nov. 1, 2023, in response to severe air pollution in the form of particulate matter drifting from company's plant at 5487 South Padre Island Highway.

Milwhite, which deals in specialty minerals for industrial applications, in recent years has increased production of the mineral barite, a production surge that has "led to severe air pollution and contamination plaguing and Plaintiffs and putative Class Members, (anyone living within 10 miles of the plant)," according to the suit.

The increased production has coated the Rey Jaime neighborhood, just north of Milwhite, with fine, red barite dust that "poses serious health risks to individuals on a daily basis, forcing them to remain as prisoners in their own homes, which have been detrimentally impacted" by Milwhite's operations, according to the suit.

Investigators with the Texas Commission on Environmental Quality found in February and March 2023 that a sheet-metal wall Milwhite erected to contain the dust was damaged, had several panels missing and was as a result ineffective in protecting residents from the airborne contaminants. In July, TCEQ investigators observed dust from Milwhite impacting nearby properties, recording among the violations the company's failure to contain "fugitive emissions," according to the suit.

In February, the city of Brownsville sued Milwhite after a failed six month effort to prod the company into compliance with the city's code of ordinances and Unified Development Code. The city announced Feb. 20 that it had filed a Chapter 54 lawsuit against the company over public health and safety concerns.

That suit noted that residents of the Rey Jaime neighborhood had complained of "pervasive dust, constant loud noise, declining health, illnesses, discomfort and fear" as a result of Milwhite's operations.

Burlington's lawsuit argues that the exclusions outlined in its policy with Milwhite "preclude coverage for the claims asserted" in the residents' class action suit against Milwhite, and further, that Burlington has no duty to defend or indemnify Milwhite in connection with the claims in the underlying case." Burlington's suit seeks a declaratory judgment from the court that affirms this argument.

Milwhite had not responded to request for comment as of press time.