Falsified Coal Dust Samples Have Miners Paying Their Own Criminal Defense, Court Rules

A group of coal miners sought insurance coverage for falsified dust reports. The court denied them.
By: | November 10, 2021

Armstrong Coal Company was prepping for a dust level report.

Coal mining, Armstrong’s primary function, is required by the Department of Labor’s Mine Safety and Health Administration to monitor and report dust levels in an effort to prevent miners from contracting black lung.

In 2018, when Armstrong was due for another monitor-and-report checkup, its employees allegedly decided to falsify coal dust samples. The supposed goal was to show Armstrong to be in violation of safety standards and potentially halt production.

But the employees’ actions were caught and questioned.

A criminal case was brought against the Armstrong employees.

In an effort to defer costs, the employees turned to Armstrong’s D&O and liability insurer Arch insurance Company. The policy, they believed, would cover defense costs related to criminal proceedings resulting from an employee’s wrongful act.

However, Arch denied coverage.

The insurer pointed to an exclusion within the policy that explained Arch would not be liable for any claim “arising from, based upon, or attributable to” any discharge (or threat of discharge) of any “pollutant” or any “direction, request or voluntary decision” to test for or monitor any “pollutant.”

Arch determined the coal dust was a “pollutant” and that the criminal proceedings arose from a direction to monitor and test for coal dust. Arch therefore applied the exclusion to deny coverage.

The employees quickly filed suit against the insurer. The district court sided with Arch and granted summary judgment.

In appeals court, the policy language and triggers were reviewed, as well as the pollution exclusion. Through review, the court affirmed the district court’s judgment.

Scorecard: The employees of Armstrong Coal Company will have to defend themselves in criminal court after falsifying dust levels. Arch is off the hook.

Takeaway: Fair and just business dealings will keep your company out of trouble. &

Autumn Demberger is a freelance writer and can be reached at [email protected].

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