Who gains from saving nature
Ledger 1 : 33 — For each dollar financing nature-based solutions in 2023, about $33 financed activities harmful to nature. (UNEP)
Cases / Insurance declined or withdrawn · United States · 1984–1993

Diamond Shamrock Lister Avenue dioxin, Passaic River

Nature's voice · report
Dioxin from the Lister Avenue plant in Newark was discharged into me until at least 1969.
Did nature suffer? Yes. Harm is on record.
Recorded
  • The site in my river became the Diamond Alkali Superfund site.
  • In 2016 the EPA selected dredging and capping for 8.3 miles of my lower stretch, and left the damage to my natural resources outside that decision.
What the record lacks: 2 none on record · 2 insufficient · 1 disputed See the gaps

Dioxin from a chemical plant in Newark, New Jersey, was discharged into the Passaic River until at least 1969. New Jersey courts later found that the plant's insurers owed no coverage for the Newark plant claims.

NoneInsurer payments for the Newark plant claims, per the New Jersey courts
Superior Court ruling 1989; affirmed by the Appellate Division in 1992; review refused by the New Jersey Supreme Court in 1993.

Status As of 2023: New Jersey courts held there was no insurance coverage for the Newark plant claims (1989, 1992, 1993); EPA selected a lower Passaic remedy in 2016; the Maxus liquidating trust settled with YPF and Repsol in 2023.

What?
Dioxin was discharged from the Diamond Shamrock Lister Avenue plant in Newark into the Passaic River. The plant's insurers refused coverage for most of the cost, and New Jersey courts held there was no coverage for the Newark plant claims. The plant has been described as an Agent Orange production site (source not recorded). US Securities and Exchange Commission (EDGAR)
Where?
Newark, New Jersey (Lister Avenue plant) and the Passaic River; insurance rulings by New Jersey courts.
When?
Dioxin discharge until at least 1969; insurance dispute about 1984–1993 (trial ruling 1989, appeal 4 June 1992, review refused 1993); EPA lower Passaic remedy 2016; Maxus settlement 2023. US Securities and Exchange Commission (EDGAR)
Who?
Gained
Lost
Harmed
  • The Passaic River — Dioxin was discharged into it until at least 1969; the river site became the Diamond Alkali Superfund site.
Why?
The insurers' stated ground was that Diamond expected or intended the harm and knew the substances it discharged were harmful, as described in NJDEP filings; the courts' reasoning could not be confirmed.
How?
The sources do not describe how the dioxin reached the river beyond the statement that it was discharged from the plant.
6 of 6 questions answered from the record

What happened

The record, in order.

The Diamond Shamrock plant on Lister Avenue in Newark, New Jersey, discharged dioxin into the Passaic River until at least 1969. The river site became the Diamond Alkali Superfund site. The plant has been described as one where Agent Orange was produced; no source is recorded for that description.

Diamond Shamrock's insurers, Aetna Casualty & Surety together with London-market and excess carriers, refused to provide coverage for most of the cost. The company's successor, Maxus Energy, wrote in its annual report for fiscal 1994 that the insurers "refused to provide coverage for most of Chemicals' or the Company's cost". The insurers' stated ground, as described in later filings by the New Jersey Department of Environmental Protection (NJDEP), was that Diamond expected or intended the harm and knew that the substances it discharged were harmful. The NJDEP described this as the insurers' argument, not a ruling.

In 1989 the Superior Court of New Jersey (Morris County) ruled that there was "no insurance coverage with respect to the claims related to the Newark plant." The ruling was upheld on appeal: Diamond Shamrock Chems. v. Aetna, 258 N.J. Super. 167 (App. Div., 4 June 1992). The New Jersey Supreme Court refused review in 1993 (134 N.J. 481). The insurers paid nothing for the Newark claims. The insurance dispute ran from about 1984 to 1993.

In 2016 the US Environmental Protection Agency selected bank-to-bank dredging and capping for an 8.3-mile stretch of the lower Passaic River, at a stated cost of $1.38 billion and 3.5 million cubic yards of sediment. Natural resource damages were outside that decision.

In 2023 the Maxus liquidating trust settled with YPF and Repsol for $575 million (2 × $287.5 million), about 4% of a $14 billion claim. About $81 million of the settlement was allocated to natural resource restoration in New Jersey, with approval on 1 June 2023.

  1. 1969Dioxin discharged into the Passaic River until at least this year; the river site later became the Diamond Alkali Superfund site
  2. 1984Start of the insurance coverage dispute (duration given as about 1984–1993)
  3. 1989Superior Court of New Jersey (Morris County): no insurance coverage for the Newark plant claims
  4. 1992Appellate Division upholds the ruling (4 June)
  5. 1993New Jersey Supreme Court refuses review
  6. 2016EPA selects bank-to-bank dredging and capping for 8.3 miles of the lower Passaic; $1.38 billion
  7. 2023Maxus liquidating trust settles with YPF and Repsol for $575 million (6 April); about $81 million for New Jersey natural resource restoration, approved 1 June

What was said

Claims, in the words of those who made them.

“refused to provide coverage for most of Chemicals' or the Company's cost”

“no insurance coverage with respect to the claims related to the Newark plant.”

“expected or intended the harm”

The insurers' argument, as described in later NJDEP filings (a party's argument, not a ruling) · Later NJDEP filings; date not stated

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Was insurance coverage owed for the Newark plant claims?
Company or project
Diamond Shamrock / Maxus Energy (insured)

Reported that its insurers "refused to provide coverage for most of Chemicals' or the Company's cost".

US Securities and Exchange Commission (EDGAR)
Company or project
Aetna Casualty & Surety and London-market insurers

Argued that Diamond "expected or intended the harm" and knew the substances it discharged were harmful (as characterised in NJDEP filings; a party's argument).

Courts
Superior Court of New Jersey (Morris County); Appellate Division

1989: no insurance coverage for the claims related to the Newark plant; upheld on appeal on 4 June 1992; New Jersey Supreme Court refused review in 1993.

US Securities and Exchange Commission (EDGAR)

How it looked

What was shown, beside what was recorded.

Shown

  • The company told investors that its insurers had refused to provide coverage for most of the cost, and that the 1989 ruling finding no coverage for the Newark plant claims had been upheld on appeal.
    Maxus Energy Corporation, Form 10-K for fiscal year 1994 · US Securities and Exchange Commission (EDGAR)

Recorded

  • Superior Court of New Jersey (Morris County), 1989: no insurance coverage for the claims related to the Newark plant.
    US Securities and Exchange Commission (EDGAR)
  • Appellate Division, 4 June 1992, 258 N.J. Super. 167: ruling upheld; New Jersey Supreme Court refused review, 134 N.J. 481 (1993).
    vLex
  • The insurers paid nothing for the Newark claims.
    US Securities and Exchange Commission (EDGAR)
  • EPA, 2016: bank-to-bank dredging and capping selected for 8.3 miles of the lower Passaic; $1.38 billion; 3.5 million cubic yards; natural resource damages outside the decision.

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
No figure published.

Gained elsewhere

Not totalled
Currency: USD · Window: . All figures cover the same period. * Estimate built from cited figures.

Responses on record

  • Maxus Energy Corporation (successor to Diamond Shamrock) (Fiscal year 1994): Reported in its fiscal 1994 annual report that the insurers refused to provide coverage for most of the cost, and that the 1989 no-coverage ruling had been upheld on appeal. · US Securities and Exchange Commission (EDGAR)
  • Aetna Casualty & Surety and London-market insurers (Not stated): Argued that Diamond expected or intended the harm and knew the substances it discharged were harmful (as described in later NJDEP filings; the insurers' own statement was not seen).

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

  1. 1989Defendant won
    Diamond Shamrock Chemicals v. Aetna Casualty & Surety (coverage, trial court)
    Superior Court of New Jersey (Morris County) · Civil · Diamond Shamrock Chemicals Co. (insured) → Aetna Casualty & Surety and London-market and excess insurers

    The court ruled that there was no insurance coverage for the claims related to the Newark plant. US Securities and Exchange Commission (EDGAR)

  2. 1992-06-04Defendant won
    Diamond Shamrock Chems. v. Aetna, 258 N.J. Super. 167 (coverage, appeal)
    Superior Court of New Jersey, Appellate Division · Appeal · Diamond Shamrock Chemicals Co. (insured) → Aetna Casualty & Surety and other insurers

    The Appellate Division upheld the 1989 ruling. The full opinion could not be opened, so the exact wording of any holding on knowledge is unconfirmed. vLex

  3. 1993Defendant won
    Diamond Shamrock Chems. v. Aetna, 134 N.J. 481 (petition for review)
    Supreme Court of New Jersey · Appeal · Diamond Shamrock Chemicals Co. (insured) → Aetna Casualty & Surety and other insurers

    The New Jersey Supreme Court refused review. The insurers paid nothing for the Newark claims. vLex

Insurers

  1. 1989Claim refused
    Aetna Casualty & Surety; London-market insurers; excess carriers → Diamond Shamrock Chemicals Co. (later Maxus Energy)
    Stated reason: Argued that Diamond expected or intended the harm and knew the substances it discharged were harmful (as described in NJDEP filings).

    The insurers refused to provide coverage for most of the cost. The Superior Court found in 1989 that there was no coverage for the Newark plant claims; the ruling was upheld in 1992 and review was refused in 1993. The insurers paid nothing for the Newark claims. US Securities and Exchange Commission (EDGAR)

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

Insurer payments for the Newark claims
None
Superior Court 1989; Appellate Division 1992; review refused 1993
EPA-selected remedy, lower Passaic
$1.38 billion
2016; bank-to-bank dredging and capping, 8.3 miles; natural resource damages outside the decision
Dioxin discharge
Until at least 1969
The sources give no discharge quantities

What we don't know

Undisclosed, unproven, untried: recorded as data.
Court ruling exists

Accounts

  • Disputed Was insurance coverage owed for the Newark plant claims?

Record

  • None on record The exact wording of the New Jersey Appellate Division's holding on knowledge in the 1992 opinion has not been confirmed; the full opinion could not be opened and the holding is quoted secondhand.
  • Insufficient Reported but not independently verified: a 2013 NJDEP release says the Appellate Division found that Diamond "intentionally dumped hazardous pollutants into the Passaic River for decades". This comes from a secondary summary; the release itself could not be checked.
  • Insufficient Reported but not independently verified: the responsible parties are said to have proposed targeted dredging plus natural recovery for the lower Passaic instead of the remedy EPA selected.
  • None on record The insurers' ground for refusal, that Diamond expected or intended the harm and knew the substances were harmful, is known only from NJDEP's later filings, which present it as the insurers' argument.

Did the harm stop?

Dioxin discharge to the river is recorded until at least 1969; the sources do not state when it ended.

Who paid?

The sources record that the insurers paid nothing for the Newark plant claims; who paid for the 2016 river remedy is not stated in them.

Sources

Voices on record: ✓ Company or project— Government and regulators✓ Courts— Press and investigations— Communities and civil society— Researchers

Company or project

  1. Maxus Energy Corporation, Form 10-K for fiscal year 1994
    US Securities and Exchange Commission (EDGAR) · FY1994

Courts

Connected cases

Related matters, and cases linked to this one through the same organisations, with the role each played in both.
Terms used on this page

Institutions

EPA
The US Environmental Protection Agency.

Bonds and banking

Liquidation, insolvency, bankruptcy
Legal processes that apply when a company cannot pay its debts; its assets are sold and claims against it may go unpaid.

Law and courts

Natural Resource Damage Assessment (NRDA)
The US legal process in which government trustees measure harm to natural resources from a spill and claim the cost of restoring them.

Science and environment

PFOA (C8) and PFAS
PFAS are a large family of human-made chemicals that persist in the environment and the body; PFOA, also called C8, is one of them and was used to make Teflon.
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