Pollution Claims For Oil Production Waste Barred By Retroactive Date

The United States District Court for the District of Montana, applying Montana law, held on summary judgment that claims-made Petroleum Industry Insurance Coverage did not apply to pollution claims where contamination began before the policies' retroactive date. Murphy Exploration & Prod. Co. v. Ballard Petroleum Holdings, LLC, 2025 WL 3157906 (D. Mont. Nov. 12, 2025).

An oil company sold its oil field interests to another oil company in 2002. Years later, unrelated property owners sued the seller for brine and other oil-production-byproducts pollution beginning in the 1950s and occurring until the 1990s. The seller sought a defense and indemnification for the lawsuit from the purchaser under their purchase agreement, which the purchaser denied. At arbitration, a panel found that the purchaser was obligated to defend and indemnify the seller in the lawsuit. Consequently, the insured purchaser sought coverage for the arbitration and the lawsuit under its Petroleum