A Missouri district court has greenlit litigation first filed 17 years ago by more than 1,400 Peruvian nationals against US billionaire mining industrialist Ira Rennert and his holding company, denying a motion to dismiss a lawsuit for alleged lead poisoning in children caused from a smelter operated in Peru.

New York-based Renco Group is the parent company of St Louis-based Doe Run Resources, which bought a smelting and refining complex, La Oroya Metallurgical Complex (LOMC), via a Peru-based subsidiary in October 1997. At the time of acquisition, the facility’s smelter and refinery operations, the second largest in Latin America, were subject to an environmental remediation and management plan aimed at reducing lead emissions.

The Saint Louis College for Public Health and Social Justice, a Catholic university, learned of reported contamination and sickness and sent researchers to Peru to test local children.

Nuns file suit on behalf of children

“They found some of the highest blood lead levels in the history of the world in these kids. That’s what ultimately triggered our bringing this case,” St. Louis – based lawyer Jerry Schlichter, partner at Schlichter Bogard, told MINING.com.

Schlichter has represented the plaintiffs since 2007, when sister Kate Reid and Mary Heeny filed several lawsuits in Missouri state court on behalf of the injured Peruvian citizens, who were children at the time of the alleged harm. Plaintiffs claim that Doe Run Peru failed to sufficiently reduce lead emissions from LOMC, as required under the terms of the environmental remediation and management plan, according to court documents.

LOMC operated continuously until it ceased in June 2009. Doe Run Peru initiated bankruptcy proceedings shortly thereafter.

Filed under Missouri law, the lawsuits relied on the theory that Doe Run Peru was controlled from the US by Doe Run Resources Corp. and its executives, whose decision-making exposed the plaintiffs to lead poisoning and caused them to suffer persistent and irreversible cognitive impairments, Judge Erickson said. Many other lawsuits eventually followed suit, amounting to 40 cases consolidated in Missouri federal court, Law360 reported.

In response to the plaintiffs’ claims, Doe Run Resources Corp. and its parent company later sought summary judgment, arguing Peruvian law should apply rather than Missouri state law.

Last year, local media reported Missouri Attorney General Andrew Bailey filed a brief in federal arguing the suit should be handled by courts in Peru.  Three months later, a political action committee created to support his 2024 hopes received a $50,000 check from Doe Run’s parent company, New York-based Renco Group, the Missouri Independent reported.

“We allege, and it’s a fact, that all of the acts of negligence causing this harm to these Peruvian children, both from the formation of the entity in Doe Run as a subsidiary of the American Corporation, and in the way it was financed, and in the way it was orchestrated and handled, all of the decisions resulting in this harm were taken in this country, not in Peru,” Schlichter said in an interview.

In this case, Doe Run Resources used what is known as Scorched Earth Defense on every aspect, Schlichter said.

Other US suits against Renco subsidiaries

Rennert made headlines in 2016 when a group of retirees whose pensions had been cut won a lengthy battle. Rennert settled the lawsuit in which a US government agency accused Renco Group Inc of trying to evade $70 million of pension obligations for its bankrupt RG Steel unit.

In another case, in 2017, a federal appeals court ordered Rennert to pay a $213.2 million judgment after a jury found him liable for looting his now-defunct magnesium company, Magnesium Corp of America, to build one of the country’s most expensive homes, a 21-bedroom mansion in New York’s Hamptons.

Doe Run also had a smelter in Herculaneum, Missouri, which was shut down when it was found liable under the Missouri Clean Water Law, for “damages for injury to, destruction of, and loss of Natural Resources and their services resulting from releases and threatened releases of hazardous substances at or from facilities now or formerly owned and/or operated by Doe Run Resources.”

Doe Run was found by the judge to have improperly obstructed discovery and was fined over $400,000, which was paid, Schlichter said.

In the Doe Run Peru case, the court found “Defendant Rennert is and was the controlling owner of all corporate Defendants, serving in numerous capacities… At all relevant times hereto, Defendant Rennert has and does control the other corporate defendants and their subsidiaries by virtue of his direct and indirect ownership.”

Schlichter said if Doe Run doesn’t file a petition in the Supreme Court, then the case will progress toward a trial, and that could happen as early as next year.

“We are committed, as the last 17 years have demonstrated, to do whatever it takes, however long it takes, to bring justice for these kids and their families and we are in it for the duration,” Schlichter said. “We are not going to let this scorched earth defense get in the way of obtaining compensation for the brain damage of these kids.”

Doe Run did not respond to emailed request for comment.

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