On March 10, 2025, Reid Collins won a unanimous reversal by the Fourth Circuit Court of Appeals that will allow JW Aluminum Company’s (“JWA”) claim for over $100 million related to insurance coverage for losses resulting from a catastrophic accident at one of the company’s production facilities to move forward.
JWA is one of the largest producers of flat-rolled aluminum in the United States. On August 4, 2020, a small splash of molten aluminum from a production line at JWA’s Goose Creek, South Carolina plant kicked off a chain of events that nearly destroyed the facility. The molten metal landed on a beam supporting the facility’s roof and ignited highly flammable aluminum dust. The fire then spread to the roof, grew, and moved towards gas lines. To avoid a major explosion, JWA shut down gas and electric service, causing molten aluminum to harden inside the company’s equipment, rendering it inoperable. The facility also sustained water damage during hours of firefighting efforts that followed. Although no workers or first responders were injured, the incident caused tens of millions of dollars of property damage and hundreds of millions in lost profits.
JWA’s insurers argued that they were only required to pay for a small fraction of these losses under a policy endorsement that reduced coverage for “direct physical loss or harm caused by heat from Molten Material” from the policy limit of $250 million to just $10 million. The District Court for the District of South Carolina granted the insurers’ motion for summary judgment on the issue, finding that the endorsement unambiguously applied. The Fourth Circuit reversed, finding that the endorsement was ambiguous in several respects and instructing the District Court to interpret the policy “liberally in favor of the insured and strictly against the insurer[s]” on remand.
Congratulations to the Reid Collins team – Craig Boneau, Scott Saldana, Dylan Jones, Morgan Menchaca, and Julia DiFiore.
The Fourth Circuit case is captioned JW Aluminum Co. v. ACE American Insurance Co., et al., No. 24-1229 (4th Cir.). A copy of the decision can be downloaded by clicking here.
Press coverage:
- Click here to read “4th Circ. Reverses $10M Coverage Cap For Aluminum Co” at Law360.com
