South Sioux City Sues Insurers Over Noxious Odors

SOUTH SIOUX CITY | The city of South Sioux City has filed a lawsuit seeking to get insurance companies to pay claims that residents are filing after being displaced from homes that were inundated with controversial odors.

The city is asking the court to order two insurance companies to cover tort claims filed by residents over losses related to sewage treated by Big Ox Energy in South Sioux City and the resulting discharge and backup of hydrogen sulfide gas from that sewage into homes. The lawsuit was filed Wednesday in U.S. District Court in Lincoln, Nebraska.

Sixteen families and one business entity in May filed political subdivision tort claims against the city, detailing $35 million in alleged property damages and personal injuries resulting from exposure to potentially deadly fumes.

The Charter Oak Fire Insurance Company and Philadelphia Indemnity Insurance Company are the two insurance businesses sued by the city. The city is represented by the Remboldt Ludtke law firm in Lincoln.

South Sioux City Manager Lance Hedquist said Monday he does not comment on ongoing legal matters.

The putrid odors began in mid-October 2016, when sewer gas permeated some homes in a five-block area of Red Bird Lane and Le Mesa Way, along 39th Street, both indoors and outdoors.

Many residents have blamed Big Ox Energy's renewable energy plant, which went online Sept. 2 in the city's Roth Industrial Park, for causing the issues in the line the residents and the plant, at the time, shared. The May tort claims say Big Ox Energy will be the subject of future legal action.

In those May filings, residents said they suffered from nausea, headaches, sleep disturbance, emotional distress and other effects. Some residents said they had visited the hospital for their symptoms, sometimes multiple times.

Big Ox Energy in January denied culpability for the sewer gases, saying other industries have also affected the hydrogen sulfide levels in the sewer lines and that individual plumbing deficiencies in many of the affected homes played a major role. South Sioux City's administration has largely aligned with Big Ox Energy's assessment.