Apollo Energy, LLC v. Lloyd'S, 387 F. Supp. 3d 663

Apollo Energy operated oil wells and held a Commercial General Liability policy (May 2, 2016–May 2, 2017) issued by QBE with a Total Pollution Exclusion (TPE) and a "Seepage and Pollution Buyback" endorsement (Buyback) that conditioned coverage on meeting specified requirements, including prompt notice.
On June 1, 2016 an oil leak at an Apollo well required remediation costing $143,643.64; cleanup began immediately but Apollo did not notify QBE until November 1, 2016 and then again on May 5, 2017—well beyond the Buyback notice deadlines.
The Buyback originally required knowledge within 30 days and reporting within 90 days (Endorsement 34 altered timings but kept the notice-as-condition structure).
Apollo conceded it missed the Buyback's 90-day reporting requirement, argued lack of prejudice to QBE, contended Settoon Towing was distinguishable, and asserted oil is not a "pollutant" under certain statutory definitions and Doerr factors.
QBE moved to dismiss for failure to state a claim on the ground the TPE barred coverage and the Buyback’s notice condition was unmet; the court treated policy language and the complaint's allegations as central to the motion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the TPE apply to Apollo's oil spill?	Oil spilled is not a "pollutant" under 42 U.S.C. § 9601(14); Doerr factors weigh against exclusion.	Oil qualifies as a pollutant under the policy definition; Doerr factors satisfied.	TPE applies: oil is a pollutant and Doerr factors met.
Does the Buyback exception overcome the TPE despite late notice?	Late notice did not prejudice QBE; Buyback should apply because cleanup was timely and within policy period.	Buyback requires the insured to "establish" timely notice; failure to comply bars the exception regardless of prejudice (Settoon Towing).	Buyback does not apply: Apollo admitted untimely notice and Settoon Towing treats such endorsement notice requirements as conditions precedent.
Is the insured a "sophisticated user" (affecting whether strict notice applies)?	Apollo argued it was unsophisticated and sought leave to amend to plead as such.	Apollo operates oil wells; oil businesses are sophisticated and expected to know policy terms.	Apollo is a sophisticated user as alleged; court declined to accept new factual assertions outside the complaint and denied leave to amend.
Should Apollo be given leave to amend to plead unsophistication?	Requested leave to allege lack of sophistication.	Amendment would be futile and the prior ruling gave notice of the issue; repeated failures to cure.	Leave to amend denied; dismissal with prejudice was proper because amendment would be futile.

In re Matter of Complaint of Settoon Towing, L.L.C., 720 F.3d 268 (5th Cir. 2013) (endorsed-buyback notice held a condition precedent such that failure to give timely notice precludes coverage regardless of prejudice)
Sims v. Mulhearn Funeral Home, Inc., 956 So.2d 583 (La. 2007) (principles for interpreting insurance contracts under Louisiana law)
Doerr v. Mobil Oil Corp., 774 So.2d 119 (La. 2000) (three-factor framework for determining applicability of pollution exclusions)