In Scarborough v. Northern Assurance Co., 718 F.2d 130 (5th Cir. 1983), the insured, a supplier of sand, filed a third-party claim against two insurers, asserting a right to reimbursement for costs it had incurred in successfully defending a products liability action.
The district court dismissed the claim, ruling that the insurers' policies excluded coverage of claims arising out of the company's silica products.
The company appealed to the United States Court of Appeals for the Fifth Circuit, which framed the issue as:
whether the complaint in the underlying action, which alleged, among other things, that the company had furnished plaintiff's employers sandblasting material (sand) "without proper instructions for its use," alleged a ground of liability against the company that was not excluded by the exclusion provisions of insurers' policies. (Scarborough, 718 F.2d at 132.)
Applying Louisiana law, the Scarborough Court held that a negligent failure to warn was not excluded by the "products hazard" exclusion.