Louisiana Generating v. Illinois Union Ins. Co.

After the EPA accused LaGen of violating the Clean Air Act, 42 U.S.C. 7401, LaGen promised, among other things, to upgrade parts of its power plant pursuant to a consent decree. LaGen then asked its insurer, ILU, to pay the costs of these measures, but ILU refused. The district court entered summary judgment for LaGen. The court upheld the district court’s ruling that the Consent Decree Measures indirectly mitigate BCII’s (a coal-fired electric steam generating plant owned by LaGen) past pollution; there is no genuine issue of material fact on this point, nor would further discovery create one; it is unclear, however, whether indirect mitigation and abatement efforts qualify in the first place as “remediation,” and their costs as “remediation costs,” under the Policy; and therefore, a genuine dispute of material fact exists as to whether LaGen is entitled to indemnification for any of the costs of the Consent Decree Measures. Moreover, the court concluded that, even if indirect mitigation efforts can give rise to covered “remediation costs,” genuine disputes of material fact exist as to whether LaGen’s claimed costs are unreasonable. Specifically, it is unclear whether LaGen’s claimed costs include costs that Entergy paid; design and elevator costs properly attributable to Units 1 and 2; and unreasonable delay-related cost overruns. Accordingly, the court vacated and remanded for further proceedings. View "Louisiana Generating v. Illinois Union Ins. Co." on Justia Law