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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

NRG Energy (NYSE:NRG) Files Suit Against Illinois Union For Failure To Defend Big Cajun Lawsuit

http://www.flickr.com/photos/otodo/3558890813/sizes/m/in/photostream/March 15, 2011 - The owner of a Louisiana power plant and its subsidiary have filed a new lawsuit seeking to force their insurer to step forward and pay for defense costs arising from federal environmental charges.

NRG Energy Inc. and Louisiana Generating Co. have filed an amended lawsuit in U.S. District Court in Baton Rouge, Louisiana for a declaration that Illinois Union Insurance Company – a Chicago-based unit of ACE Group – is required to defend LaGen and pay any liability LaGen incurs in the government actions.

LaGen is a subsidiary of NRG, http://www.nrgenergy.com, one of the nation’s largest power producers.  It was sued on Feb. 11, 2009, over alleged pollution violations created by its coal-fired Big Cajun power plant at New Roads, Louisiana. The federal government is seeking to have LaGen both fix environmental violations at the plant and pay for cleanup costs for damages already done.  LaGen has contested the allegations.

According to the complaint, terms of the policy call for Illinois Union to pay for as much as $50 million beyond the $3 million deductible. But NRG and LaGen claim that Illinois Union has told them at least three times that it does not believe it owes LaGen a defense.

The lawsuit alleges that Illinois Union has asserted that its policy does not provide coverage “because the complaint does not constitute a claim, is not about the creation of a pollution condition and the remedy suggested by the United States does not fall within the defense of remediation costs.”

Illinois Union has reportedly told LaGen that the government cannot order LaGen to pay for “remediation costs” as defined in the Illinois Union Policy.

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