Louisiana Generating LLC et al v. Illinois Union Insurance Company

Filing 136

RULING: The 115 Motion for New Trial is DENIED but the alternate 115 Motion to Certify under 28 USC 1292(b) is GRANTED. Further, LaGen's pending 113 Motion for Attorney Fees is DISMISSED and may be refiled after the resolution of the appeal. Signed by Judge James J. Brady on 5/15/2012. (JDL)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
LOUISIANA GENERATING, LLC,
and NRG ENERGY, INC.
Plaintiff,

CIVIL ACTION

VERSUS

10-516-JJB-SCR

ILLINOIS UNION INSURANCE COMPANY,
Defendant.
CONSOLIDATED WITH
ILLINOIS UNION INSURANCE COMPANY,
Plaintiff,

CIVIL ACTION

VERSUS

10-835-JJB-DLD

LOUISIANA GENERATING, LLC,
and NRG ENERGY, INC.
Defendant.

RULING ON MOTION FOR NEW TRIAL
This matter is before the Court on Defendant Illinois Union’s (“ILU”) motion
for a new trial or alternately to certify for interlocutory appeal pursuant to 28
U.S.C. § 1292(b) or Rule 54(b) (doc. 115).

Plaintiff Louisiana Generating

(“LaGen”) filed an opposition (doc. 130) and ILU replied (doc. 135). This motion
refers to the Court’s January 30, 2102 ruling on cross-motions for summary
judgment (doc. 111). Oral argument is not necessary. For the following reasons,
the motion for a new trial is DENIED and the alternate motion to certify for
interlocutory appeal is GRANTED.

As to the first motion, the parties disagree under which provision of Rule
59 the motion is properly brought.

ILU contends Rule 59(a) governs, while

LaGen contends that really Rule 59(e) is proper. Both parties are mistaken.
First, as there has been neither a jury nor a nonjury trial, Rule 59(a) does not
apply in this situation. Second, as there has not been a judgment entered, there
is no judgment to be altered under Rule 59(e). Therefore, the Court finds this is
really a motion to reconsider its prior ruling that is governed by Rule 54(b), the
relevant portion of which provides:
[a]ny order or other decision, however designated, that adjudicates
fewer than all the claims or the rights and liabilities of fewer than all
the parties does not end the action as to any of the claims or parties
and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.
Fed. Rule Civ. P. 54(b).1 District courts have broad discretion in deciding
whether to reconsider an interlocutory ruling. While the factors used in Rule 59
or 60 motions inform the Court’s decision, ultimately a court is free to reconsider
“for any reason it deems sufficient, even in the absence of new evidence or an
intervening change in or clarification of the substantive law.”

McClung v.

Gautreaux, 2011 WL 4062387 (M.D. La. 2011) (internal citations omitted).
However, courts generally decline to reconsider when a party simply seeks to
rehash an old argument or raise a new argument without justification. Id.

1

A different part of Rule 54(b) will pertain to the alternate motion to certify for appeal. This will be
discussed below.

2

In its initial brief, ILU claimed there was new evidence and that the Court
was manifestly erroneous in its prior ruling. In its opposition, LaGen pointed out
that the “new” evidence had in fact been in ILU’s possession since December
2010.

In its reply, ILU concedes that this is in fact true and abandons this

argument. The remainder of its argument is that the Court erred by (1) not
finding the claim was made before the policy date and (2) not declaring the civil
penalties provision to be punitive and therefore excluded from coverage. The
Court finds no manifest error and while the case ILU presents from the Eastern
District of Louisiana2 may prove illuminating in the coverage determination, it
does not point to manifest error by this Court.

Therefore, the motion to

reconsider is DENIED.
As for whether to certify this interlocutory decision for appeal, ILU first
urges this under 28 U.S.C. § 1292(b). To gain this certification, the Court must
find that the interlocutory decision (1) involves a controlling question of law as to
which (2) there is a substantial ground for difference of opinion and (3) that an
immediate appeal from the order may materially advance the ultimate termination
of the litigation. 28 U.S.C. § 1292.
The Court finds these three elements are met.

First, the questions of

whether injury to the air can be the sort of property damage that triggers
coverage and whether civil fines are punitive in nature are controlling questions

2

In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, 2012 WL
246455 (E.D. La. Jan. 26, 2012).

3

of law. This is so because if the answer to both is negative, then comparing the
allegations in the underlying suit to the insurance policy would make it clear that
coverage is impossible and there would be no duty to defend. ILU has pointed to
other district courts that have reached different conclusions when confronted with
these questions. And while none are controlling on this Court, it does point to a
substantial ground for difference of opinion. Finally, were ILU to prevail on this
interlocutory appeal, it would not have a duty to defend and thus the suit would
be terminated.
LaGen focuses all of its energy on the third factor. (Doc. 130 at 18-22). Its
main argument is that a determination in ILU’s favor would not terminate the
litigation as the second issue, coverage, would still be unresolved.

This

argument is without merit. The duty to defend is triggered by the potential for
coverage. A ruling of no duty to defend necessarily means there is no coverage.
Therefore, there would be nothing left to litigate. The same goes for LaGen’s
pending motion for attorney’s fees for the underlying litigation up to this point. If
there is no duty to defend, then that motion would be dismissed as well. As the
Court finds the elements of 28 U.S.C. § 1292(b) are satisfied, it will certify the
matter for interlocutory appeal.
The Court certifies under § 1292(b), there is no need to rule on the
alternate motion to certify under Rule 54(b).3

3

However, the Court also finds there is no just reason for delay and the ruling on the motions for
summary judgment should be amended to provide that final judgment should be entered on the issue of

4

LaGen notes that this Court declined to certify the same question of the
duty to defend in the CamSoft v. Southern Electric case.4 (Doc. 130 at 21).
However, in CamSoft the insurer was a party in the underlying suit. In this case,
the coverage dispute is a separate suit.

Therefore, the piecemeal appeal

concerns are greatly reduced as this is a two-part, two-party dispute.
LaGen also points to Landry v. GBA, in which the Fifth Circuit found a Rule
54(b) certification premature where the judgment disposed only of the duty to
defend issue and not the request for recovery of associated fees and penalties
for breach of the duty that was brought in the same motion. 762 F.2d 462 (5th
Cir. 1985). Further, LaGen points to a case where the district court declined to
certify the duty to defend decision where it held there were outstanding issues
regarding the duty to defend. Kreger v. General Steel Corp, 1020 WL 3076297
(E.D. La. 2010) (Berrigan, J.).

ILU points to a more recent case from the same

court finding there were no unresolved issues regarding the duty to defend.
Williams v. Traylor-Massman-Weeks, LLC., 2011 WL 4959365 (E.D. La. 2011)
(Berrigan, J.).

The Court further notes other courts have certified this question

of duty to defend. State of N.Y. v. AMRO Realty Corp., 936 F.2d 1420 (2d Cir.
1991).

the duty to defend under Rule 54(b). This determination is made by balancing the “danger of hardship or
injustice through delay which would be alleviated by immediate appeal” and avoiding piecemeal appeals.
Eldridge v. Martin Marietta Corp., 207 F.3d 737, 740 (5th Cir. 2000) (internal quotation omitted). If there
is no duty to defend, delaying an appeal would keep ILU in the litigation unnecessarily—indeed it would
keep the entire litigation going unnecessarily.
4

2011 WL 263 7001 (M.D. La. 2011).

5

The Court finds Landry is distinguishable in that there was no motion for
fees and penalties brought along with the motion for summary judgment. As this
case was bifurcated between duty to defend and coverage, and the Court finds
there are no unresolved issues regarding the duty, Williams is on point.
For these reasons, the motion for a new trial is DENIED but the alternate
motion to certify under 28 U.S.C. § 1292(b) is GRANTED. Further, LaGen’s
pending Motion for Attorney Fees (doc. 113) is DISMISSED and may be refilled
after the resolution of the appeal.
Signed in Baton Rouge, Louisiana, on May 15, 2012.





JUDGE JAMES J. BRADY
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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