Companies that insured Trump International Hotel & Tower in Chicago aren't required to defend its owner against accusations of polluting the Chicago River or pay potential insurance claims resulting from a lawsuit filed by the state in 2018, an Illinois appellate court has ruled.
The unanimous ruling by a three-judge panel in a suit brought by the property's insurers is the latest setback for The Trump Organization, Donald Trump’s real estate development firm. The lawsuit accused the owner of Chicago’s second-tallest skyscraper of illegally discharging warm wastewater into the river. The suit holds Trump's firm, but not him personally, liable.
Even so, this week's ruling in the Illinois Court of Appeals for the First Division adds to a list of legal issues related to the former president, who personally has been indicted in four criminal cases this year as he says he plans another presidential run. In those four cases, Trump himself, and not his real estate firm, is accused of crimes.
The new ruling involving The Trump Organization confirms that QBE Insurance and insurers affiliated with Chubb and CNA Financial are not on the hook for payouts related to pollution allegations.
The Trump Organization's Chicago skyscraper includes a hotel, never-leased retail space on the ground floor, and separately owned residential condominiums. It opened in 2009 at 401 N. Wabash Ave., on the riverfront site that previously was home to the Chicago Sun-Times.
At 1,389 feet tall, it is the tallest in the city other than the 1,451-foot-tall Willis Tower, formerly known as the Sears Tower.
Pollution Lawsuit
The Illinois Attorney General’s Office, at the request of the Illinois Environmental Protection Agency, sued The Trump Organization in 2018, saying it was polluting the river without a permit.
The Trump Organization was accused of taking in almost 20 million gallons of river water per day to cool the skyscraper, then pushing warm water back into the river without the state’s permission. The state alleges that The Trump Organization has been in violation of rules meant to protect fish and other wildlife, and two other organizations — the Sierra Club and Friends of the Chicago River — have filed complaints.
The Trump Organization’s permit for discharging water back into the river expired in 2017, leaving the property owner in violation of an Illinois EPA act, the state has alleged.
Starting with CNA affiliate Continental Casualty in 2021, The Trump Organization’s previous insurers for the building filed individual legal arguments that their policies do not cover pollution.
Insurers provided coverage for property damage or bodily injury as part of an “occurrence,” such as an accident or repeated exposure to harmful conditions, but the policies all included pollution exclusions, according to the appellate court ruling.
The appellate court confirmed that there was no “occurrence,” meaning the insurers are not required to defend against or potentially pay out fines for the pollution case. The three judges’ decision this week, previously reported by Bloomberg Law, upholds a ruling last year by an Illinois circuit court.
The New York-based Trump Organization and the insurers did not immediately respond to a request to comment from CoStar News.
The Trump Organization in the past reportedly has called the EPA lawsuit politically motivated, saying the state has given other violators a break after missing permit deadlines.
The ruling in the pollution case also comes as Trump and his lawyers juggle defenses in cases against him personally that involve accusations of trying to overturn the results of his 2020 election loss to Joe Biden in Georgia; inciting the Jan. 6, 2021, attack against the U.S. Capitol; taking and keeping highly sensitive classified documents after leaving office; and falsifying records to pay hush money to a porn star. He has been indicted in those four cases and pleaded not guilty.
Amid those criminal cases, The Trump Organization also faces an ongoing civil fraud case brought by New York Attorney General Letitia James. In a motion filed this week, James estimated Trump, his sons and others at The Trump Organization overinflated Trump’s worth by as much as $2.2 billion over a 10-year period.
That case is expected to go to trial in October. The Trump Organization has pleaded not guilty.
In late 2022, The Trump Organization was convicted on tax fraud charges in a Manhattan Court. In the case led by Manhattan District Attorney Alvin Bragg, The Trump Organization early this year was ordered to pay more than $1.6 million in fines in that case.
Those two New York cases are against The Trump Organization, but not Trump personally.