In the wake of that whole bringing-the-world-financial-system-to-the-brink-of-collapse thing, we had all but forgotten that a few years ago, AIG was on the hot seat with New York and federal authorities for shortchanging workers compensation funds. And even after it made peace with regulators, it faced a $1 billion fraud and conspiracy case by a big group of insurers making similar claims. But now it’s off that particular hook as well: On Thursday, Chicago federal district court Judge Robert Gettleman dismissed the suit (pdf), finding that the plaintiff, an organization called the National Council on Compensation Insurance, does not have standing to bring the case against AIG.

In 2006, AIG agreed to pay $343 million to settle regulators’ workers comp claims, as part of the broader $1.6 billion accounting scandal settlement that sent CEO Hank Greenberg packing. But NCCI — which administers a pool that serves as a payer of last resort for injuries at companies that can’t acquire insurance on the open market — believed the workers comp portion of the settlement was insufficient. It refused to allow any state to tender a release on its behalf, then in 2007 sued AIG on behalf of 600 insurers that contribute to the workers comp insurance pool. NCCI, represented by a Locke Lord Bissell & Liddell team led by Rowe Snider, claimed that AIG’s false reports shortchanged the other insurers to the tune of at least $1 billion.

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