Judge Throws Out Punitive Damages Suits Over TVA Coal Ash Spill

March 29, 2010

A federal judge last Friday threw out lawsuits seeking to financially punish the Tennessee Valley Authority for its 2008 spill of toxin-laden coal ash but he will let suits seeking compensatory damages proceed.

The amount of compensatory, or economic, damages will be decided in court but punitive damages are often awarded for a far greater amount.

TVA spokesman Scott Brooks said in an e-mail late that the utility was declining comment, partly because the ruling by U.S. District Judge Thomas Varlan is 80 pages long and “we are taking time to study it and review the documents.”

Elizabeth Alexander of Nashville, an attorney for some of the hundreds of people suing, said in an e-mail statement that allowing the compensatory damage claims is a “tremendous victory in an effort to hold TVA accountable for the severe damage it has caused to residents and the environment.”

Court records show the damage claims total $165 million. The compensatory damages are subject to dispute in court.

The nation’s largest public utility contends it was acting as a government agency and does not have to pay damages beyond the compensation it has already negotiated with affected property owners and local governments.

The spill involved 5.4 million cubic yards of ash that breached an earthen dike at TVA’s Kingston Plant on Dec. 22, 2008. The EPA has said the Kingston ash contains arsenic, cadmium, chromium, lead, mercury, nickel, selenium and zinc, all hazardous substances as defined by the Superfund law. A projected $1.2 billion cleanup is ongoing.

TVA previously said it reached agreements to pay settlements to owners of 150 pieces of property and about 33 settlement offers were not accepted. TVA President and CEO Tom Kilgore, who is trying to avoid giving a deposition in the suits, previously said those settlements were based mostly on appraised values before the spill and “how much we have injured those people in terms of their property.”

The settlements require property owners to release TVA from claims for future health problems or other damages.

TVA previously agreed to pay $43 million to local governments for use on projects that will improve community life but aren’t related to the environmental disaster.

The judge said that based on prior rulings and the law that there is no way to seek punitive damages from TVA, which he described as a “federal agency and instrumentality, statutorily authorized to engage in power production for the general welfare of the community.”

Varlan also denied the plaintiffs’ request for a jury trial, which means he will decide the claims for compensatory damages.

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