Judge Further Limits Tenn. Valley Authority Coal Ash Spill Lawsuits

A federal court further limited lawsuits seeking damages from the Tennessee Valley Authority for its huge spill of toxin-laden coal ash, but the judge ruled that claims related to property damages and reduced property values will to go to trial.

The court fight is over a Dec. 22, 2008, TVA dam collapse that spilled 5.4 million cubic yards of sludge in the Emory River and onto surrounding land in Roane County west of Knoxville.

U.S. District Judge Thomas Varlan’s order Tuesday granted TVA’s motion to dismiss claims for personal injury, emotional distress and inverse condemnation. But a bench trial is set for Sept. 13 on dozens of damage suits and another trial possibly to follow in November.

His order allows claims for property damages, trespass and nuisance to go forward. Dozens of other potential plaintiffs who have until December to file damage lawsuits are watching the case.

While TVA since the spill has purchased almost 900 acres for $47 million and signed deals that include owners promising not to sue, hundreds of people who feel they have suffered losses have stakes in the court fight.

Loretta Smith, 57, of Lyons, Ill., owns 25 acres near the spill site where TVA is continuing a $1.2 billion cleanup. She and her husband, Darrell Lyons, 60, had bought the property several years before the spill, with plans to retire close to relatives in Tennessee.

“This town reminds me of going back to grandmother’s house. It’s just so beautiful,” Smith said of Harriman. “It’s country and quiet.”

Now the Smiths are stuck with $600-a-month-payments on their land, plus taxes “and I am not getting anywhere. I can’t use it,” said Loretta Smith, who in May was laid off from her job as an insurance claims adjuster. Smith said TVA has bought surrounding property, including 200 acres behind them, but the utility won’t even talk to them. She said they have hired a lawyer but they haven’t yet sued.

Smith said she and her husband bought the land for about $117,000 and were trying to sell it for $225,000 to build elsewhere in the community when the coal ash spilled.

“The real estate agent said you might as well forget it,” Smith said. “We haven’t had any luck with any buyers. Who would want to buy it now with TVA all around us?”

Smith said she wants TVA to “give us the fair offer they gave everybody else.”

She said their property touches the water, the same as adjoining land that TVA bought from her sister.

Coal ash contains arsenic, selenium, lead and mercury. Though those materials can pose health risks if they leach into groundwater, records say that the Knoxville-based utility contends that tests show no proof of contamination from the spill that exceeds health standards.

TVA also contends that as a federal utility it is not subject to liability claims and that under Tennessee law it has no legal duty to keep its reservoirs and shorelines safe for the plaintiffs’ recreational use and enjoyment. TVA says plaintiffs have not shown that the spill caused ash particles to be transmitted to their properties in “material quantities or concentrations sufficient to cause property damage and/or personal injury or to constitute a taking.”

The court previously ruled against claims for punitive damages from the spill.

“Our clients will be glad to have their day in court,” plaintiff attorney Elizabeth Alexander of Nashville said Wednesday in response to the order.

Alexander said there are owners other than the Smiths who have had property devalued by the spill while TVA has bought out neighbors.

TVA spokeswoman Barbara Martocci said Wednesday that “as far as the decision we are just going to move forward with our case in court in mid-September.”

While TVA battles the property owners in court, the Environmental Protection Agency, which has described the spill as a “one of the worst environmental disasters of its kind,” is struggling to decide if coal ash would be regulated as a hazardous material.

Some industries use “coal combustion residues” in products such as wallboard and concrete and contend there is no evidence that it is a health hazard. Coal ash recyclers and manufacturers contend tougher federal regulations would place a stigma on the substance and hinder efforts to reuse some of the 130 million tons produced at U.S. coal-fired power plants each year.