Judge: TVA liable for ash spill, but specific damages yet to be proven

A federal judge on Aug. 23 found the Tennessee Valley Authority (TVA) was negligent in not preventing a December 2008 coal ash dam failure at its Kingston power plant that allowed millions of gallons of ash-laden sludge to foul a local river.

The 130-page ruling came from Judge Thomas Varlan at the U.S. District Court for the Eastern District of Tennessee, who had been reviewing a combined case filed by local residents. The entire TVA ash litigation currently encompasses more than 60 cases pending before the judge and involves more than 800 plaintiffs.

TVA said in an Aug. 23 response to the ruling that since the spill in December 2008, its commitment has not wavered – to clean up the spill, protect the public health and safety, restore the area, and, where justified, fairly compensate people who were directly affected. “The U.S. District Court today ruled that TVA can be held liable for conduct by TVA that contributed to cause the spill,” TVA added. “The litigation now will proceed to a second phase where the plaintiffs may attempt to prove they were each directly impacted by the spill on an individual basis. TVA remains committed to the full restoration of the community directly impacted by the spill, while being mindful of our responsibility to manage ratepayer dollars.”

TVA said it has purchased about 180 properties and settled more than 200 other claims. TVA also provided $43m to the Roane County Economic Development Foundation for use by communities in the affected area. The ash recovery project is expected to continue through 2015.

Mary Anne Hitt, Director of the Sierra Club’s Beyond Coal Campaign, said in an Aug. 23 statement that the decision is “a victory for every family that was impacted by this tragedy. Local residents have lost their property and been exposed to arsenic, lead, mercury and selenium. Forcing TVA to face up to its responsibility is just the first step in ensuring that these folks can rebuild their lives,” Hitt said.

“In the life cycle of coal-fired power, it is coal ash ponds like the one at Kingston that pose some of the greatest and most direct danger to nearby communities and ecosystems. The ongoing tragedy in Tennessee, and the danger posed by hundreds of other coal ash ponds around the country, is the sad result of inadequate and inconsistent national standards for protecting communities, as well as regulatory loopholes that allow the coal industry to avoid taking responsibility for its waste. Unfortunately, four years after the TVA spill, these loopholes have not been closed, and these dangers remain in many communities,” Hitt said.

This is only Phase I of a two-phase process

In general, plaintiffs claim that the failure of the coal ash dike at Kingston and the resulting spill was caused by TVA’s negligent conduct with respect to the design, construction, implementation, operation, maintenance, and inspection of the coal ash storage and disposal facilities, the judge wrote. Plaintiffs’ initial complaints against TVA alleged causes of action for personal injury and property damage under tort law theories of negligence, negligence per se, gross negligence, trespass, nuisance, strict liability and inverse condemnation.

The court had previously issued written opinions on various motions in which TVA sought dismissal or limitation of plaintiffs’ claims. The court previously found that the discretionary function doctrine insulates TVA from liability if the conduct challenged by plaintiffs was discretionary conduct grounded in considerations of public policy and involved the permissible exercise of policy judgment. The court also previously found that the discretionary function doctrine does not protect TVA from liability for nondiscretionary conduct not grounded in policy considerations and not involving the permissible exercise of policy judgment. Also in a prior ruling, the court granted TVA’s request to dismiss plaintiffs’ claims for punitive damages and granted TVA’s request to strike plaintiffs’ requests for a jury trial.

In August 2011, the court decided to conduct this litigation into two separate phases. Phase I would involve a single trial on issues and evidence relating to duty, breach, and dike failure causation, and the issues decided in Phase I would be binding on all parties. Depending on the disposition of the issues reached in Phase I, the court ordered that Phase II would include individualized evidentiary hearings or proceedings to determine issues such as tract-specific causation and whether and to what extent each plaintiff is entitled to damages.

During a three-week bench trial on Phase I, the court heard and considered testimony and evidence regarding issues of duty, breach, causation, and whether nondiscretionary conduct by TVA caused the dike failure and coal ash spill. The court did not consider testimony or evidence on property-specific causation and damages because these issues would be addressed in Phase II proceedings.

Following Phase I, the parties submitted closing argument briefs, proposed findings of fact and conclusions of law, and summaries of each witness’s testimony, whether that testimony was given at trial or by deposition.

In plaintiffs’ post-trial submissions, plaintiffs did not include arguments or proposed findings of fact and conclusions of law regarding their claims that TVA is liable under theories of recklessness, strict liability, and public nuisance. The court therefore concluded that plaintiffs have abandoned these theories. So, the court only addressed in the Aug. 23 decision plaintiffs’ tort claims under theories of negligence, negligence per se, trespass, and private nuisance. As previously determined by the court, the discretionary function doctrine applies to these claims and forecloses relief to the extent the claims are barred by the discretionary function doctrine.

Judge said TVA set the dike up over a weak embayment

The judge concluded that the failure of the North Dike at Kingston on Dec. 22, 2008, which spilled more than 5 million cubic yards of coal ash sludge over about 300 acres, was caused by: TVA’s placement of North Dike over the Swan Pond slack water embayment; TVA’s design of North Dike; its decision to continue operating the Kingston plant as a wet coal ash storage and disposal facility; and the agency’s decision to continue building up its wet coal ash stack.

“This conduct, in conjunction with the geological conditions of the Swan Pond slack water embayment, gave rise to the slimes layer, a unique subsurface layer of materials located near the foundation of North Dike that was weak, high in water content, and susceptible to a complete loss of strength when overstressed,” the judge wrote. “The Court concludes that but for the confluence of these physical and geological factors and the movement of the slimes layer which triggered the dike failure sequence, the coal ash spill that is the subject of this litigation would not have occurred.”

The judge also concluded that the creation of the slimes layer cannot simply be attributed to only discretionary conduct for which TVA cannot be liable under the discretionary function doctrine. This is because TVA’s location of North Dike over the Swan Pond slack water embayment was a result of TVA’s “improper construction” of perimeter Dike C, which ultimately resulted in TVA placing North Dike over the unstable conditions and materials of the Swan Pond slack water embayment, the judge wrote.

“As this Court has held throughout this litigation, negligent implementation of discretionary decisions to design, locate, and construct, a wet coal ash facility do not involve the policy judgments and considerations the discretionary function doctrine is intended to shield,” the judge ruled. “To hold otherwise would preclude and foreclose liability for negligence upon the single assertion that choices or a decision was made subsequent to negligent conduct. The Court declines to construe the discretionary function doctrine so broadly and therefore finds TVA is liable for the ultimate failure of North Dike which flowed, in part, from TVA’s negligent nondiscretionary conduct.”

Judge also cites a lack of employee training

The court also concluded that TVA’s failure to inform and train its personnel in TVA’s mandatory policies, procedures, and practices for coal ash management, and TVA personnel’s negligent performance of the same—specifically, TVA’s policy, procedure, and practice of conducting annual dike stability inspections and TVA’s undertaking of ongoing maintenance of North Dike—were also substantial contributing causes of the failure of the North Dike.

The judge further concluded that TVA’s failure to inform TVA personnel—its own inspectors and coal ash managers—of the substance of these policies, procedures, and practices, and their negligent performance of the same, is nondiscretionary conduct for which TVA is liable.

Having found thatTVA is not wholly protected from liability by the discretionary function doctrine, the court also found that plaintiffs’ claims of negligence, trespass, and private nuisance will proceed to Phase II proceedings but that plaintiffs’ claims of negligence per se will not and will be dismissed. The court also noted that each plaintiff in the TVA litigation now faces an individualized burden in the Phase II proceedings. In Phase II, each plaintiff must prove the elements of his or her respective negligence, trespass, and/or private nuisance claims by a preponderance of the evidence.

“The Court has noted since the inception of this litigation that while these cases involve common questions of general causation, these common issues do not predominate over individual questions of causation,” the judge explained. “While up until this point, common issues of causation—such as whether nondiscretionary conduct by TVA caused the dike failure—have dominated, from this point forward the common issues will not predominate over individualized issues including: whether coal ash is or was present on each plaintiff’s specific property; whether the presence of the coal ash on the specific property can be traced to TVA’s nondiscretionary conduct; whether the coal ash has damaged each specific property; whether and how the coal ash affects each plaintiff’s use and enjoyment of said property; and the amount of damage, if any, to each property and to each plaintiff.”

The parties were directed by the judge, within 21 days of the entry of this memorandum opinion and order, to file written briefs regarding the parties’ recommendations for how the court should conduct the Phase II proceedings.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.