Big win: Judge rejects deals between Kentucky officials and coal company

The Franklin Circuit Court on Monday issued two long-awaited orders rejecting settlement deals between the Kentucky Energy and Environment Cabinet and Frasure Creek Mining arising from the coal company’s thousands of violations of the Clean Water Act from 2008 through 2011.

In extraordinarily vigorous language, Judge Phillip Shepherd said that due to the coal company’s actions, “The inherent danger of the violations at issue here to the environment is impossible to determine based on Frasure Creek's wholesale abdication of its monitoring and reporting responsibilities, and the cabinet's inability to fully investigate the environmental harm that is likely to have occurred.”

“Since October 2010, we have been in the courts to see that the law be enforced in the state of Kentucky,” said Ted Withrow, a member of KFTC's Litigation Team. “These rulings by Judge Shepherd serve to enforce that right of the people."

In 2010, Appalachian Voices, Kentucky Waterkeeper Alliance, Kentucky Riverkeeper, KFTC and several individuals made public more than 20,000 violations of the Clean Water Act from 2008 to 2010 by Frasure Creek and a second coal company, International Coal Group (which later settled out of court). Under the law, these violations could be subject to hundreds of millions of dollars in fines. On the 57th day, the cabinet and Frasure Creek entered a proposed consent agreement that included only 1,520 violations and combined fines of just $310,000.

The violations largely had to do with falsifying water quality monitoring reports that the companies were required to submit under their pollution discharge permits. The false reports hid significant water quality violations.

“These are much more than paper violations [as state officials at the time claimed]. With each false entry on these reports, the company is deceiving regulators and the public about the pollution it may be discharging into Kentucky waters,” said Erin Savage, Central Appalachian Campaign Coordinator with Appalachian Voices. “The judge’s orders confirm what citizens have known for some time – that the state is failing to enforce the Clean Water Act in eastern Kentucky,”

In one order, Judge Shepherd rejected a settlement proposed four years ago between the cabinet and Frasure Creek that purported to address reporting violations uncovered by citizens groups. In rejecting the deal, Judge Shepherd wrote: “The proposed consent decree is unlikely to be successful in producing a change in behavior by Frasure Creek, because the economic benefit that it obtains by taking short-cuts and submitting unreliable data far outweighs the costs of compliance, or the risk of any fines and penalties that the cabinet will impose. This case demonstrates that the fines and penalties are an acceptable cost of doing business.”

In his other order, Judge Shepherd rejected a second settlement from 2013 between the cabinet and Frasure Creek. This settlement attempted to resolve pollution permit limit violations reported by Frasure Creek once the falsified reporting temporarily ended. The cabinet finalized the settlement over the objection of citizens groups, who claimed that the settlement’s meager fines and weak stipulations resulted in little more than a slap on the wrist. The citizens groups subsequently petitioned the court to review the settlement on grounds that it was insufficient to accomplish enforcement goals and that the cabinet’s handling of it violated their due process rights.

Again, the court has agreed: “While the cabinet may enter into an agreement with Frasure Creek, it cannot circumvent the rights of intervening parties to question that agreement, to gather evidence concerning its adequacy, and to put on proof before a hearing officer raising objections to the agreement.”

At the time of the 2010 filings, Frasure Creek was one of the largest mountaintop removal mining companies in Kentucky. It continues to operate mines in Kentucky and West Virginia.

In all instances, the violations were discovered by Appalachian Voices water quality specialists and others who analyzed thousands of documents. As Judge Shepherd noted in one order: “The fact that these massive reporting violations were brought to light by citizens acting independently of the cabinet further supports the conclusion that the public interest in the consent decree was not objectively considered by the cabinet prior to the intervention by the citizen intervenors in this action."

Throughout the four years of litigation, the citizens groups had to fight the insistence of cabinet offiicals that the public has no right to intervene in the enforcement of the Clean Water Act. They once labeled having to deal with the public as an "unwarranted burden."

"This struggle has taken us all the way to the State Supreme Court, which ultimately upheld the rights of citizens to intervene in legal proceedings by the cabinet,” said Withrow. "Our most recent Notice of Intent to sue Frasure Creek Mining for 28,000 violations of the Clean Water Act reinforces our conviction that the law is not being enforced in any meaningful way.”

Just last week the citizens groups made public that Frasure Creek had continued the same pattern of non-compliance from early 2013 through at least the first quarter of 2014, perpetrating almost 28,000 new violations of federal law. Frasure Creek has resumed submitting duplicated water pollution monitoring reports to the state, falsifying data and hiding the extent of pollution at its mines.

The citizens groups are represented by Mary Cromer of the Appalachian Citizens’ Law Center (Whitesburg, Kentucky), Lauren Waterworth of Waterworth Law Office (Boone, NC), and the Pace Law School Environmental Litigation Clinic (White Plains, NY).