TVA Liable for 2008 Coal Sludge ‘Tsunami’ That Swamped Town

The Tennessee Valley Authority is liable for damages caused when one of its containment dikes failed, dumping 1 billion gallons of coal ash sludge onto the community of Watts Bar Lake, Tennessee, in December 2008, a federal judge ruled.

U.S. District Judge Thomas A. Varlan, of Knoxville, Tennessee, ruled TVA incorrectly designed, built, maintained and inspected a dike holding back millions of gallons of toxic sludge at its Kingston Fossil Plant in Roane County, Tennessee. These failures caused a “slimes layer” underlying part of the dike to shift, collapsing the structure.

“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,” Varlan said in a 130-page ruling.

Attorney Rhon Jones, with Beasley Allen in Montgomery, Alabama, said the fast-moving wall of sludge knocked buildings from their foundations and contaminated more than 300 acres, including two nearby rivers, which have yet to be completely cleaned up.

“When you release over 1 billion gallons of toxic sludge in a matter of minutes, that’s a tsunami,” Jones, who has clients in both the TVA spill and the BP Plc (BP/) Gulf of Mexico oil spill, said in a phone interview today. “By way of comparison, BP’s Deepwater Horizon oil spill released more than 200 million gallons of crude into the Gulf of Mexico over about five months.”

Cleanup Costs

TVA is already footing cleanup costs in the Kingston area, which are projected at about $1.2 billion. TVA said in a statement today that it has bought 180 local properties and settled more than 200 other claims by area residents.

“Since the spill in December 2008, TVA’s 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 impacted,” according to the statement. TVA projects the recovery effort will continue through 2015.

In about three weeks, Varlan will hear motions on how to conduct the second phase of the trial to assess and compensate individual claims for damages caused by the spill. Jones declined to estimate actual damages that will be at issue during the second phase. Varlan previously rejected the victims’ request for punitive damages.

“That was a quiet, laid-back lake community that had a good quality of life that’s been completely destroyed,” Jones said, noting that the lawsuit has more than 800 plaintiffs. “It has been turned into a construction zone. This ruling provides an opportunity for all the people whose property was contaminated to move one step closer to compensation.”

The case is In Re: Tennessee Valley Authority Ash Spill Litigation, 3:09-cv-009, U.S. District Court, Eastern District of Tennessee (Knoxville).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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