Birmingham, Alabama (Platts)--23Aug2012/541 pm EDT/2141 GMT

The Tennessee Valley Authority is liable for the massive 2008 coal ash spill at the Kingston coal-fired plant and claims by 800 plaintiffs may move forward, a federal judge said Thursday.

Judge Thomas Varian in US District Court for the Eastern District of Tennessee in Knoxville ruled that TVA's conduct caused the failure of a coal ash containment dike and that it is liable for damages, provided that each plaintiff individually can prove entitlement to the relief.

The coal ash dike failed in December 2008, sending 5.4 million cubic yards of ash from the plant's containment pond over about 300 acres and into the Emory River. TVA has settled with most residents who lived closest to the spill and has purchased 180 properties. It also has settled more than 200 other claims, TVA said in a statement.

The remaining plaintiffs claimed that coal or fly ash was on their property, in the air over their property or in the water surrounding their property, or a combination of the three. In the next phase of the trial each plaintiff must prove the elements of the claims by a preponderance of the evidence, Varian said.

"While the court has reservations as to whether each plaintiff may be able to prove each of the necessary elements for a private nuisance claim, the court finds that the allegations in this litigation do involve allegations of an invasion of legally protectable property interests," Varian said.

Claims of negligence, trespass and private nuisance were allowed to go forward, but claims of negligence per se -- recklessness, strict liability and public nuisance -- were dismissed.

Varian ruled that the spill was caused by TVA's design and placement of the containment dike and its decision to continue operating the facility as a wet coal ash pond and building up its wet coal ash stack.

Varian also found that TVA's failure to inform and train personal in TVA's mandatory policies, procedures and practices for coal ash management and its personnel's negligent performance substantially contributed to the failure.

"If TVA had followed its own mandatory policies, procedures and practices the issues underlying the failure of the North Dike would have been investigated, addressed and potentially remedied before the catastrophic failure," Varian said.

TVA said it remains committed to the full restoration of the community directly affected by the spill "while being mindful of our responsibility to manage ratepayer dollars."

TVA has taken responsibility for the spill and is committed to restoring the area, the federal power producer said in a statement.

"We are following through on our pledge to clean up the ash while protecting public health and safety. The recovery project is expected to continue through 2015," the statement said.

TVA has estimated that the cost of the cleanup and the settlements with plaintiffs so far is about $1.1 billion.

--Mary Powers, newsdesk@platts.com --Edited by Jason Lindquist, jason_lindquist@platts.com

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