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Coal producer sues Ky. regulators over its reclamation shortcomings

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Essential Energy Insights - November 2021


Coal producer sues Ky. regulators over its reclamation shortcomings

A coal company linked to the governor of West Virginia is suing two Kentucky environmental regulators for allegedly interfering in its ability to meet its reclamation deadlines.

The two lawsuits opened by the family of Republican Governor Jim Justice target Kentucky Department for Natural Resources Commissioner Allen Luttrell and Deputy Commissioner John Small, according to an attorney for Kentucky Fuel Corp. involved with the case filed in the Pike County Circuit Court of Kentucky.

"I think it's a matter of accountability. Regulators ought to be held accountable when they step across the line," Richard Getty, an attorney with The Getty Law Group PLLC, told S&P Global Market Intelligence. Getty's firm is involved in the case against the two regulators, who he said were "trying to invent roadblocks" in the way of Kentucky Fuel's ability to meet its reclamation duties.

Justice sought an extension for carrying out reclamation duties at strip mining sites and to fix a highwall in Kentucky last year.

James C Justice Companies Inc recently received rights to do more coal mining at its Bent Mountain mine, facilitating reclamation of the 20-year-old highwall in question. Luttrell approved the proposal, encouraging steady progress since the companies were already months behind schedule on reclamation.

Justice reached a settlement with Kentucky regulatory officials in 2014 that would require him to post $10.5 million in bonding and put up some of his personal assets to guarantee that affiliates of his Southern Coal Corp. complete significant land reclamation work. As part of this deal, fines he owed were reduced from $4.5 million to $1.5 million.

Getty said the Justices have done a "phenomenal job" cleaning up the operations, bringing a total of 500 violations down to less than a dozen. He added that the two regulators were personally responsible for the coal producer's inability to finish its reclamation duties, which could cost more than $4.5 million in fines.

A spokesman for Kentucky's Energy and Environment Cabinet, John Mura, told S&P Global Market Intelligence that the lawsuits appear to be an attempt to intimidate public officials from doing their jobs.

"The legal actions are entirely without merit and will be vigorously defended to protect our state government officials who devote their careers to safeguarding the land and the health of Kentucky citizens," he said.

Getty claims Luttrell had intimidated contractors who would have worked on reclamation jobs.

"Do you not think it's intimidation coming the other way when the head regulator calls up the people who are going to come to clean up the site and says 'No you don't want to come work for these people. They're bad news, they don't do this, they don't do that.' That's not appropriate under any circumstance, period," he says.

Normally regulators have qualified immunity from cases like this, but Getty said they can be held personally accountable when they act out of prejudice or malice.

Justice recently announced he was switching parties from Democrat to Republican.