The successors to a company that developed McCreary County's coal industry more than a century ago are liable for toxic releases from unreclaimed mine sites, the federal government has alleged.
A settlement of that claim, if approved by a judge, would effectively end the county's historic association with the company, said Robert Gable, the only remaining employee.
The settlement, called a consent decree, will include a provision for the Stearns Company Ltd. to sign away its rights to the coal, oil and gas under 55 square miles of the county, Gable said.
That decree has not been filed, but it will be, Gable said.
The Stearns Coal and Lumber Co., started by Gable's great-grandfather, Michigan timber baron Justus S. Stearns, started mining in 1902 in what would later become McCreary County.
Stearns built a company town, more than a dozen mining camps and a railroad to haul coal and timber out of the rugged hills of the county. Stearns dominated the local economy for decades.
In 1937, the company sold 46,800 acres to the federal government for what became the Daniel Boone National Forest.
However, Stearns retained the mineral rights and was involved in mining in the county until 1980.
The government claims in a lawsuit filed Tuesday that underground mines on those lands were improperly closed.
Mine portals and waste piles have leaked hazardous substances such as lead and chromium into streams, the complaint alleges.
The lawsuit is unusual because it seeks money for cleanup under a federal law on hazardous-waste sites, not mining rules.
Gable, a former chairman of the Kentucky Republican Party and two-time candidate for governor, fought the federal government for more than 20 years over the Stearns mineral holdings under the federal forest.
Gable argued that under federal rules adopted in 1977 to limit mining disturbances on federal land, the government had taken his property — the ability to lease out mining rights — without just compensation.
He won a judgment of $72 million, but that was overturned on appeal. The company ended up with a $7 million legal bill, Gable said.
Gable said Stearns has no money to pay for cleanup at old mine sites, as the new lawsuit seeks. Its only assets are the mineral rights, and he sees those as worthless given the federal restrictions
Gable said the likely outcome of the case will be "them getting the property, free, and us getting permission to go out of business."
Bill Estep: (606) 678-4655. Twitter: @billestep1