4 coal companies settle 2009 mine lawsuit filed by Breathitt residents | Lexington Herald Leader

Four coal companies have settled a lawsuit by 91 residents along Quicksand Creek in Breathitt County who claimed poor reclamation of surface mines exacerbated flooding after heavy rains in May 2009.

The terms of the settlement are confidential, said the plaintiffs' attorney Ned Pillersdorf, but others called the settlement groundbreaking for Kentucky.

The bulk of the evidence was a study done for the plaintiffs by a Virginia engineering firm. A model of the current topography of the Quicksand Creek watershed was compared with the watershed if no mining had been done. The study found that peak flows in the creek increased 77 percent to 81 percent during a rain like the soaking that occurred May 8 and 9, 2009.

"It has not been done in Kentucky before. This is the best engineering study that I've seen on this issue," said Jack Spadaro, a mine reclamation and hydrology expert hired by Pillersdorf. "It certainly is groundbreaking in Kentucky."

Two of the companies, Miller Brothers Coal and Appalachian Fuels, are in bankruptcy, so much of the negotiation was done with insurance companies, Pillersdorf said. The other defendants are Lexington Coal and ICG.

Phone numbers were disconnected Thursday at Appalachian Fuels, which previously employed state Rep. Rocky Adkins, D-Sandy Hook, and whose parent Energy Coal Resources pays state Rep. Greg Stumbo, D-Prestonsburg, to sit on its board of directors. A phone message at Lexington Coal was not immediately returned. Miller Brothers' property has since been purchased by Laurel Mountain Resources, which was not named in the lawsuit. ICG had no comment other than the settlement was confidential and ICG did not admit or agree that there was any fault or liability, said company attorney and Vice President Roger Nicholson.

"That's what makes these cases challenging to do, in that the defendants are basically gone," Pillersdorf said. "The pressure on me is that I have clients who say, 'We live here and there.' They are displaced."

Hundreds of homes were destroyed in Breathitt County during the flood, and emergencies were declared in several Eastern Kentucky counties, including Pike, Magoffin, Floyd and Owsley.

If a settlement had not been reached, the case was set to go to trial on May 9, the two-year anniversary of the start of the flood.

The plaintiffs also criticized the state Division of Mine Reclamation and Enforcement for what they called lax inspections and too many variances given to the companies' mining in the watershed.

"The state has been saying all along that mining did not contribute to the flooding of 2009. They were simply lying," Spadaro said.

He said that the study the plaintiffs commissioned said the state granted the mine companies permit variances that allowed them to mine through and fill intermittent and perennial streams and to use rocky soil instead of properly absorbent topsoil.

The Kentucky Division of Mine Reclamation and Enforcement cited Miller Brothers several times later in 2009, but unrelated to the May flood, for having sediment ponds over capacity and for allowing slides during rain in the Quicksand Creek watershed. The company also was cited for damaging a resident's water well at a site outside Quicksand Creek.

The agency previously said it found no evidence that mine activity caused flooding in the creek.

The federal Office of Surface Mining has started its own hydrological analysis of the Quicksand Creek watershed. The report has not been published.

Bill Bissett, president of the Kentucky Coal Association, declined to comment on the settlement.

Pillersdorf is also representing a group of residents on Harless Creek in Pike County, who were flooded out of their homes during a similar storm in July 2010. That group has sued Cambrian Coal and AEP Kentucky Coal for damages.