Tennessee Valley Authority liable for 2008 coal ash spill-ruling

(Reuters) - The Tennessee Valley Authority is legally responsible for a 2008 accident that sent 5 million cubic yards of toxic coal sludge oozing into a small community in eastern Tennessee, a federal judge ruled on Thursday.

U.S. District Judge Thomas Varlan said the levee that was supposed to keep the wet coal ash confined failed because of conduct on the part of the authority.

As a result, he said, the federally owned utility will have to pay unspecified damages to more than 800 plaintiffs who sued after the spill. Hundreds of acres of land in Roane County were covered and hundreds of residents were forced from their homes.

"Had TVA followed its own mandatory policies, procedures, and practices, the subsurface issues underlying the failure of North Dike would have been investigated, addressed, and potentially remedied before the catastrophic failure," Varlan wrote.

Coal ash, a by-product of coal power plants, contains heavy metals that can cause cancer and damage the nervous system, according to the U.S. Environmental Protection Agency.

The TVA said in a statement that it had already purchased nearly 180 properties affected by the spill, settled more than 200 other claims submitted by residents and paid $43 million to the Roane County Economic Development Foundation for use by communities in the affected area.

"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," the utility said.

While it was a victory for the plaintiffs, Thursday's ruling signals the beginning of a new phase in their litigation against the TVA. The plaintiffs will now have to go back to court and prove that they were each directly impacted by the spill.

(Editing by Cynthia Johnston)